NOTE 10 –LEASES

Rental Revenue as a Lessor

The Company leases its 30 medical outpatient properties, four self-storage properties and one student housing property under long-term and short-term operating leases. The remaining lease terms for the Company’s medical outpatient leases, as of June 30, 2026, range from 1.7 years to 14.6 years. The leases for self-storage units generally are on a month-to-month basis. The lease terms for the Company’s student housing leases generally approximate one year.

Medical outpatient leases require the tenant to pay fixed base rent paid monthly in advance, and to reimburse the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the Company and recoverable under the terms of the lease. Under these leases, the Company pays all expenses and is reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid. Self-storage units are leased to individual tenants under lease agreements, which generally are on a month-to-month basis. Student housing properties are typically leased by the bed on an individual lease liability basis and require the tenant to pay fixed base rent paid monthly in advance, and to reimburse the Company for certain costs, primarily the tenant’s share of utilities expenses, incurred by the Company. Under leases where all expenses are paid by the Company, subject to reimbursement by the tenant, the expenses are included within property operating expenses. As per ASC 842, reimbursements for common area maintenance are considered non-lease components that are permitted to be combined with rental revenue. The combined lease component and reimbursements for insurance and taxes are reported as rental revenue on the consolidated statements of operations and comprehensive income (loss).

Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed base rent as well as all costs and expenses associated with occupancy. Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included on the consolidated statements of operations and comprehensive income (loss).

Concentration of Credit Risk

Revenue Concentration

Geographic Concentration

As of June 30, 2026, Arizona, Texas and Connecticut represented approximately 27%, 26% and 15%, respectively, of the Company’s total rentable square feet of medical outpatient properties.

As of June 30, 2026, Alabama and Georgia represented approximately 61% and 39%, respectively, of the Company’s total rentable square feet of self-storage properties.

Lease Expense as a Lessee

The Company is a lessee under three ground leases.

Phoenix Property Ground Lease

The Phoenix property ground lease, which commenced on July 7, 1993 and extends through July 6, 2092, was assumed as part of a property purchased by Arizona Healthcare DST (“Arizona DST”) on June 6, 2018. When Arizona DST assumed the lease, Arizona DST considered the lease terms and lease classification and accounted for the ground lease as an operating lease with an established lease term and payment schedule. Upon consolidation on May 1, 2026, the Company reconsidered the lease terms and accounted for the ground lease as an operating lease with an established lease term and payment schedule. As of May 1, 2026, the Company recorded an operating lease liability of $1,056 and an operating lease right-of-use asset of $4,693 on its consolidated balance sheet. The operating lease liability was based on the present value of the ground lease’s future lease payments using an interest rate of 7.67% which the Company considers reasonable and within the range of the Company’s incremental borrowing rate. The operating lease right-of-use asset included acquired below-market ground lease intangibles of $3,637.

Jordan Valley Medical Center Ground Lease

The Jordan Valley Medical Center ground lease, which commenced on October 8, 2015 and extends through October 7, 2114 with three 15-year renewal options (which the Company assumes will be exercised), was assumed as part of a property purchased by Healthcare Portfolio II DST (“Healthcare II DST”) on January 23, 2017. When Healthcare II DST assumed the lease, Healthcare II DST considered the lease terms and lease classification and accounted for the ground lease as an operating lease. The entire rent for the ground lease has been paid before the lease was assumed. Therefore no lease liability has been recorded in the consolidated financial statements. Upon consolidation on May 1, 2026, the Company reconsidered the lease terms and recorded an operating lease right-of-use asset of $301, which represents the acquired below-market ground lease intangibles.

Saint Elizabeth Medical Center Ground Lease

The Saint Elizabeth Medical Center ground lease, which commenced on January 17, 2017 and extends through December 31, 2077 with two 15-year renewal options (which the Company assumes will be exercised), was assumed as part of a property purchased by Healthcare Portfolio VII DST (“Healthcare VII DST”) on December 20, 2018. When Healthcare VII DST assumed the lease, Healthcare VII DST considered the lease terms and lease classification and accounted for the ground lease as a finance lease with an established lease term and payment schedule. Upon consolidation on May 1, 2026, the Company reconsidered the lease terms and accounted for the ground lease as a finance lease with an established lease term and payment schedule. As of May 1, 2026, the Company recorded a finance lease liability of $1,680 and a finance lease right-of-use asset of $1,614 on its consolidated balance sheet. The finance lease liability was based on the present value of the ground lease’s future lease payments using an interest rate of 8.05% which the Company considers reasonable and within the range of the Company’s incremental borrowing rate. The finance lease right-of-use asset was recorded net of the acquired above-market ground lease intangibles of $66.

For the three and six months ended June 30, 2026, total rent expense was $62, recorded in property operating expenses on the consolidated statements of operations and comprehensive income (loss).