Note 9. Equity and Noncontrolling Interests

Common Shares Detail

Class D Common Shares

On June 10, 2025, the Company classified and designated a new class of common shares of beneficial interest, $0.01 par value per share of the Company designated as Class D Common Shares. Each Class D Common Share held in a shareholder’s account will automatically and without any action on the part of the shareholder thereof convert into a number of Class I Common Shares equal to the Class D Conversion Rate (as defined below) upon a Conversion Event, unless, at least five days before the effective date of such Conversion Event, the Trustee determines, in its sole and absolute discretion, that such conversion shall not occur in connection with such Conversion Event, but any such determination will not preclude the conversion of Class D Common Shares into Class I Common Shares in connection with the occurrence of any successive Conversion Event. The “Class D Conversion Rate” means a fraction, the numerator of which is the net asset value (“NAV”) of the Company allocable to the Class D Common Shares, divided by the number of outstanding Class D Common Shares, and the denominator of which is the NAV of the Company allocable to the Class I Common Shares, divided by the number of outstanding Class I Common Shares immediately prior to the Conversion Event. For these purposes, a “Conversion Event” is defined in the Company’s Third Amended and Restated Declaration of Trust, dated June 10, 2025 (the “Amended Declaration of Trust”) to generally mean (i) the listing of any class of the Company’s shares on a national securities exchange pursuant to a public offering, or (ii) any merger, consolidation, transfer of all or substantially all of the assets or other business combination of the Operating Partnership or the Company, as a result of which all outstanding Company shares are cancelled in exchange for the right to receive cash or securities that have been, as of the closing date of such transaction, listed on a national securities exchange for at least 180 days, or a combination thereof. Otherwise, the Class D Common Shares have the same preferences, rights, voting powers, restrictions, limitations as to dividends

and other distributions, qualifications, and terms and conditions as the Class A Common Shares, Class I Common Shares, and Class S Common Shares (except for certain conversion rights with respect to the Class A and Class S Common Shares as set forth in the Amended Declaration of Trust).

Class ER-I, Class ER-A, Class ER-S, and Class ER-D Common Shares

On June 10, 2025, the Company classified and designated three new classes of common shares, Class ER-A Common Shares, Class ER-S Common Shares, and Class ER-D Common Shares, and renamed the existing Class ER Common Shares, which were classified and designated on May 30, 2024 (the “Legacy Class ER Common Shares”) as Class ER-I Common Shares. Other than the name change, the Class ER-I Common Shares are identical to the Legacy Class ER Common Shares in all respects, including as it relates to preferences, rights, voting powers, restrictions, and limitations. The terms, conditions, rights, preferences, and obligations of the Class ER-I Common Shares, Class ER-D Common Shares, Class ER-A Common Shares, and Class ER-S Common Shares (collectively, the “Class ER Common Shares”) are substantially similar to each other, but are substantially dissimilar to the other classes of Common Shares of the Company.

Each of the Class ER Common Shares are subject to mandatory conversion upon the occurrence of certain events. In this regard, each Class ER Common Share will automatically and without any action on the part of the shareholder convert into an equal number of Class I Common Shares, Class A Common Shares, Class S Common Shares, or Class D Common Shares of the Company, as applicable, on a 1:1 basis, upon a Conversion Event, unless, at least five days before the effective date of such Conversion Event, the Trustee determines, in its sole and absolute discretion, that such conversion shall not occur in connection with such Conversion Event. Any such determination will not preclude the conversion of Class ER Common Shares, as applicable, into the other classes of Common Shares described above in connection with the occurrence of any successive Conversion Event.

Each of the Class ER Common Shares are also subject to the optional conversion rights of the Company. In this regard, from and after the fifth anniversary of the closing date of a Class ER Common shareholder’s purchase of the applicable class of such common shares, the Trustee, on behalf of the Company, will have the right to cause each Class ER Common Shareholder, without any action on the part of the shareholder, to convert any or all of such holder’s Class ER Common Shares, as applicable, into an equal number of the respective Class I, Class A, Class S, or Class D Common Shares, on a 1:1 basis. The Trustee will provide written notice to the affected shareholder of its intent to exercise the conversion rights described in the preceding sentence no less than 30 calendar days prior to any such conversion date.

Each Class ER Common Shareholder will have the right, upon the seventh anniversary of the closing date of a shareholder’s purchase of Class ER Common Shares (subject to three one-year extensions in the Trustee’s discretion), to require the Company to redeem the Class ER Common Shares, in whole or in part, held by such shareholder, as well as the right to convert such Class ER Common Shares to the respective Class I, Class A, Class S, or Class D Common Shares on a 1:1 basis. The Class ER Common Shares have no other redemption rights and are not eligible for repurchase or redemption under the Company’s share repurchase program.

Otherwise, the Class ER Common Shares have the same preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions as the Class A Common Shares, Class I Common Shares, and Class S Common Shares.

Class I, Class A, and Class S Common Shares

The Company’s other common shares consist of Class I Common Shares, Class A Common Shares, and Class S Common Shares. The Class I, Class A, and Class S Common Shares have identical rights and privileges, including identical voting rights, but have different upfront selling commissions and related fees. Each Class A Common Share and each Class S Common Share shall automatically and without any action on the part of the shareholder thereof convert into the same number of Class I Common Shares upon a listing of any class of common shares on any securities exchange pursuant to an effective registration statement filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, or any merger, consolidation, transfer of all or substantially all of the assets or other business combination of the Company, as a result of which all outstanding common shares are canceled in exchange for the right to receive cash or securities, or a combination thereof.

Private Offering

The Company is currently conducting a private placement offering on a continuous basis of up to $2.165 billion of Class I Common Shares, Class A Common Shares, Class S Common Shares, Class D Common Shares, Class ER-I Common Shares, Class ER-A Common Shares, Class ER-S Common Shares, and Class ER-D Common Shares (the “Private Offering”). The Trustee may increase the maximum offering amount of the Private Offering as long as it is anticipated to be accretive to the Company’s shareholders, in the Trustee’s sole discretion. A wholly-owned subsidiary of the Sponsor, ExchangeRight Income Fund GP, LLC, owned 600,000 Class I Common Shares as of June 30, 2025 and December 31, 2024, which were purchased on the same terms as those available to the other investors at acquisition. The following table provides a summary of the Class I, Class A, Class S, Class D, Class ER-I, Class ER-A, Class ER-S, and Class ER-D common shares offering prices in effect for the six months ended June 30, 2025:

Common Share Repurchase Program

The Company has adopted a share repurchase program whereby, subject to certain limitations, holders of the Class I, Class A, Class D, and Class S Common Shares may request on a quarterly basis that the Company repurchases all or any portion of their shares. The Class ER-I, Class ER-A, Class ER-S, and Class ER-D Common Shares are not eligible for repurchase under the share repurchase program. Shareholders are eligible to have their shares repurchased by the Company pursuant to the share repurchase program and the authorization of the Trustee. Holders of shares may request that the Company repurchase shares in an amount not to exceed five percent (5.0%) per fiscal year of the Company’s issued and outstanding shares, or as approved by the Trustee. The Company may repurchase fewer shares than have been requested in any particular quarter to be repurchased under its share repurchase program, or none at all, at the Company’s full discretion. The Company also has no obligation to repurchase shares if the redemption would violate the applicable restrictions on distributions under Maryland law, which prohibits distributions that would cause the Company to fail to meet statutory tests of solvency. The Trustee may modify, suspend or terminate the share repurchase program if it deems such action to be in the Company’s best interest and the best interest of the Company’s shareholders. The 600,000 Class I Common Shares owned by ExchangeRight Income Fund GP, LLC are restricted to redemption and therefore not subject to the share repurchase program. During the three months ended June 30, 2025, the Company repurchased 129,331 Class I Common Shares and 200,897 Class A Common Shares totaling $9.0 million under the share repurchase program. During the six months ended June 30, 2025, the Company repurchased 319,575 Class I Common Shares and 396,334 Class A Common Shares totaling $19.2 million under the share repurchase program.

Distributions

The amount of distributions payable to the Company’s shareholders is determined by the Trustee and is dependent on a number of factors, including funds available for distribution, the Company’s financial condition, capital expenditure requirements, requirements of Maryland law and annual distribution requirements needed to qualify and maintain the Company’s status as a REIT. The Trustee has authorized, and the Company has declared, distributions through June 30, 2025. The distributions are payable on or around the 15th day following each month end to shareholders of record at the close of business on the last day of the prior month.

Cumulative distributions relating to Class I Common Shares, Class A Common Shares, Class ER-I Common Shares and Operating Partnership units (“OP Units”) totaling $3.8 million were declared but not yet paid as of June 30, 2025 and have been included in distributions payable in the accompanying condensed consolidated balance sheet. The unpaid distributions as of June 30, 2025 were paid in cash or reinvested in the Company’s common shares in July 2025.

Noncontrolling Interests

The Operating Partnership had 9,287,267 OP Units outstanding as of June 30, 2025. The holders of OP Units have the right to cause their OP Units to be redeemed by the Operating Partnership for cash, unless the Company, in its sole discretion, elects to purchase such OP Units in exchange for Class I Common Shares of the Company, issuable on a 1:1 basis, subject to adjustment under certain circumstances. The Company currently intends to elect to pay the redemption price for all OP Units tendered for redemption in the form of Class I Common Shares. OP Units totaling 6,848 and 29,566 were exchanged for the same number of Class I Common Shares during the three and six months ended June 30, 2025, respectively.