NOTE 7 – CONSOLIDATED JOINT VENTURE AND VARIABLE INTEREST ENTITY

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Variable Interest Entity – Consolidated Joint Venture

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As of March 31, 2026, the Company has one consolidated joint venture in which it holds a 95% interest. The Company has determined that (i) this joint venture is a VIE because the non-controlling interest does not hold substantive kick-out or participating rights and (ii) it is the primary beneficiary of this VIE as it has the power to direct the activities that most significantly impact the joint venture’s performance including management, approval of expenditures, and the obligation to absorb the losses or rights to receive benefits. Accordingly, the Company consolidates the operations of this VIE for financial statement purposes. The VIE’s creditors do not have recourse to the assets of the Company other than those held by the joint venture.

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The following is a summary of the consolidated VIE’s carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands):

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Distributions to our joint venture partner are determined pursuant to the applicable operating agreement and, in the event of a sale of, or refinancing of the mortgage encumbering, the property owned by such venture, the distributions to the Company may be less than that implied by the Company’s equity ownership interest in the venture.