Jefferies & Company Increasingly Concerned About UHT Outlook

Jefferies & Company is increasingly concerned about Universal Health Realty's UHT 2011 outlook given the possible revocation of the hospital license at a major tenant (Inland Valley Hospital) as well as weak fundamentals in the Nevada and Arizona markets where UHT has meaningful medical office building (MOB) exposure. “We forecast a decline in earnings in 2011/2012 at UHT driven by lower occupancy and softer rental rates for UHT's MOB platform in Arizona and Nevada, which comprises 60% of total rentable square footage in UHT's MOB portfolio, and just under 40% of the total square footage of UHT's total portfolio,” Jefferies & Company writes. Universal Health Realty closed Friday at $36.54.