XML 33 R21.htm IDEA: XBRL DOCUMENT v3.21.2
Relationship with Universal Health Realty Income Trust and Related Party Transactions (Tables)
9 Months Ended
Sep. 30, 2021
Related Party Transactions [Abstract]  
Remaining Renewal Options and Terms for Each of Three Hospital Facilities Leased from Trust

The table below details the renewal options and terms for each of our three wholly-owned acute care hospital facilities leased from the Trust:   

Hospital Name

 

Annual

Minimum

Rent

 

 

End of Lease Term

 

Renewal

Term

(years)

McAllen Medical Center

 

$

5,485,000

 

 

December, 2026

 

5(a)

Wellington Regional Medical Center

 

$

3,030,000

 

 

December, 2021

 

10(b)

Southwest Healthcare System, Inland Valley Campus

 

$

2,648,000

 

 

December, 2021

 

10(c)

(a)

We have one 5-year renewal option at existing lease rates (through 2031).

 

(b)

We have two 5-year renewal options at fair market value lease rates (2022 through 2031).  Since our lease renewal option for Wellington Regional Medical Center is fair market value (effective January 1, 2022), the lease rate valuation process is currently in progress and expected to be completed during the fourth quarter of 2021. Subject to completion of a lease agreement at acceptable rates and terms, we intend to renew the lease on this facility upon the December 31, 2021 scheduled expiration of the current lease term.  

(c)

We have two 5-year renewal options at fair market value lease rates (2022 through 2031).  As previously disclosed, a wholly-owned subsidiary of ours has notified the Trust that it intends to terminate the existing lease on Southwest Healthcare System, Inland Valley Campus, upon the scheduled expiration of the current lease term on December 31, 2021.  As permitted pursuant to the terms of the lease, we have the right to purchase the leased property at its appraised fair market value at the end of the existing lease term.  However, we have agreed to exchange, and lease back, substitution properties with an aggregate fair market value substantially equal to that of Southwest Healthcare System, Inland Valley Campus, in return for the real estate assets of the Inland Valley Campus. The substitution properties consist of one acute care hospital (including a behavioral health pavilion) and a newly constructed behavioral health hospital. The independent Trustees (of the Board of Trustees) of the Trust, as well as our Board of Directors, have approved these transactions subject to satisfactory completion of definitive agreements, which are in progress. The effective date of the transactions is expected to coincide with the scheduled lease maturity date of December 31, 2021.