4.Investments in Unconsolidated Real Estate Entities

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The XXV DST was formed in 2025 by MDI Sponsor, LLC (formerly known as MDR Sponsor TRS, LLC), a wholly owned subsidiary of the Company, to hold title to the Tesla Property.  MDI Sponsor, LLC is currently offering beneficial interests in the XXV DST to accredited investors in a private placement under Regulation D, the proceeds of which are being used to redeem the Company’s beneficial interests for cash.  Upon completion of such offering, the Company expects to no longer retain an ownership interest in the DST but will continue to control the Tesla Property’s operations as the Trust Manager.  

As of December 31, 2025, the Company concluded that XXV DST qualified as a VIE and determined it was the primary beneficiary of the VIE.  Consequently, the Company consolidated the entity.  During the six months ending June 30, 2026, the Company sold 84.7% of its interest in XXV DST and reevaluated its accounting for XXV DST.  The Company determined that as of June 30, 2026, it was no longer the primary beneficiary of the VIE because it no longer met the Benefits criterion (see Note 2, Variable Interest Entities, above).  As a result, the Company deconsolidated XXV DST on June 30, 2026.  

Subsequent to the deconsolidation, the Company, as a 15.3% beneficial owner and the Trust Manager of XXV DST, has the ability to exercise significant influence over the entity and therefore will account for this investment under the equity method of accounting.

The Company valued its unconsolidated equity method investment in XXV DST at $1,312,047 based on the approximate $8.6 million fair value of the total beneficial ownership interests in the XXV DST.  The deconsolidation of the net assets, liabilities and non-controlling interests of $847,756 resulted in DST Sponsorship Revenue of $464,291 which represents the Company’s acquisition and cost reimbursement fees associated with the sponsorship of the XXV DST.