v3.25.4
Non-Controlling Interests
 12 Months Ended
Dec. 31, 2025
Noncontrolling Interest [Abstract]  
Non-Controlling Interests Non-Controlling Interests
Non-controlling interests on the Company’s consolidated balance sheets is comprised of the following (dollars in thousands):
Balance as of December 31,
20252024
Series A Preferred Units held by third parties$2,578 $2,578 
Common OP Units held by third parties1,883 2,212 
Total Non-controlling Interests in the OP4,461 4,790 
Non-controlling interests in property owning subsidiaries— 775 
Total Non-controlling Interests$4,461 $5,565 
Net loss attributable to non-controlling interests on the Company’s consolidated statement of operations is comprised of the following (dollars in thousands):
Year ended December 31,
202520242023
Income attributable to Series A Preferred Units held by third parties$(184)$(184)$(185)
Loss attributable to Common OP Units held by third parties248 837 317 
Net loss attributable to non-controlling interests in the OP64 653 132 
Income attributable to non-controlling interests in property-owning subsidiaries— (86)(50)
Net loss attributable to non-controlling interests$64 $567 $82 
Non-Controlling Interests in the OP
For preferred and common shares issued by the Company, the Company typically issues mirror securities with substantially equivalent economic rights between the Company and the OP. The securities held by the Company are eliminated in consolidation.
Series A Preferred Units
The Company is the sole general partner and holds substantially all of the Series A Preferred Units (except as discussed below). All common and preferred units in the OP held by the Company are eliminated in consolidation.
In September 2021, the Company partially funded the purchase of an OMF from an unaffiliated third party by causing the OP to issue 100,000 Series A Preferred Units to the unaffiliated third party, with a face value of $25.00 per unit, which were recorded at issuance at a then fair value of $2.6 million, or $25.78 per unit, to the unaffiliated third party.
A holder of Series A Preferred Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s Series A Preferred Stock, which earn dividends at a rate equal to 7.375% of its face value. After holding the Series A Preferred Units for a period of one year, a holder of Series A Preferred Units has the right to redeem Series A Preferred Units for, at the option of the OP, the corresponding number of shares of the Company’s Series A Preferred Stock, or the cash equivalent. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. During both years ended December 31, 2025 and 2024, Series A Preferred Unit holders were paid distributions of $0.2 million.
Common OP Units
The Company is the sole general partner and holds substantially all of the Common OP Units. In November 2014, the Company partially funded the purchase of an OMF from an unaffiliated third party by causing the OP to issue 405,908 Common
OP Units, with a value of $10.1 million, or $25.00 per unit, to the unaffiliated third party. In addition, as of December 31, 2025, the former Advisor’s parent entity held 90 Common OP Units.
A holder of Common OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock in an amount retroactively adjusted to reflect the stock dividends, other stock dividends and other similar events. After holding the Common OP Units for a period of one year, a holder of Common OP Units has the right to redeem Common OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock, as retroactively adjusted for the stock dividends, other stock dividends and other similar events, or the cash equivalent. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. During the years ended December 31, 2025 and 2024, Common OP Unit non-controlling interest holders were not paid any cash distributions.
Stock dividends do not cause the OP to issue additional Common OP Units, rather, the redemption ratio to common stock is adjusted. The 405,998 Common OP Units outstanding as of December 31, 2025 would be redeemable for 124,161 shares of common stock, giving effect to adjustments for the impact of the stock dividends through January 2024 and the Reverse Stock Split.
Non-Controlling Interests in Property Owning Subsidiaries
The Company had investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company’s property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries’ property. Upon disposition of a property subject to non-controlling interest, the investor would receive a proportionate share of the net proceeds from the sale of the property. The investor had no recourse to any other assets of the Company. Due to the nature of the Company’s involvement with these arrangements and the significance of its investment in relation to the investment of the third party, the Company had determined that it controlled each entity in these arrangements and therefore the entities related to these arrangements were consolidated within the Company’s financial statements. A non-controlling interest was recorded for the investor’s ownership interest in the properties.
In November 2025, the Company exercised its option to purchase its joint venture partner’s approximately 4.7% interest in a consolidated joint venture that owned the Plaza Del Rio Medical Office Campus Portfolio, which consisted of four properties. As of December 31, 2025, the Company had 100% ownership of these properties.