In accordance with U.S. GAAP and guidance relating to accounting for investments and real estate ventures, we account for our unconsolidated investments in LLCs/LPs which we do not control using the equity method of accounting. The third-party members in these investments have equal voting rights with regards to issues such as, but not limited to: (i) divestiture of property; (ii) annual budget approval, and; (iii) financing commitments. These investments, which represent 33% to 95% non-controlling ownership interests, are recorded initially at our cost and subsequently adjusted for our net equity in the net income, cash contributions to, and distributions from, the investments. Pursuant to certain agreements, allocations of sales proceeds and profits and losses of some of the LLC investments may be allocated disproportionately as compared to ownership interests after specified preferred return rate thresholds have been satisfied.

Distributions received from equity method investees in the consolidated statements of cash flows are classified based upon the nature of the distribution. Returns on investments are presented net of equity in income from unconsolidated investments as cash flows from operating activities. Returns of investments are classified as cash flows from investing activities.

At June 30, 2026, we have non-controlling equity investments or commitments in four jointly-owned LLCs/LPs which own MOBs. As of June 30, 2026 we accounted for these LLCs/LPs on an unconsolidated basis pursuant to the equity method since they are not variable interest entities which we are the primary beneficiary nor do we have a controlling voting interest. The majority of these entities are joint-ventures between us and non-related parties that hold minority ownership interests in the entities. Each entity is generally self-sustained from a cash flow perspective and generates sufficient cash flow to meet its operating cash flow requirements and service the third-party debt (if applicable) that is non-recourse to us. Although there is typically no ongoing financial support required from us to these entities since they are cash-flow sufficient, we may, from time to time, provide funding for certain purposes such as, but not limited to, significant capital expenditures, leasehold improvements and debt financing. Although we are not obligated to do so, if approved by us at our sole discretion, additional cash funding is typically advanced as equity or member loans. These entities maintain property insurance on the properties.

The following property table represents the four LLCs/LPs in which we owned a non-controlling interest and were accounted for under the equity method as of June 30, 2026:



Name of LLC/LP	Ownership			Property Owned by LLC/LP
Suburban Properties		33	%	St. Matthews Medical Plaza II
Brunswick Associates (a.)(b.)		74	%	Mid Coast Hospital MOB
FTX MOB Phase II		95	%	Forney Medical Plaza II
Grayson Properties II (c.)		95	%	Texoma Medical Plaza II

(a.)

This LLC has a third-party term loan of $7.7 million, which is non-recourse to us, outstanding as of June 30, 2026.

(b.)

We are the lessee with a third party on a ground lease for land.

(c.)

This LP constructed, owns and operates the Texoma Medical Plaza II which is located in Denison, Texas, on the campus of a hospital owned and operated by a wholly-owned subsidiary of UHS. We have committed to invest up to $10.1 million in equity and debt financing, of which $8.3 million, net, has been funded as of June 30, 2026.

Below are the condensed combined statements of income (unaudited) for the four LLCs/LPs accounted for under the equity method at June 30, 2026 and 2025:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(amounts in thousands)				(amounts in thousands)
Revenues	$	2,131	$	2,141	$	4,379	$	4,443
Operating expenses		886		859	$	1,757		1,745
Depreciation and amortization		429		470	$	853		942
Interest, net		58		112	$	116		249
Net income	$	758	$	700	$	1,653	$	1,507
Our share of net income	$	427	$	365	$	941	$	777

Below are the condensed combined balance sheets (unaudited) for the four above-mentioned LLCs/LPs that were accounted for under the equity method as of June 30, 2026 and December 31, 2025:


	June 30, 2026			December 31, 2025
	(amounts in thousands)
Net property, including construction in progress	$	25,571		$	26,175
Other assets (a.)		6,291			6,206
Total assets	$	31,862		$	32,381

Other liabilities (a.)	$	2,982		$	3,168
Mortgage notes payable, non-recourse to us		7,736			7,884
Equity		21,144			21,329
Total liabilities and equity	$	31,862		$	32,381

Investments in and advances to LLCs before amounts included in
accrued expenses and other liabilities	$	20,017		$	20,125
Amounts included in accrued expenses and other liabilities		(1,803	)		(1,828	)
Our share of equity in LLCs, net	$	18,214		$	18,297

(a.)

Other assets and other liabilities as of June 30, 2026 and December 31, 2025 include approximately $644,000 and $646,000, respectively, of right-of-use land assets and right-of-use land liabilities related to ground leases whereby the LLC/LP is the lessee, with third party lessors, including subsidiaries of UHS.

As of June 30, 2026, and December 31, 2025, aggregate principal amounts due on mortgage notes payable by unconsolidated LLCs/LPs, which are accounted for under the equity method and are non-recourse to us, are as follows (amounts in thousands):


	Mortgage Loan Balance (a.)
Name of LLC/LP	6/30/2026		12/31/2025		Maturity Date
Brunswick Associates (2.80% fixed rate mortgage loan)	$	7,736	$	7,884	December, 2030
	$	7,736	$	7,884

Pursuant to the operating and/or partnership agreements of the four LLCs/LPs in which we continue to hold non-controlling ownership interests, the third-party member and the Trust, at any time, potentially subject to certain conditions, have the right to make an offer (“Offering Member”) to the other member(s) (“Non-Offering Member”) in which it either agrees to: (i) sell the entire ownership interest of the Offering Member to the Non-Offering Member at a price as determined by the Offering Member (“Transfer Price”), or; (ii) purchase the entire ownership interest of the Non-Offering Member at the equivalent proportionate Transfer Price. The Non-Offering Member has 60 to 90 days to either: (i) purchase the entire ownership interest of the Offering Member at the Transfer Price, or; (ii) sell its entire ownership interest to the Offering Member at the equivalent proportionate Transfer Price. The closing of the transfer must occur within 60 to 90 days of the acceptance by the Non-Offering Member.