# EDGAR Filing Document

**Accession Number:** 0001550913
**File Stem:** 0001140361-26-021627
**Filing Date:** 2026-5
**Character Count:** 608235
**Document Hash:** 85e17123d133879285c1d0d444ed61a9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001140361-26-021627.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001140361-26-021627

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 118

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260515

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MacKenzie Realty Capital, Inc.
- **CENTRAL INDEX KEY:** 0001550913
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 454355424
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42402
- **FILM NUMBER:** 26986154

**BUSINESS ADDRESS:**
- **STREET 1:** 89 DAVIS ROAD, STE. 100
- **CITY:** ORINDA
- **STATE:** CA
- **ZIP:** 94563
- **BUSINESS PHONE:** 925-631-9100

**MAIL ADDRESS:**
- **STREET 1:** 89 DAVIS ROAD, STE. 100
- **CITY:** ORINDA
- **STATE:** CA
- **ZIP:** 94563

?xml version='1.0' encoding='ASCII'?

------

### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

### Form 10-Q
(Mark one)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission file number 000-55006

## MacKenzie Realty Capital, Inc.
(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| <u>Maryland</u> | <u>45-4355424</u> |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| <u>89 Davis Road, Suite 100, Orinda, CA</u> | <u>94563</u> |
| (Address of principal executive offices) | (Zip Code) |

---

<u>(925) 631-9100</u>

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of class | Trading symbol (s) | Name of exchange on which registered |
| Common Stock, $0.0001 par value per share | MKZR | Nasdaq Capital Market |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☑ Smaller reporting company ☑ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of the shares of issuer's Common Stock outstanding as of May 15, 2026 was 2,255,114.

------

#### **TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **<u>Page</u>** |
| **PART I.** | **FINANCIAL INFORMATION** |  |
| Item 1. | [Consolidated Financial Statements](#ConsolidatedFinancialStat) | 1 |
|  | [Consolidated Balance Sheets as of March 31, 2026 and June 30, 2025 (Unaudited)](#ConsolidatedBalanceSheets) | 1 |
|  | [Consolidated Statements of Operations for the three and nine months ended March 31, 2026 and 2025 (Unaudited)](#ConsolidatedStatementsofO) | 2 |
|  | [Consolidated Statements of Changes in Equity for the three and nine months ended March 31, 2026 (Unaudited)](#ConsolidatedStatementsofC) | 3 |
|  | [Consolidated Statements of Changes in Equity for the three and nine months ended March 31, 2025 (Unaudited)](#ConsolidatedStatementsofChangesinEquity2) | 4 |
|  | [Consolidated Statements of Cash Flows for the nine months ended March 31, 2026 and 2025 (Unaudited)](#ConsolidatedStatementsofCashflows) | 5 |
|  | [Notes to Consolidated Financial Statements (Unaudited)](#NotestoConsolidatedFinanc) | 7 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#MANAGEMENTSDISCUSSIONANDA) | 44 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#QUANTITATIVEANDQUALITATIV) | 65 |
| Item 4. | [Controls and Procedures](#CONTROLSANDPROCEDURES) | 65 |
| **PART II.** | **OTHER INFORMATION** |  |
| Item 1. | [Legal Proceedings](#LEGALPROCEEDINGS) | 66 |
| Item 1A. | [Risk Factors](#RISKFACTORS) | 66 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#UNREGISTEREDSALESOFEQUITY) | 66 |
| Item 3. | [Defaults Upon Senior Securities](#DEFAULTSUPONSENIORSECURIT) | 66 |
| Item 4. | [Mine Safety Disclosures](#MINESAFETYDISCLOSURES) | 66 |
| Item 5. | [Other Information](#OTHERINFORMATION) | 66 |
| Item 6. | [Exhibits](#EXHIBITS) | 67 |

---

------

[*Table of Contents*](#TABLEOFCONTENTS)

---

| | |
|:---|:---|
| **Part I.** | **FINANCIAL INFORMATION** |

---

**Item 1.** **Consolidated Financial Statements**<br>

#### MacKenzie Realty Capital, Inc.

#### Consolidated Balance Sheets
(Unaudited)

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **June 30, 2025** |
|  **Assets** | | |
|  Real estate assets |  |  |
| &nbsp;&nbsp;&nbsp; Land | $42566256 | $42566256 |
| &nbsp;&nbsp;&nbsp; Building, fixtures and improvements | 188450666 | 182879586 |
| &nbsp;&nbsp;&nbsp; Intangible lease assets | 10673707 | 11686822 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: accumulated depreciation and amortization | (27684830) | (24358852) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate assets, net | 214005799 | 212773812 |
|  Cash and cash equivalents | 3975776 | 3627360 |
|  Restricted cash | 342286 | 328239 |
|  Investments, at fair value | 3427327 | 1749528 |
|  Equity method investments, at fair value | 2487154 | 2125451 |
|  Investments income, rents and other receivables | 2460561 | 2227630 |
|  Prepaid expenses and other assets | 901942 | 1184801 |
|  Assets held for sale, net | 11839279 | 11975357 |
|  **Total assets** | $239440124 | $235992178 |
|  **Liabilities** |  |  |
|  Mortgage notes payable, net | $130168850 | $120417074 |
|  Line of credit and notes payable, net | 13847592 | 12016507 |
|  Deferred rent and other liabilities | 1548218 | 1513283 |
|  Finance lease liabilities | 1730319 | 1898005 |
|  Dividend payable | 735265 | 715498 |
|  Accounts payable and accrued liabilities | 4629717 | 4514142 |
|  Below-market lease liabilities, net | 295890 | 530474 |
|  Due to related entities | 450618 | 167764 |
|  Capital pending acceptance | 131350 | 13411 |
|  Liabilities held for sale | 645407 | 664577 |
|  **Total liabilities** | 154183226 | 142450735 |
|  **Equity** |  |  |
|  Common stock, $0.0001 par value, 80,000,000 shares authorized; 2,164,158.00 and 1,578,192.98 shares issued and outstanding as of March 31, 2026 and June 30, 2025, respectively. | 216 | 158 |
|  Preferred stock, $0.0001 par value, 20,000,000 shares authorized: |  |  |
|  Series A Preferred stock, 747,753.79 and 766,176.57 shares issued and outstanding as of March 31, 2026 and June 30, 2025, respectively. | 75 | 77 |
|  Series B Preferred stock, 124,363.67 and 116,112.32 shares issued and outstanding as of March 31, 2026 and June 30, 2025, respectively. | 12 | 12 |
|  Series C Preferred stock, 52,656.67 issued and outstanding as of March 31, 2026. | 5 | - |
|  Additional paid-in capital | 147591001 | 145050643 |
|  Accumulated deficit | (96829745) | (85192267) |
| &nbsp;&nbsp;&nbsp; Total stockholders' equity | 50761564 | 59858623 |
|  Non-controlling interests | 34495334 | 33682820 |
|  **Total equity** | 85256898 | 93541443 |
|  **Total liabilities and equity** | $239440124 | $235992178 |

---

#### The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

------

[*Table of Contents*](#TABLEOFCONTENTS)

#### MacKenzie Realty Capital, Inc.

#### Consolidated Statements of Operations
(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** |
|  | **2026** | **2025** | **2026** | **2025** |
|  Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Rental, reimbursements and other property income | $5441504 | $4273646 | $14574624 | $17256191 |
|  Expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 2114736 | 2634617 | 6984439 | 7091297 |
| &nbsp;&nbsp;&nbsp; Interest expense | 2471562 | 2661864 | 7151845 | 6521686 |
| &nbsp;&nbsp;&nbsp; Property operating and maintenance | 1916805 | 1889737 | 6069945 | 5478951 |
| &nbsp;&nbsp;&nbsp; Asset management fees to related party (Note 8) | 807830 | 863824 | 2584957 | 2570860 |
| &nbsp;&nbsp;&nbsp; General and administrative | 233696 | 895587 | 982808 | 1735449 |
| &nbsp;&nbsp;&nbsp; Professional fees | 141675 | 933624 | 718686 | 1499257 |
| &nbsp;&nbsp;&nbsp; Administrative cost reimbursements to related party (Note 8) | 220250 | 167463 | 660750 | 502391 |
| &nbsp;&nbsp;&nbsp; Directors' fees | 36250 | 55863 | 120750 | 177902 |
| &nbsp;&nbsp;&nbsp; Transfer agent cost reimbursements to related party (Note 8) | - | 1537 | - | 4609 |
| &nbsp;&nbsp;&nbsp; Impairment loss | - | - | - | 9500167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 7942804 | 10104116 | 25274180 | 35082569 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating loss | (2501300) | (5830470) | (10699556) | (17826378) |
|  Other income (loss) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Dividend and distribution income from equity securities at fair value | 70752 | 12418 | 183083 | 47953 |
| &nbsp;&nbsp;&nbsp; Dividend expense from securities sold, not yet purchased, at fair value | - | - | (1055) | - |
| &nbsp;&nbsp;&nbsp; Net unrealized gain (loss) on equity securities at fair value | 354510 | 14938 | 1643528 | (6182) |
| &nbsp;&nbsp;&nbsp; Net income (loss) from equity method investments at fair value | 469174 | (308396) | 367245 | (407521) |
| &nbsp;&nbsp;&nbsp; Net realized income (loss) from investments | 621080 | 18430 | (764) | 232645 |
|  Net loss | (985784) | (6093080) | (8507519) | (17959483) |
| &nbsp;&nbsp;&nbsp; Net income attributable to non-controlling interests | (662608) | (452186) | (1962654) | (1325269) |
| &nbsp;&nbsp;&nbsp; Net income attributable to preferred stockholders Series A, B and C | (396199) | (366133) | (1167305) | (1048826) |
|  Net loss attributable to common stockholders | $(2044591) | $(6911399) | $(11637478) | $(20333578) |
|  Basic and diluted net loss per share attributable to common stockholders \* | $(0.98) | $(4.68) | $(6.16) | $(14.69) |
|  Basic and diluted weighted average common shares outstanding \* | 2078226 | 1476410 | 1889821 | 1384615 |

---

\* After giving effect to the 1-for-10 Reverse Stock Split that was effective August 4, 2025.

#### The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

------

[*Table of Contents*](#TABLEOFCONTENTS)

#### MacKenzie Realty Capital, Inc.

#### Consolidated Statements of Changes in Equity
(Unaudited)

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** | | | **Total** | | **Total Equity** |
|  | **Number of** | **Par** | **Number of** | **Par** | **Number of** | **Par** | **Number of** | **Par** | **Additional Paid-** | **Accumulated** | **Stockholders'** | **Non-controlling** | **Total Equity** |
|  **<u>Three Months Ended March 31, 2026</u>** | **Shares** | **Value** | **Shares** | **Value** | **Shares** | **Value** | **Shares** | **Value** | **in Capital** | **Deficit** | **Equity** | **Interests** | **Total Equity** |
|  **Balance, December 31, 2025** | 1906580.00 | $191 | 750696.07 | $75 | 121278.65 | $12 | 42960.00 | $4 | $146599782 | $(94785154) | $51814910 | $34218900 | $86033810 |
|  Distributions to non-controlling interest holders | - | - | - | - | - | - | - | - | - | - | - | (437346) | (437346) |
|  Dividends to Series A preferred stockholders | - | - | - | - | - | - | - | - | - | (276780) | (276780) | - | (276780) |
|  Dividends to Series B preferred stockholders | - | - | - | - | - | - | - | - | - | (92230) | (92230) | - | (92230) |
|  Dividends to Series C preferred stockholders | - | - | - | - | - | - | - | - | - | (27189) | (27189) | - | (27189) |
|  Net income (loss) | - | - | - | - | - | - | - | - | - | (1648392) | (1648392) | 662608 | (985784) |
|  Preferred Series A conversion to common stock | 238094.00 | 24 | (37913.23) | (4) | - | - | - | - | (20) | - | - | - | - |
|  Preferred Series B conversion to common stock | 18432.00 | 1 | - | - | (2776.67) | (1) | - | - | - | - | - | - | - |
|  Issuance of common stock | 1052.00 | -<br> \* | - | - | - | - | - | - | 5260 | - | 5260 | - | 5260 |
|  Issuance of Series A preferred stock through reinvestment of dividends | - | - | 1979.84 | -<br> \* | - | - | - | - | 44547 | - | 44547 | - | 44547 |
|  Issuance of Series B preferred stock through reinvestment of dividends | - | - | - | - | 284.63 | -<br> \* | - | - | 6403 | - | 6403 | - | 6403 |
|  Issuance of Series C preferred stock through reinvestment of dividends | - | - | - | - | - | - | 16.67 | -<br> \* | 375 | - | 375 | - | 375 |
|  Issuance of Series A preferred stock | - | - | 32991.11 | 4 | - | - | - | - | 742296 | - | 742300 | - | 742300 |
|  Issuance of Series B preferred stock | - | - | - | - | 5577.06 | 1 | - | - | 136349 | - | 136350 | - | 136350 |
|  Issuance of Series C preferred stock | - | - | - | - | - | - | 9680.00 | 1 | 241999 | - | 242000 | - | 242000 |
|  Increase in liquidation preference - Series B preferred stock | - | - | - | - | - | - | - | - | 69173 | - | 69173 | - | 69173 |
|  Issuance of Operating Partnership Series A Preferred Units through reinvestment of dividends | - | - | - | - | - | - | - | - | - | - | - | 26866 | 26866 |
|  Increase in liquidation preference of Operating Partnership Series B Preferred Units | - | - | - | - | - | - | - | - | - | - | - | 24306 | 24306 |
|  Payment of selling commissions and fees | - | - | - | - | - | - | - | - | (255118) | - | (255118) | - | (255118) |
|  Redemptions of Series A preferred stock | - | - | - | - | - | - | - | - | (37) | - | (37) | - | (37) |
|  Redemptions of Series B preferred stock | - | - | - | - | - | - | - | - | (9) | - | (9) | - | (9) |
|  **Balance, March 31, 2026** | 2164158.00 | $216 | 747753.79 | $75 | 124363.67 | $12 | 52656.67 | $5 | $147591001 | $(96829745) | $50761564 | $34495334 | $85256898 |

---

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** | | | **Total** | | **Total Equity** |
|  | **Number of** | **Par** | **Number of** | **Par** | **Number of** | **Par** | **Number of** | **Par** | **Additional Paid-** | **Accumulated** | **Stockholders'** | **Non-controlling** | **Total Equity** |
|  **<u>Nine Months Ended March 31, 2026</u>** | **Shares \*\*** | **Value \*\*** | **Shares** | **Value** | **Shares** | **Value** | **Shares** | **Value** | **in Capital \*\*** | **Deficit** | **Equity** | **Interests** | **Total Equity** |
|  **Balance, June 30, 2025** | 1578192.98 | $158 | 766176.57 | $77 | 116112.32 | $12 | - | $- | $145050643 | $(85192267) | $59858623 | $33682820 | $93541443 |
|  Distributions to non-controlling interest holders | - | - | - | - | - | - | - | - | - | - | - | (1302351) | (1302351) |
|  Dividends to Series A preferred stockholders | - | - | - | - | - | - | - | - | - | (843430) | (843430) | - | (843430) |
|  Dividends to Series B preferred stockholders | - | - | - | - | - | - | - | - | - | (271306) | (271306) | - | (271306) |
|  Dividends to Series C preferred stockholders | - | - | - | - | - | - | - | - | - | (52569) | (52569) | - | (52569) |
|  Net income (loss) | - | - | - | - | - | - | - | - | - | (10470173) | (10470173) | 1962654 | (8507519) |
|  Preferred Series A conversion to common stock | 365351.00 | 37 | (62207.12) | (6) | - | - | - | - | (31) | - | - | - | - |
|  Preferred Series B conversion to common stock | 36969.00 | 3 | - | - | (6067.10) | (1) | - | - | (2) | - | - | - | - |
|  Pre-funded warrants conversion to common stock | 129226.50 | 13 | - | - | - | - | - | - | 116 | - | 129 | - | 129 |
|  Issuance of common stock | 54768.30 | 5 | - | - | - | - | - | - | 316987 | - | 316992 | - | 316992 |
|  Issuance of Series A preferred stock through reinvestment of dividends | - | - | 6409.45 | -<br> \* | - | - | - | - | 144214 | - | 144214 | - | 144214 |
|  Issuance of Series B preferred stock through reinvestment of dividends | - | - | - | - | 878.30 | -<br> \* | - | - | 19761 | - | 19761 | - | 19761 |
|  Issuance of Series C preferred stock through reinvestment of dividends | - | - | - | - | - | - | 16.67 | -<br> \* | 375 | - | 375 | - | 375 |
|  Issuance of Series A preferred stock | - | - | 37374.89 | 4 | - | - | - | - | 840931 | - | 840935 | - | 840935 |
|  Issuance of Series B preferred stock | - | - | - | - | 13440.15 | 1 | - | - | 329410 | - | 329411 | - | 329411 |
|  Issuance of Series C preferred stock | - | - | - | - | - | - | 52640.00 | 5 | 1315995 | - | 1316000 | - | 1316000 |
|  Increase in liquidation preference - Series B preferred stock | - | - | - | - | - | - | - | - | 203479 | - | 203479 | - | 203479 |
|  Issuance of Operating Partnership Series A Preferred Units through reinvestment of dividends | - | - | - | - | - | - | - | - | - | - | - | 79290 | 79290 |
|  Increase in liquidation preference of Operating Partnership Series B Preferred Units | - | - | - | - | - | - | - | - | - | - | - | 72921 | 72921 |
|  Payment of selling commissions and fees | - | - | - | - | - | - | - | - | (629005) | - | (629005) | - | (629005) |
|  Redemptions of common stock | (349.78) | -<br> \* | - | - | - | - | - | - | (1784) | - | (1784) | - | (1784) |
|  Redemptions of Series A preferred stock | - | - | - | - | - | - | - | - | (75) | - | (75) | - | (75) |
|  Redemptions of Series B preferred stock | - | - | - | - | - | - | - | - | (13) | - | (13) | - | (13) |
|  **Balance, March 31, 2026** | 2164158.00 | $216 | 747753.79 | $75 | 124363.67 | $12 | 52656.67 | $5 | $147591001 | $(96829745) | $50761564 | $34495334 | $85256898 |

---

\* Amount is less than $1.

\*\* After giving effect to the 1-for-10 Reverse Stock Split that was effective August 4, 2025.

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

------

[*Table of Contents*](#TABLEOFCONTENTS)

#### MacKenzie Realty Capital, Inc.

#### Consolidated Statements of Changes in Equity
(Unaudited)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | | | **Total** | | **Total Equity** |
|  | **Number of** | **Par** | **Number of** | **Par** | **Number of** | **Par** | **Additional Paid-** | **Accumulated** | **Stockholders'** | **Non-controlling** | **Total Equity** |
| **<u>Three Months Ended March 31, 2025</u>** | **Shares \*\*** | **Value \*\*** | **Shares** | **Value** | **Shares** | **Value** | **in Capital \*\*** | **Deficit** | **Equity** | **Interests** | **Total Equity** |
| **Balance, December 31, 2024** | 1347307.58 | $134 | 764887.87 | $74 | 95088.26 | $10 | $138815263 | $(70490641) | $68324840 | $29411877 | $97736717 |
| Contributions by non-controlling interest holders | - | - | - | - | - | - | - | - | - | 1968338 | 1968338 |
| Distributions to non-controlling interest holders | - | - | - | - | - | - | - | - | - | (434893) | (434893) |
| Dividends to common stockholders | - | - | - | - | - | - | - | (786925) | (786925) | - | (786925) |
| Dividends to Series A preferred stockholders | - | - | - | - | - | - | - | (286981) | (286981) | - | (286981) |
| Dividends to Series B preferred stockholders | - | - | - | - | - | - | - | (79152) | (79152) | - | (79152) |
| Net income (loss) | - | - | - | - | - | - | - | (6545266) | (6545266) | 452186 | (6093080) |
| Preferred Series A conversion to common stock | 7609.50 | 1 | (6165.51) | (1) | - | - | 7 | - | 7 | - | 7 |
| Issuance of common stock | 210351.70 | 21 | - | - | - | - | 3794230 | - | 3794251 | - | 3794251 |
| Issuance of pre-funded warrants | - | - | - | - | - | - | 1935455 | - | 1935455 | - | 1935455 |
| Issuance of Series A common stock warrants | - | - | - | - | - | - | 376268 | - | 376268 | - | 376268 |
| Issuance of Series B common stock warrants | - | - | - | - | - | - | 223409 | - | 223409 | - | 223409 |
| Stock-based compensation | 8583.70 | 1 | - | - | - | - | 199999 | - | 200000 | - | 200000 |
|  Issuance of Series A preferred stock through reinvestment of dividends | - | - | 2044.86 | -<br> \* | - | - | 46010 | - | 46010 | - | 46010 |
|  Issuance of Series B preferred stock through reinvestment of dividends | - | - | - | - | 189.11 | -<br> \* | 4255 | - | 4255 | - | 4255 |
| Issuance of Series A preferred stock | - | - | 5068.00 | 1 | - | - | 126699 | - | 126700 | - | 126700 |
| Issuance of Series B preferred stock | - | - | - | - | 13215.56 | 1 | 330389 | - | 330390 | - | 330390 |
|  Increase in liquidation preference - Series B preferred stock | - | - | - | - | - | - | 59365 | - | 59365 | - | 59365 |
|  Issuance of Operating Partnership Series A Preferred Units through reinvestment of dividends | - | - | - | - | - | - | - | - | - | 25149 | 25149 |
|  Increase in liquidation preference of Operating Partnership Series B Preferred Units | - | - | - | - | - | - | - | - | - | 24308 | 24308 |
| Payment of selling commissions and fees | - | - | - | - | - | - | (1071624) | - | (1071624) | (176445) | (1248069) |
| Redemptions of common stock | - | - | - | - | - | - | (3) | - | (3) | - | (3) |
| **Balance, March 31, 2025** | 1573852.48 | $157 | 765835.22 | $74 | 108492.93 | $11 | $144839722 | $(78188965) | $66650999 | $31270520 | $97921519 |

---

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | | | **Total** | | **Total Equity** |
|  | **Number of** | **Par** | **Number of** | **Par** | **Number of** | **Par** | **Additional Paid-** | **Accumulated** | **Stockholders'** | **Non-controlling** | **Total Equity** |
| **<u>Nine Months Ended March 31, 2025</u>** | **Shares \*\*** | **Value \*\*** | **Shares** | **Value** | **Shares** | **Value** | **in Capital \*\*** | **Deficit** | **Equity** | **Interests** | **Total Equity** |
| **Balance, June 30, 2024** | 1330257.30 | $133 | 761370.46 | $76 | 49564.56 | $5 | $137073480 | $(54715347) | $82358347 | $25590745 | $107949092 |
| Contributions by non-controlling interest holders | - | - | - | - | - | - | - | - | - | 3157990 | 3157990 |
| Distributions to non-controlling interest holders | - | - | - | - | - | - | - | - | - | (1302583) | (1302583) |
| Dividends to common stockholders | - | - | - | - | - | - | - | (3140040) | (3140040) | - | (3140040) |
| Dividends to Series A preferred stockholders | - | - | - | - | - | - | - | (860703) | (860703) | - | (860703) |
| Dividends to Series B preferred stockholders | - | - | - | - | - | - | - | (188123) | (188123) | - | (188123) |
| Net income (loss) | - | - | - | - | - | - | - | (19284752) | (19284752) | 1325269 | (17959483) |
| &nbsp;&nbsp;&nbsp; Operating Partnership Class A conversion to common<br> stock | 32.18 | -<br> \* | - | - | - | - | 3300 | - | 3300 | (3300) | - |
| Preferred Series A conversion to common stock | 11327.60 | 1 | (10805.38) | (4) | - | - | 10 | - | 7 | - | 7 |
| Issuance of common stock | 210351.70 | 21 | - | - | - | - | 3794230 | - | 3794251 | - | 3794251 |
| Issuance of pre-funded warrants | - | - | - | - | - | - | 1935455 | - | 1935455 | - | 1935455 |
| Issuance of Series A common stock warrants | - | - | - | - | - | - | 376268 | - | 376268 | - | 376268 |
| Issuance of Series B common stock warrants | - | - | - | - | - | - | 223409 | - | 223409 | - | 223409 |
| Stock-based compensation | 21883.70 | 2 | - | - | - | - | 665498 | - | 665500 | - | 665500 |
|  Issuance of Series A preferred stock through reinvestment of dividends | - | - | 6226.14 | 1 | - | - | 140090 | - | 140091 | - | 140091 |
|  Issuance of Series B preferred stock through reinvestment of dividends | - | - | - | - | 414.81 | -<br> \* | 9333 | - | 9333 | - | 9333 |
| Issuance of Series A preferred stock | - | - | 9044.00 | 1 | - | - | 226102 | - | 226103 | - | 226103 |
| Issuance of Series B preferred stock | - | - | - | - | 58513.56 | 6 | 1462833 | - | 1462839 | - | 1462839 |
| &nbsp;&nbsp;&nbsp; Increase in liquidation preference - Series B preferred<br> stock | - | - | - | - | - | - | 141096 | - | 141096 | - | 141096 |
| Operating Partnership Series A Preferred Units issued | - | - | - | - | - | - | - | - | - | 2712194 | 2712194 |
|  Issuance of Operating Partnership Series A Preferred Units through reinvestment of dividends | - | - | - | - | - | - | - | - | - | 73400 | 73400 |
|  Increase in liquidation preference of Operating Partnership Series B Preferred Units | - | - | - | - | - | - | - | - | - | 72922 | 72922 |
| Payment of selling commissions and fees | - | - | - | - | - | - | (1205828) | - | (1205828) | (356117) | (1561945) |
| Redemptions of common stock | - | - | - | - | - | - | (24) | - | (24) | - | (24) |
| Redemptions of Series A preferred stock | - | - | - | - | - | - | (5530) | - | (5530) | - | (5530) |
| **Balance, March 31, 2025** | 1573852.48 | $157 | 765835.22 | $74 | 108492.93 | $11 | $144839722 | $(78188965) | $66650999 | $31270520 | $97921519 |

---

\* Amount is less than $1.

\*\* After giving effect to the 1-for-10 Reverse Stock Split that was effective August 4, 2025.

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

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#### MacKenzie Realty Capital, Inc.

#### Consolidated Statements of Cash Flows
(Unaudited)

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** |
|  | **2026** | **2025** |
|  Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp; Net loss | $(8507519) | $(17959483) |
| &nbsp;&nbsp;&nbsp; Adjustments to reconcile net loss to net cash from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net unrealized (gain) loss on equity securities at fair value | (1643528) | 6182 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income (loss) from equity method investments at fair value | (361703) | 408116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net realized (gain) loss on investments | 764 | (232645) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment loss | - | 9500167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Straight-line rent | (94558) | (115638) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 6984439 | 7091297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of deferred financing costs and debt mark-to-market | 952454 | 1188056 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accretion of above (below) market lease, net | (109682) | (187373) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | (37363) | 528137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments income, rents and other receivables | (431811) | (134948) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Due from related entities | (493) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other assets | 278126 | (116665) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred rent and other liabilities | 39953 | (182300) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | 160922 | 149674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Due to related entities | 14129 | 4334 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash from operating activities | (2755870) | (53089) |
|  Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sale of investments | 3608279 | 828573 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments in real estate assets | (8213913) | (14869576) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase of investments | (3643314) | (225862) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash from investing activities | (8248948) | (14266865) |
|  Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowing under mortgage notes payable | 10348269 | 35320378 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments on mortgage notes payable | (997720) | (38158531) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowing under line of credit | 412000 | 8160000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from notes payable | 3418449 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments on notes payable | (1815692) | (218259) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment of financing fees | (459857) | (1845710) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends to common stockholders | - | (4015938) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends to Series A preferred stockholders | (709752) | (718365) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends to Series B preferred stockholders | (46273) | (25829) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends to Series C preferred stockholders | (25005) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Series A preferred stock | 840935 | 226103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Series B preferred stock | 329411 | 1462839 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Series C preferred stock | 1316000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of common stock | 317121 | 3794251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of pre-funded warrants | - | 1935455 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Series A common stock warrants | - | 376268 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of Series B common stock warrants | - | 223409 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment on finance lease liabilities | (203389) | (169194) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment of selling commissions and fees | (352765) | (1596214) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contributions by non-controlling interests holders | - | 2588412 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distributions to non-controlling interests holders | (1148818) | (1104011) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Redemptions of common stock | (1784) | (24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Redemptions of Series A preferred stock | (75) | (5530) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Redemptions of Series B preferred stock | (13) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital pending acceptance | 117939 | 469250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash from financing activities | 11338981 | 6698760 |

---

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

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#### MacKenzie Realty Capital, Inc.

#### Consolidated Statements of Cash Flows
(Unaudited)

---

| | | |
|:---|:---|:---|
|  Net increase (decrease) in cash, cash equivalents and restricted cash | $334163 | $(7621194 |
|  Cash, cash equivalents and restricted cash at beginning of the period | 4116321 | 13077339 |
|  Cash, cash equivalents and restricted cash at end of the period | $4450484 | $5456145 |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents at end of the period | $3975776 | $5143928 |
| &nbsp;&nbsp;&nbsp; Restricted cash at end of the period | 342286 | 126992 |
| &nbsp;&nbsp;&nbsp; Cash at end of the period classified as assets held for sale | 132422 | 185225 |
| &nbsp;&nbsp;&nbsp; Total cash, cash equivalents, restricted cash and cash classified as held for sale at end of the period | $4450484 | $5456145 |
|  Supplemental disclosure of non-cash financing activities and other cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp; Issuance of Series A preferred stock through reinvestment of dividends | $144214 | $140091 |
| &nbsp;&nbsp;&nbsp; Issuance of Series B preferred stock through reinvestment of dividends | $19761 | $9333 |
| &nbsp;&nbsp;&nbsp; Increase in liquidation preference of Series B preferred stock | $203479 | $141096 |
| &nbsp;&nbsp;&nbsp; Issuance Operating Partnership Preferred Units - Series A through reinvestment of dividends | $79290 | $73400 |
| &nbsp;&nbsp;&nbsp; Cash paid for interest | $5632244 | $5319505 |
| &nbsp;&nbsp;&nbsp; Increase in liquidation preference of Operating Partnership Preferred Units - Series B | $72921 | $72922 |
| &nbsp;&nbsp;&nbsp; Preferred Series A conversion to common stock | $2144562 | $268162 |
| &nbsp;&nbsp;&nbsp; Preferred Series B conversion to common stock | $233717 | $- |
| &nbsp;&nbsp;&nbsp; Conversion of Series B preferred stock liquidation preference (9% non-cash dividend) to common stock | $8804 | $- |
| &nbsp;&nbsp;&nbsp; Reclassification of prepaid expenses and other assets to mortgage notes payable, net | $293042 | $- |
| &nbsp;&nbsp;&nbsp; Capitalized construction in progress outstanding as accounts payable and accrued expenses | $9540 | $1647391 |
| &nbsp;&nbsp;&nbsp; Issuance of the Operating Partnership Preferred Units for the purchase of Green Valley Medical Center, LP (Note 1) | $- | $2712194 |
| &nbsp;&nbsp;&nbsp; Fair value of assets acquired from consolidation of Green Valley Medical Center, LP | $- | $13621753 |
| &nbsp;&nbsp;&nbsp; Fair value of liabilities assumed from consolidation of Green Valley Medical Center, LP | $- | $8904457 |
| &nbsp;&nbsp;&nbsp; Stock-based compensation | $- | $665500 |
| &nbsp;&nbsp;&nbsp; Operating Partnership Class A conversion to common stock | $- | $3300 |

---

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

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#### MacKenzie Realty Capital, Inc.

#### Notes to Consolidated Financial Statements

#### March 31, 2026
(Unaudited)

#### NOTE 1 – PRINCIPAL BUSINESS AND ORGANIZATION
MacKenzie Realty Capital, Inc. (the "Parent Company" together with its subsidiaries as discussed below, collectively, the "Company," "we," "us," or "our") was incorporated under the general corporation laws of the State of Maryland on January 27, 2012. We have elected to be treated as a real estate investment trust ("REIT") as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). We are authorized to issue 100,000,000 shares, of which (i) 80,000,000 are designated as common stock, with a $0.0001 par value per share; and (ii) 20,000,000 are designated as preferred stock, with a $0.0001 par value per share. We commenced our operations on February 28, 2013, and our fiscal year-end is June 30.

We are registered under Section 12(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), and we will continue to file periodic reports on Form 10-K, Form 10-Q, and Form 8-K, as well as file proxy statements and other reports required under the Exchange Act.

We filed our initial registration statement with the Securities and Exchange Commission ("SEC") in 2012 and have since completed multiple public offerings of our common stock. On November 6, 2024, The Nasdaq Stock Market ("Nasdaq") approved the listing of our common stock, and trading commenced on the Nasdaq Capital Market on November 11, 2024.

We are externally managed by MacKenzie Capital Management, LP ("MacKenzie") under a turnkey administration agreement dated and effective as of January 1, 2021 (the "Administration Agreement"). MCM Advisers, LP (the "Investment Adviser"), an affiliate of MacKenzie, advises us in our assessment, acquisition, and divestiture of securities under the advisory agreement amended and restated effective January 1, 2021 (the "Amended and Restated Investment Advisory Agreement"). Another affiliate of MacKenzie, MacKenzie Real Estate Advisers, LP (the "Real Estate Adviser"; together, the "Investment Adviser" and the "Real Estate Adviser" may be referred to as "Adviser" or "Advisers" as appropriate) advises us in our assessment, acquisition, and divestiture of real estate assets. We pursue a strategy focused on investing primarily in real estate assets, and to a lesser extent (intended to be less than 20% of our portfolio) in illiquid or non-traded debt and equity securities issued by U.S. companies generally owning commercial real estate. These companies are likely to be non-traded REITs, small-capitalization publicly traded REITs, public and private real estate limited partnerships, and limited liability companies.

The Company conducts substantially all of its real estate operations through MacKenzie Realty Operating Partnership, LP (the "Operating Partnership"), which was formed in May 2020. As of March 31, 2026, we own all limited partnership units of the Operating Partnership except for 81,909.89 Class A Limited Partnership units, 1,067,028.35 Series A preferred units and 43,212.86 Series B preferred units. Upon a limited partner's request for redemption or upon liquidation of the Operating Partnership, the 81,909.89 Class A Limited Partnership units are convertible into the Company's common stock on a 10:1 basis or, at the Company's election, for cash based upon the 10-day average trading price of the Company's stock, also on a 10:1 basis (as a result of the Company's 1-for-10 common stock reverse stock split (the "Reverse Stock Split") on August 4, 2025; previously the units were convertible on a 1:1 basis). Upon a request of a holder of Series A or Series B preferred units, the Company may elect to repurchase such units with the Company's common stock based upon the volume weighted average price per share of common stock for the twenty (20) trading days prior to the repurchase date, or at the Company's election or upon liquidation, the 1,067,028.35 Series A preferred units are entitled to a liquidation preference of $26,675,709 (based on the stated value of $25 per share for the Series A preferred units) and the 43,212.86 Series B preferred units are entitled to a liquidation preference of $1,080,322 (based on the stated value of $25 per share for the Series B preferred units). The Parent Company has contributed net capital of $73,650,033 to the Operating Partnership since inception; thus, the Class A, Series A and Series B preferred units represent approximately 27.97% of all capital contributions.

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The consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, MacKenzie NY Real Estate 2 Corp. ("MacKenzie NY 2"), a taxable REIT subsidiary, and their majority-owned and controlled subsidiaries, including joint ventures and property-owning entities acquired or formed to own, operate, develop, or manage multifamily, office, and mixed-use real estate properties. The consolidated entities include Madison-PVT Partners LLC ("Madison"), PVT-Madison Partners LLC ("PVT"), Hollywood Hillview Owner, LLC ("Hollywood Hillview"), MacKenzie-BAA IG Shoreline LLC ("MacKenzie Shoreline"), MacKenzie Satellite Place Corp. ("MacKenzie Satellite"), MRC Aurora, LLC ("MRC Aurora"), 220 Campus Lane, LLC ("220 Campus Lane"), Campus Lane Residential, LLC ("Campus Lane Residential"), GV Executive Center, LLC ("GVEC"), Innovate Napa, LLC ("Innovate Napa"), MRC QRS, Inc. ("MRC QRS"), and various limited partnerships (each a "Wiseman Partnership") acquired in connection with the Wiseman transaction, including First & Main, LP ("First & Main"), 1300 Main, LP ("1300 Main"), Woodland Corporate Center Two, LP ("Woodland Corporate Center Two"), Main Street West, LP ("Main Street West"), One Harbor Center, LP ("One Harbor Center"), and Green Valley Medical Center, LP ("Green Valley Medical Center"). Each Wiseman Partnership owns a Class A or B office property in Napa, Fairfield, Suisun, or Woodland, California (the "Wiseman Properties"). Intercompany balances and transactions are eliminated in consolidation.

On January 1, 2026, the Company contributed all of its multi-family residential properties (Commodore, The Park View, Hollywood and Shoreline Apartments and Aurora at Green Valley) and Blue Ridge development project to a newly formed entity MacKenzie Apartment Communities, Inc. ("MAC") in exchange for 1,906,580 shares of MAC (on a 1:1 basis with the Parent Company's outstanding shares). MAC is focused on developing and owning multi-family properties on the West Coast. The Parent Company is the sole shareholder of MAC as of March 31, 2026.

In connection with the formation of MAC, MAC Operating Partnership, LP ("MAC OP") was established as an operating partnership through which all of MAC's business is conducted. The contributed properties and development project are held by MAC OP, which directly or indirectly owns and operates a portfolio of six residential properties. MAC owns all the limited partnership units and is the sole general partner of MAC OP.

We are conducting a Regulation A offering of our preferred stock pursuant to an offering circular qualified by the SEC on January 29, 2025 and amended in June 2025 (as amended, the "Offering Circular") which permits the offer and sale of up to $72.90 million of Series A, Series B, and Series C preferred stock, at an offering price of $22.50 per Series A share and $25.00 per Series B or Series C share. Prior Regulation A offerings have been terminated or superseded.

In November 2024, we filed a new shelf registration statement on Form S-3 (the "Form S-3 Registration Statement") to sell our common and preferred stock, warrants, rights and units up to an aggregate of $75 million. The Form S-3 Registration Statement was declared effective by the SEC on January 15, 2025. Also on January 15, 2025, we entered into an Equity Distribution Agreement (the "ATM Sales Agreement") with Maxim Group LLC (the "Sales Agent" or "Maxim") pursuant to which we may issue and sell shares of our common stock, covered by the prospectus supplement filed with the SEC on January 15, 2025 and accompanying base prospectus dated January 15, 2025 (together, the "ATM Prospectus") , subject to maintaining compliance with General Instruction I.B.6 of Form S-3 Registration Statement which requires that in no event will we sell securities in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75 million.

On January 7, 2026, in connection with the at the market offering program (the "ATM Offering") through which the Company may sell up to $20,000,000 of shares of the Company's common stock at $0.0001 par value per share, the Company entered into an amendment to the ATM Sales Agreement with Maxim.

In accordance with the terms of the amendment, the ATM Sales Agreement will now terminate upon the earlier of (i) the issuance and sale of all of the common stock subject to the ATM Sales Agreement, (ii) termination of the ATM Sales Agreement by the Company or the Sales Agent with 15 days written notice, or (iii) July 15, 2027.

On August 26, 2024, the Company entered into a letter agreement with Maxim to provide general financial advisory and investment banking services to the Company in connection with, among other things, strategic planning, potential uplisting to a U.S. exchange (Nasdaq, New York Stock Exchange), and potential rights offering, equity issuance or other mechanisms to enhance corporate and shareholder value. In connection with the agreement, the Company issued to Maxim's affiliate in a private placement 13,300 shares of common stock, representing approximately 1% of the Company's outstanding stock. The common stock does not have any conversion rights.

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On August 4, 2025, the Company effected a 1-for-10 Reverse Stock Split of its common stock, increasing the par value from $0.0001 per share to $0.001 per share. However, on the same date, the Company amended its charter to decrease the par value back to $0.0001. The Reverse Stock Split did not change the number of authorized shares of common stock. Prior to the Reverse Stock Split, the Company had 16,760,978 shares of common stock outstanding. Immediately following the Reverse Stock Split (and after giving effect to the payment of cash in lieu of fractional shares), the Company had 1,675,776 shares of common stock outstanding. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders entitled to receive a fractional share instead received a cash payment equal to the fraction of a share multiplied by the closing price of the Company's common stock on The Nasdaq Capital Market on August 1, 2025, as adjusted for the Reverse Stock Split, without interest. All common share and per-share information in the accompanying consolidated financial statements and notes have been retroactively adjusted to reflect the Reverse Stock Split.

As of March 31, 2026, we have raised approximately $125.76 million from our common stock public offerings (including $4.80 million from our Registered Offering and the concurrent private placement, and $1.80 million from the ATM offering), $19.58 million from our Series A preferred stock offering, $3.64 million from our Series B preferred stock offering and $1.32 million from our Series C preferred stock offering pursuant to the Offering Circular. As of March 31, 2026, we have issued shares of common stock, Series A preferred stock, Series B preferred stock, and Series C preferred stock with gross proceeds of $15.56 million, $0.58 million, $0.03 million, and a minimal worth of shares, respectively, under our dividend reinvestment plans (each a "DRIP" and together the "DRIPs"). Of the total shares issued by us as of March 31, 2026, approximately $14.28 million, $0.11 million and a minimal worth of shares of common stock, Series A preferred stock and Series B and Series C preferred stock have been repurchased under our share repurchase program, respectively. As of March 31, 2026, we have 2,164,158.00 shares of common stock, 747,753.79 shares of Series A preferred stock, 124,363.67 shares of Series B preferred stock, and 52,656.67 shares of Series C preferred stock outstanding.

#### NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
*Basis of Presentation and Consolidation Policy*

The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X. We follow the accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of our wholly owned consolidated subsidiaries and majority-owned controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited consolidated financial statements reflect all normal recurring adjustments, which are, in the opinion of management, necessary for the fair presentation of our results for the interim periods presented. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

The assets and liabilities of each of the consolidated subsidiaries are separate from those of the Parent Company and the Operating Partnership. Consequently, the assets of the consolidated subsidiaries are not available to settle the obligations of the Parent Company or the Operating Partnership, and the obligations of the subsidiaries does not constitute obligations of the Parent Company or the Operating Partnership.

These unaudited consolidated financial statements should be read in conjunction with the audited financial statements for the year ended June 30, 2025, included in our annual report on Form 10-K filed with the SEC.

There have been no changes in the significant accounting policies from those disclosed in the audited financial statements for the year ended June 30, 2025.

Certain prior period information has been reclassified to conform to the current year end presentation. The reclassification has no effect on our consolidated balance sheet or the consolidated statement of operations as previously reported.

*Use of Estimates*

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect reported asset values, liabilities, revenues, expenses and unrealized gains (losses) on investments during the reporting period. Material estimates are susceptible to change, and actual results could differ from those estimates.

*Cash, Cash Equivalents and Restricted Cash*

Our cash and cash equivalents represent current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. We limit cash investments to financial institutions with high credit standing; therefore, we believe our cash investments are not exposed to any significant credit risk. The restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, and debt service and leasing costs held by lenders. These balances are insured by the Federal Deposit Insurance Corporation up to certain limits. Often, the cash balances held in financial institutions by us may exceed these insured limits.

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Restricted cash is subject to legal or contractual restrictions as to withdrawal or use, including restrictions that require the funds to be used for a specified purpose and restrictions that limit the purpose for which the funds can be used.

*Investment Income Receivable*

Investment income receivable represents dividends, distributions, and sales proceeds recognized in accordance with our revenue recognition policy but not yet received as of the date of the consolidated financial statements. We monitor and adjust our receivables, and those deemed to be uncollectible are written-off only after all reasonable collection efforts are exhausted. We believe, based on the credit worthiness of the obligors, that all investment income receivable balances outstanding as of March 31, 2026 and June 30, 2025, are collectible and do not require recording any uncollectible allowance.

*Rental, Reimbursement and Other Property Income*

We generate rental revenue by leasing office space and apartment units to a building's tenants. These tenant leases fall under the scope of Accounting Standards Codification ("ASC") Topic 842 and are classified as operating leases. Revenues from such leases are recognized on a straight-line basis over the terms of the lease agreements.

*Rents and Other Receivables*

We will periodically evaluate the collectability of amounts due from tenants and maintain an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. We exercise judgment in establishing these allowances and consider payment history and current credit status of tenants in developing these estimates. As of March 31, 2026 and June 30, 2025, we recognized an allowance for doubtful accounts of $137,285 and $259,590, respectively.

*Capital Pending Acceptance*

We conduct closings for new issuance of our Series A, Series B and Series C preferred stock and MRC Aurora preferred units twice per month and admit new stockholders effective beginning the first day of each month. Subscriptions are effective only upon our acceptance. Any gross proceeds received from subscriptions which are not accepted as of the period-end are classified as capital pending acceptance in the consolidated balance sheets. We close our common stock ATM sales on a daily basis. As of March 31, 2026, capital pending acceptance related to our Series A preferred stock, Series B preferred stock and Series C preferred stock was $131,350. As of June 30, 2025, capital pending acceptance related to our Series A and Series B preferred stock was $13,411.

*Income Taxes and Deferred Tax Liability*

The Parent Company has elected to be treated as a REIT for tax purposes under the Code and as a REIT, is not subject to federal income taxes on amounts that it distributes to the stockholders, provided that, on an annual basis, it generally distributes at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meet certain other conditions. To the extent it satisfies the annual distribution requirement but distribute less than 100% of its REIT taxable income, it will be subject to U.S. federal corporate income tax on their undistributed taxable income. In addition, it will be subject to a 4% nondeductible excise tax if the actual amount that it pays to its stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

The Parent Company satisfied the annual dividend payment and other REIT requirements for the tax year ended December 31, 2025. Therefore, it did not incur any tax expense or excise tax on its income from operations during the quarterly periods within the tax year 2025. In addition, for the tax year 2026, the Parent Company intends to pay the requisite amounts of dividends during the year and meet other REIT requirements such that the Parent Company will not owe any income taxes. Therefore, the Parent Company did not record any income tax provisions during any fiscal periods within the tax year 2026.

MacKenzie NY 2 is subject to corporate federal and state income tax on their taxable income at regular statutory rates. As of March 31, 2026, it did not have any taxable income for tax years 2025 and 2026. Therefore, we did not record any tax provisions during any fiscal periods within the tax years 2025 and 2026. MacKenzie Satellite, MRC QRS and MAC are qualified REIT subsidiaries of the Parent Company. Therefore, they do not file a separate tax return.

The Operating Partnership is a limited partnership. 220 Campus Lane, GVEC and Innovate Napa are limited liability companies. First & Main, 1300 Main, Woodland Corporate Center Two, Main Street West, One Harbor Center, LP and Green Valley Medical Center, LP are limited partnerships. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

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MAC OP is a limited partnership. Hollywood Hillview, MacKenzie Shoreline, Madison, PVT, Campus Lane Residential and MRC Aurora are limited liability companies. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

We follow ASC 740, Income Taxes ("ASC 740"), to account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax liabilities attributable to the net unrealized investment gain (losses) on existing investments. In estimating future tax consequences, we consider all future events, other than enactments of changes in tax laws or rates. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized as income or expense in the period of enactment. In addition, ASC 740 provides guidance for recognizing, measuring, presenting, and disclosing uncertain tax positions in the financial statements. As of March 31, 2026 and June 30, 2025, there were no uncertain tax positions. Management's determinations regarding ASC 740 are subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof.

*Subsequent Events*

Subsequent events are events or transactions that occur after the date of the consolidated balance sheets but before the date the consolidated financial statements are issued. Subsequent events that provide additional evidence about conditions that existed at the date of the consolidated balance sheets are considered in the preparation of the consolidated financial statements presented herein. Subsequent events that occur after the date of the consolidated balance sheets that do not provide evidence about the conditions that existed as of the date of the consolidated statements of changes in equity are considered for disclosure based upon their significance in relation to our consolidated financial statements taken as a whole.

*Fair Value of Financial Instruments*

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. We believe that the carrying amounts of our financial instruments, consisting of cash, restricted cash, investments income, rents and other receivables, prepaid expenses and other assets, mortgage notes payable, net, line of credit and notes payable, net, accounts payable and accrued liabilities, below-market lease liabilities, net, deferred rent and other liabilities and due to related entities, approximate the fair values of such items based on their nature, terms, and interest rates.

*Equity Securities*

We have minority and non-controlling equity investments in various limited partnerships and non-traded entities, which do not have readily determinable fair values. We do not have controlling interests in these entities. Thus, these investments have been recorded as investments in equity securities in accordance with ASC Topic 321, *Investments – Equity Securities*, and measured at fair value. The changes in the fair value of these investments are recorded in the consolidated statements of operations.

*Equity Method Investments with Fair Value Option Election*

We elected the fair value option of accounting for the investments listed below that would have otherwise been recorded under the equity method of accounting. The primary purpose of electing the fair value option was to enhance the transparency of our financial condition. Changes in the fair value of these investments, which are inclusive of equity in income, are recorded in the consolidated statements of operations during the period such changes occur. The below investments would have been accounted for under the equity method if the fair value method had not been elected as of March 31, 2026 and June 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Investee** | **Legal Form** | **Asset Type** | **% Ownership** | **Fair Value as of**<br> **March 31, 2026** |
| Lakemont Partners, LLC | Limited Liability Company | LP Interest | 17.02% | $708780 |
| Martin Plaza Associates, LP | Limited Partnership | GP and LP Interest | 25.00% | 596258 |
| Westside Professional Center I, LP | Limited Partnership | GP Interest | 1.00% \* | 1182116 |
| Total |  |  |  | $2487154 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Investee** | **Legal Form** | **Asset Type** | **% Ownership** | **Fair Value as of**<br> **June 30, 2025** |
| Lakemont Partners, LLC | Limited Liability Company | LP Interest | 17.02% | $711740 |
| Martin Plaza Associates, LP | Limited Partnership | GP and LP Interest | 25.00% | 531544 |
| Westside Professional Center I, LP | Limited Partnership | GP Interest | 1.00% \* | 882167 |
| Total |  |  |  | $2125451 |

---

\* The general partner has a 1% partnership interest but is also entitled to profit sharing distributions ranging from 25% to 50% after certain thresholds are met.

*Assets and Liabilities Held for Sale*

We classify long-lived assets or disposal groups to be sold as held for sale in the period in which all of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances
 beyond our control extend the period of time required to sell the asset or disposal group beyond one year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value. The price at which a long-lived asset (disposal group) is being marketed is
 indicative of whether the entity currently has the intent and ability to sell the asset (disposal group). A market price that is reasonable in relation to fair value indicates that the asset (disposal group) is available for immediate sale,
 whereas a market price in excess of fair value indicates that the asset (disposal group) is not available for immediate sale; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

On the day that these criteria are met, we suspend depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. Assets and liabilities of the disposal group are presented separately on the consolidated balance sheets and measured at the lower of carrying value or fair value less costs to sell. Prior period balances have been reclassified as assets and liabilities held for sale for comparative purposes on the consolidated balance sheet as of June 30, 2025. Woodland Corporate Center Two was listed for sale as discussed in Note 5.

*Leases*

Six of our properties, 1300 Main, Main Street West, Woodland Corporate Center, Green Valley Executive Center, One Harbor Center and Green Valley Medical Center had solar equipment leases in place at the time of our acquisition. Therefore, these existing solar leases were reassessed at the acquisition date and were recorded as finance leases in accordance with ASC 842. We record leases on the consolidated balance sheets in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates that we could obtain for similar loans as of the date of commencement or renewal. We do not record leases on the consolidated balance sheets that are classified as short term (less than one year).

At lease inception, we determine the lease term by considering the minimum lease term and all optional renewal periods that are reasonably certain to be exercised. The lease term is also used to calculate straight-line rent expense. The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be exercised. Our leases do not contain residual value guarantees or material variable lease payments that will impact our ability to pay dividends or cause us to incur additional expenses.

The amortization of the right-of-use asset arising from finance leases is expensed through depreciation and amortization expense and the interest on the related lease liability is expensed through interest expense on our consolidated statements of operations.

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*Impairment of Real Estate Assets*

We continually monitor events and changes in circumstances that could indicate that the carrying value of our real estate and related intangible assets may not be recoverable. When indicators of potential impairment emerge, we assess whether we will recover the carrying value of the asset through its undiscounted future cash flows and its eventual disposition. Based on this assessment, if we do not believe that we will recover the carrying value of the real estate and related intangible assets, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets.

During the three and nine months ended March 31, 2026, we did not record any impairment loss. However, during the year ended June 30, 2025, due to an early lease termination by the anchor tenant at our Main Street West Office Building, we recognized an accumulated impairment loss of $9,500,167, of which none and $9,500,167 were recognized during the three and nine months ended March 31, 2025, respectively. We utilized a third-party appraisal to estimate the fair value of the property and determine the impairment amount. We consider these inputs as Level III measurements within the fair value hierarchy.

*Stock-based Compensation*

ASC 718, Stock-based Compensation, requires generally that all equity awards granted to employees and consultants be accounted for at fair value. This fair value is measured at grant date for stock settled awards, and at subsequent exercise or settlement for cash-settled awards. Under this method, we recorded the 13,300 shares of common stock issued to Maxim discussed in Note 1 at fair value as compensation for services rendered to the Company. The fair value is computed based on the trading price of the common stock on the OTCQX capital market at the grant date of August 26, 2024. Additionally, we recorded the 8,583.70 shares of common stock issued to OTB Capital discussed in Note 1 at fair value in consideration for their marketing and distribution services. The fair value is computed based on the public trading price of the common stock at the grant date of February 3, 2025.

*Recent Accounting Pronouncements*

In December 2023, the FASB issued ASU 2023-09, *Income Taxes – Improvements to Income Tax*, to enhance the transparency and decision usefulness of income tax disclosures, primarily related to rate reconciliation and income taxes paid information. The amendment is effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis, with the option to apply retrospectively. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The adoption of these amendments did not have any impact on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, *Disaggregation of Income Statement Expenses*. The ASU's purpose is to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). This ASU is effective for the Company's annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements.

#### NOTE 3 – INVESTMENTS IN REAL ESTATE
The following tables provide summary information regarding our operating properties, which are owned through our subsidiaries. The ownership interest shown below is the percentage of the property owned by the subsidiary, not the percentage of the subsidiary owned by the Company.

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<u>Consolidated Operating Properties</u>

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| | | | | |
|:---|:---|:---|:---|:---|
| Property Name: | Commodore Apartments | The Park View Apartments | Hollywood Apartments | Shoreline Apartments |
| Property Owner: | Madison-PVT Partners LLC | PVT-Madison Partners LLC | PT Hillview GP, LLC | MacKenzie-BAA IG Shoreline LLC |
| Location: | Oakland, CA | Oakland, CA | Hollywood, CA | Concord, CA |
| Number of Tenants: | 43 | 37 | 51 | 75 |
| Year Built: | 1912 | 1929 | 1917 | 1968 |
| Ownership Interest: | 100% | 100% | 100% | 100% |
| Property Name: | Satellite Place Office Building | First & Main Office Building | 1300 Main Office Building | Woodland Corporate Center |
| Property Owner: | MacKenzie Satellite Place Corp. | First & Main, LP | 1300 Main, LP | Woodland Corporate Center Two, LP |
| Location: | Duluth, GA | Napa, CA | Napa, CA | Woodland, CA |
| Number of Tenants: | 5 | 8 | 7 | 12 |
| Year Built: | 2002 | 2001 | 2020 | 2004 |
| Ownership Interest: | 100% | 100% | 100% | 100% |
| Property Name: | Main Street West Office Building | 220 Campus Lane Office Building | Green Valley Executive Center | One Harbor Center |
| Property Owner: | Main Street West, LP | 220 Campus Lane, LLC | GV Executive Center, LLC | One Harbor Center, LP |
| Location: | Napa, CA | Fairfield, CA | Fairfield, CA | Suisun, CA |
| Number of Tenants: | 9 | 6 | 15 | 12 |
| Year Built: | 2007 | 1990 | 2006 | 2001 |
| Ownership Interest: | 100% | 100% | 100% | 100% |
| Property Name: | Green Valley Medical Center | Aurora at Green Valley |  |  |
| Property Owner: | Green Valley Medical Center, LP | MRC Aurora, LLC |  |  |
| Location: | Fairfield, CA | Fairfield, CA |  |  |
| Number of Tenants: | 13 | 54 |  |  |
| Year Built: | 2002 | 2025 |  |  |
| Ownership Interest: | 100% | 100% |  |  |

---

In addition to our commercial and residential real estate properties, we own a vacant parcel adjacent to the 220 Campus Lane Office Building in Fairfield, California. We acquired the vacant land in September 2023 with the long-term objective of developing it into a multi-family residential community. This project, known as Blue Ridge, is expected to consist of 84 luxury multi-family units in Solano County, one of the fastest-growing counties in California. The entitlement process for the vacant land is on-going. Our goal is to commence construction in fall 2027; however, this is subject to the city's approval of our development application submitted in April 2024 and to securing the necessary financial resources. The Company is currently evaluating potential development and financing structures for the project, including discussions with a third-party developer pursuant to which the Company may contribute the land and the third party may arrange construction financing and development capital for the project.

The total depreciation expense of our operating properties for the three and nine months ended March 31, 2026 were $1,719,022 and $5,468,353, respectively. The total depreciation expense of our operating properties for the three and nine months ended March 31, 2025 were $1,860,548 and $4,967,727, respectively.

*Operating Leases:*

Our real estate assets are leased to tenants under operating leases that contain varying terms and expirations. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. We retain substantially all the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, we do not require a security deposit from tenants on our commercial real estate properties, depending upon the terms of the respective leases and the creditworthiness of the tenants. Even when required, security deposits generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of the security deposit. Security deposits received in cash related to tenant leases are included in other accrued liabilities in the accompanying consolidated balance sheets and were immaterial as of March 31, 2026 and June 30, 2025.

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The following table presents the components of income from real estate operations for the three and nine months ended March 31, 2026:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended**<br>**March 31, 2026** | **Nine Months Ended**<br>**March 31, 2026** |
| Lease income - Operating leases | $5104037 | $13550805 |
| Variable lease income <sup>(1)</sup> | 337467 | 1023819 |
|  | $5441504 | $14574624 |

---

<sup>(1)</sup> Primarily includes tenant reimbursements for utilities and common area maintenance.

The following table presents the components of income from real estate operations for the three and nine months ended March 31, 2025:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended**<br>**March 31, 2025** | **Nine Months Ended**<br>**March 31, 2025** |
| Lease income - Operating leases | $3931309 | $16291143 |
| Variable lease income <sup>(1)</sup> | 342337 | 965048 |
|  | $4273646 | $17256191 |

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<sup>(1)</sup> Primarily includes tenant reimbursements for utilities and common area maintenance.

As of March 31, 2026, the future minimum rental income from our real estate properties under non-cancelable operating leases are as follows:

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| | |
|:---|:---|
| **Year ended June 30, :** | **Rental Income** |
| 2026 (remainder) | $3797395 |
| 2027 | 11991149 |
| 2028 | 8821195 |
| 2029 | 6648044 |
| 2030 | 5409610 |
| Thereafter | 13802653 |
| Total | $50470046 |

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#### Lease Intangibles, Above-Market Lease Assets and Below-Market Lease Liabilities, Net
As of March 31, 2026 and June 30, 2025, our acquired lease intangibles, above-market lease assets, and below-market lease liabilities were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** |
|  | **Lease Intangibles** | **Above-Market**<br> **Lease Assets** | **Below-Market**<br> **Lease Liabilities** |
|  Cost | $10285888 | $628574 | $2125443 |
|  Accumulated amortization | (7051283) | (439299) | (1771441) |
|  Accumulated impairment loss | (232915) | (7840) | (58112) |
|  Total | $3001690 | $181435 | $295890 |
|  Weighted average amortization period (years) | 5.5 | 4.6 | 4.8 |

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| | | | |
|:---|:---|:---|:---|
|  | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** |
|  | **Lease Intangibles** | **Above-Market**<br> **Lease Assets** | **Below-Market**<br> **Lease Liabilities** |
| Cost | $11184664 | $628572 | $2643300 |
| Accumulated amortization | (7038895) | (338589) | (2082971) |
| Accumulated impairment loss | (121974) | (4440) | (29855) |
| Total | $4023795 | $285543 | $530474 |
| Weighted average amortization period (years) | 4.8 | 4.6 | 4.8 |

---

Our amortization of lease intangibles, above-market lease assets and below-market lease liabilities for the three and nine months ended March 31, 2026, were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31, 2026** | **Three Months Ended March 31, 2026** | **Three Months Ended March 31, 2026** |
|  | **Lease Intangibles** | **Above-Market** <br> **Lease Assets** | **Below-Market**<br> **Lease Liabilities** |
| Amortization | $395714 | $22923 | $(53144) |

---

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended March 31, 2026** | **Nine Months Ended March 31, 2026** | **Nine Months Ended March 31, 2026** |
|  | **Lease Intangibles** | **Above-Market**<br> **Lease Assets** | **Below-Market**<br> **Lease Liabilities** |
| Amortization | $1516086 | $107723 | $(217405) |

---

Our amortization of lease intangibles, above-market lease assets and below-market lease liabilities for the three and nine months ended March 31, 2025, were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** | **Three Months Ended March 31, 2025** |
|  | **Lease Intangibles** | **Above-Market**<br> **Lease Assets** | **Below-Market**<br> **Lease Liabilities** |
| Amortization | $774069 | $46743 | $(104788) |

---

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended March 31, 2025** | **Nine Months Ended March 31, 2025** | **Nine Months Ended March 31, 2025** |
|  | **Lease Intangibles** | **Above-Market**<br> **Lease Assets** | **Below-Market**<br> **Lease Liabilities** |
| Amortization | $2123570 | $162268 | $(349641) |

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The following table provides the projected amortization expense and adjustments to revenue from tenants for intangible assets and liabilities for the next five years:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** |
|  | **2026 (remainder)** | **2027** | **2028** | **2029** | **2030** | **Thereafter** |
|  In-place leases, to be included in amortization | $331883 | $882526 | $532091 | $390380 | $311439 | $554901 |
|  Above-market lease intangibles | $22923 | $71665 | $36119 | $30827 | $24388 | $3353 |
|  Below-market lease liabilities | (55818) | (133677) | (48433) | (36413) | (6829) | (14720) |
|  | $(32895) | $(62012) | $(12314) | $(5586) | $17559 | $(11367) |

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#### NOTE 4 – INVESTMENTS
The following table summarizes the composition of our equity method investments with fair value option election and other equity securities at fair value as of March 31, 2026 and June 30, 2025. On the consolidated balance sheets, these investments are reflected in two separate lines: (i) investments at fair value, which are classified as equity securities under ASC Topic 321, and (ii) equity method investments with fair value option election.

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| | | |
|:---|:---|:---|
| **<u>Asset Type</u>** | **Fair Value**<br>**March 31, 2026** | **Fair Value**<br>**June 30, 2025** |
| Non Traded Companies | $3418039 | $1749528 |
| GP Interests (Equity method investment with fair value option election) | 1578374 | 1213711 |
| LP Interests (Equity method investment with fair value option election) | 908780 | 911740 |
| Publicly Traded Company | 9288 | - |
| Total | $5914481 | $3874979 |

---

During the three and nine months ended March 31, 2026, we realized a total net gain of $621,080 and net loss of $764, respectively, from nine investment liquidations and disposals (Highlands REIT, Inc., Starwood Real Estate Income Trust, Inc. – Class S, Starwood Real Estate Income Trust, Inc. – Class I, SmartStop Self Storage REIT, Inc. – Class A, SmartStop Self Storage REIT, Inc. – Class A sold short, SmartStop Self Storage REIT, Inc. – Class T, National Healthcare Properties, Inc., CNL Healthcare Properties, Inc. and Sonida Senior Living, Inc.).

During the three and nine months ended March 31, 2025, we realized a total net gain of $18,430 and $232,645, respectively, from three investment liquidations and disposals (Blackstone Real Estate Income Trust, Inc., Highlands REIT, Inc., and 5210 Fountaingate, LP).

The following table presents fair value measurements of our investments as of March 31, 2026 and June 30, 2025, according to the fair value hierarchy that is described in our annual report on Form 10-K:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** |
| **<u>Asset Type</u>** | **Total** | **Level I** | **Level II** | **Level III** |
| Non Traded Companies | $3418039 | $- | $- | $3418039 |
| GP Interests | 1578374 | - | - | 1578374 |
| LP Interests | 908780 | - | - | 908780 |
| Publicly Traded Company | 9288 | 9288 | - | - |
|  | $5914481 | $9288 | $- | $5905193 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** |
| **<u>Asset Type</u>** | **Total** | **Level I** | **Level II** | **Level III** |
| Non Traded Companies | $1749528 | $- | $- | $1749528 |
| GP Interests | 1213711 | - | - | 1213711 |
| LP Interests | 911740 | - | - | 911740 |
| Total | $3874979 | $- | $- | $3874979 |

---

The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the nine months ended March 31, 2026:

---

| | |
|:---|:---|
| Balance at July 1, 2025 | $3874979 |
| Purchases of investments | 3313479 |
| Transfers to Level I | (1081429) |
| Proceeds from sales of investments | (1409082) |
| Net realized loss from investments | (797013) |
| Net unrealized gain from investments | 2004259 |
| Ending balance at March 31, 2026 | $5905193 |

---

The transfers of $1,081,429 from Level III to Level I category during the nine months ended March 31, 2026 resulted from one of the Company's investments converting from a non-traded company to a publicly traded company and one of the Company's investments merging with a publicly-traded company, survived by the latter. Transfers are assumed to have occurred at the beginning of the period.

For the nine months ended March 31, 2026, net change in unrealized gains included in earnings relating to Level III investments still held at March 31, 2026 was $2,004,259.

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The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the nine months ended March 31, 2025:

---

| | |
|:---|:---|
| Balance at July 1, 2024 | $6044430 |
| Purchases of investments | 225862 |
| Transfer to Investments in Real Estate | (2627724) |
| Proceeds from sales of investments | (828573) |
| Net realized gain from investments | 232645 |
| Net unrealized gain from investments | 208325 |
| Ending balance at March 31, 2025 | $3254965 |

---

For the nine months ended March 31, 2025, net change in unrealized losses included in earnings relating to Level III investments still held at March 31, 2025 was $416,178.

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at March 31, 2026:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Asset Type** | **Fair Value** | **Primary Valuation**<br> **Techniques** | **Unobservable Inputs Used** | **Range** | **Weighted**<br> **Average** |
| Non Traded Companies | $3418039 | Market Activity | Acquisition cost |  |  |
|  |  |  | Security sales |  |  |
|  |  |  | Secondary market industry publication |  |  |
|  |  | Estimated Liquidation Value | Sponsor provided value |  |  |
| GP Interests | 1578374 | Direct Capitalization Method | Capitalization rate | 6.5% | 6.5% |
|  |  |  | Discount rate | 7.5% | 7.5% |
| LP Interests | 708780 | Discounted Cash Flow | Discount rate | 7.0% | 7.0% |
| LP Interests | 200000 | Market Activity | Acquisition cost |  |  |
|  | $5905193 |  |  |  |  |

---

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Asset Type** | **Fair Value** | **Primary Valuation**<br> **Techniques** | **Unobservable Inputs Used** | **Range** | **Weighted**<br> **Average** |
| Non Traded Companies | $1749528 | Market Activity | Acquisition cost |  |  |
|  |  |  | Security sales |  |  |
|  |  |  | Secondary market industry publication |  |  |
|  |  | Estimated Liquidation Value | Sponsor provided value |  |  |
| GP Interests | 1213711 | Direct Capitalization Method | Capitalization rate | 6.3% - 6.5 | 6.4% |
|  |  |  | Discount rate | 6.8% - 7.0 | 6.9% |
| LP Interests | 711740 | Discounted Cash Flow | Discount rate | 7.0% | 7.0% |
| LP Interests | 200000 | Market Activity | Acquisition cost |  |  |
|  | $3874979 |  |  |  |  |

---

#### Summarized Financial Statements for Equity Method Investments (Fair Value Option)
Our investments in securities are generally in small and mid-sized companies in a variety of industries. In accordance with the Rule 8-03(b)(3) of Regulation S-X applicable for smaller reporting companies, we must determine which of our equity method investments measured at fair value under the Fair Value Option are considered "significant", if any. Regulation S-X mandates the use of three different tests to determine if any of our investments are considered significant investments: the investment test, the asset test, and the income test. The rule requires summarized financial statements for any significant equity method investments in an annual and interim report if any of the three tests exceed 20%.

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In addition to the SEC rules, ASC 323-10-50-3(c) requires summarized financial statements of our equity method investments, including those reported under the fair value option, if they are material individually or in aggregate.

None of our equity method investments accounted under the fair value option were determined to be individually significant under any of the tests as of March 31, 2026. Furthermore, our equity method investments accounted under the fair value option in aggregate were not material as of March 31, 2026.

#### Unconsolidated Significant Subsidiaries
In accordance with SEC Rules 3-09 and 4-08(g) of Regulation S-X, we must determine which of our investments in securities are considered "significant subsidiaries", if any. Regulation S-X mandates the use of three different tests to determine if any of our controlled investments are significant subsidiaries: the investment test, the asset test, and the income test. Rule 3-09 of Regulation S-X requires separate audited financial statements for any unconsolidated majority-owned subsidiary in an annual report if any of the three tests exceed 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information in an annual report if any of the three tests exceeds 10%.

As of March 31, 2026 and June 30, 2025, none of our investments in securities were considered unconsolidated significant subsidiaries under the SEC rules described above.

#### NOTE 5 – HELD FOR SALE

#### Assets and Liabilities Held for Sale
In October 2025, we listed Woodland Corporate Center Two for sale and met the criteria to be classified as held for sale, which requires us to present the related assets and liabilities as separate line items in our consolidated balance sheets. We recorded these assets and liabilities at the lesser of the carrying value or fair value less costs to sell. As of March 31, 2026, we did not record any impairment loss allowance on Woodland Corporate Center, which is our only asset held for sale.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our consolidation balance sheets:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **June 30, 2025** |
| **Assets** | | |
| Real estate assets |  |  |
| &nbsp;&nbsp;&nbsp; Land | $1840468 | $1840468 |
| &nbsp;&nbsp;&nbsp; Building, fixtures and improvements | 10305482 | 10290843 |
| &nbsp;&nbsp;&nbsp; Intangible lease assets | 1364229 | 1328236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: accumulated depreciation | (1066212) | (947707) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; accumulated amortization | (797578) | (752080) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate assets, net | 11646389 | 11759760 |
| Cash and cash equivalents | 132422 | 160722 |
| Investments income, rents and other receivables | 57434 | 45897 |
| Prepaid expenses and other assets | 3034 | 8978 |
| **Total assets** | $11839279 | $11975357 |
| **Liabilities** |  |  |
| Deferred rent and other liabilities | $92320 | $87302 |
| Finance lease liabilities | 320167 | 355870 |
| Accounts payable and accrued liabilities | 70819 | 48234 |
| Below-market lease liabilities, net | 162101 | 173171 |
| **Total liabilities** | $645407 | $664577 |

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#### NOTE 6 – LEASES
*Lessee Arrangements*

As discussed in Note 2, we acquired six partnerships which had solar equipment leases in place. We reassessed the leases as of the acquisition date and recorded them as finance leases in accordance with ASC 842. Our leases have remaining terms of 2.42 to 7.00 years. Right-of-use assets and lease liabilities by lease type, and the associated balance sheet classifications, are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Balance Sheet Classification** | **March 31, 2026** | **June 30, 2025** |
| Right-of-use assets: |  |  |  |
| Finance leases | Real estate assets, net | $1250979 | $1587825 |
| Lease liabilities: |  |  |  |
| Finance leases | Finance lease liabilities | $1730319 | $1898005 |

---

We have included these leases in real estate assets, net as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **June 30, 2025** |
| Building, fixtures and improvements | $2165738 | $2165738 |
| Accumulated depreciation | (914759) | (577913) |
| Real estate assets, net | $1250979 | $1587825 |

---

*Lease Expense*

The components of total lease cost were as follows for the three and nine months ended March 31, 2026:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**<br>**March 31, 2026** | **Nine Months Ended**<br>**March 31, 2026** |
|  Finance lease cost |  |  |
| &nbsp;&nbsp;&nbsp; Right-of-use asset amortization | $112282 | $355496 |
| &nbsp;&nbsp;&nbsp; Interest expense | 25833 | 79952 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total lease cost | $138115 | $435448 |

---

The components of total lease cost were as follows for the three and nine months ended March 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**<br>**March 31, 2025** | **Nine Months Ended**<br>**March 31, 2025** |
|  Finance lease cost |  |  |
| &nbsp;&nbsp;&nbsp; Right-of-use asset amortization | $126269 | $368809 |
| &nbsp;&nbsp;&nbsp; Interest expense | 28969 | 86473 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total lease cost | $155238 | $455282 |

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*Lease Obligations*

Future undiscounted lease payments for finance leases with initial terms of one year or more are as follows:

---

| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Finance Leases** |
| 2026 (remainder) | $78774 |
| 2027 | 320919 |
| 2028 | 328691 |
| 2029 | 489729 |
| 2030 | 428598 |
| Thereafter | 347471 |
| Total undiscounted lease payments | 1994182 |
| Less: Imputed interest | (263863) |
| Net lease liabilities | $1730319 |

---

*Supplemental Lease Information*

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **June 30, 2025** |
|  Finance lease weighted average remaining lease term (years) | 4.57 years | 5.32 years |
|  Finance lease weighted average discount rate | 5.0% | 5.0% |
|  Cash paid for amounts included in the measurement of lease liabilities |  |  |
| &nbsp;&nbsp;&nbsp; Financing cash flows from finance leases | $203389 | $234109 |
|  Right-of-use assets obtained in exchange for new finance lease liabilities | $- | $600000 |

---

#### NOTE 7 – VARIABLE INTEREST ENTITIES
A variable interest in a variable interest entity ("VIE") is an investment or other interest that will absorb portions of the VIE's expected losses and/or receive portions of the VIE's expected residual returns. Our variable interests in VIEs include limited partnership interests. VIEs sometimes finance the purchase of assets by issuing limited partnership interests that are either collateralized by or indexed to the assets held by the VIE.

The enterprise with a controlling financial interest in a VIE is known as the primary beneficiary and consolidates the VIE. We determine whether we are the primary beneficiary of a VIE by performing an analysis that principally considers: (a) which variable interest holder has the power to direct activities of the VIE that most significantly impact the VIE's economic performance; (b) which variable interest holder has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE; (c) the VIE's purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders; (d) the VIE's capital structure; (e) the terms between the VIE and its variable interest holders and other parties involved with the VIE; and (f) related-party relationships. We reassess our evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.

<u>Nonconsolidated VIEs</u>

As of March 31, 2026 and June 30, 2025, we had one investment in a limited liability company that is a VIE. We determined that the Company is not the primary beneficiary of this entity because the managing member of this VIE has the power to direct the activities that most significantly affect the VIE's economic performance. Accordingly, this VIE was not consolidated, and this is reported as equity method investments at fair value in the March 31, 2026 and June 30, 2025 consolidated balance sheets.

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The table below presents a summary of the nonconsolidated VIE in which we hold variable interests:

---

| | | |
|:---|:---|:---|
| **<u>Total Nonconsolidated VIEs</u>** | **As of March 31, 2026** | **As of June 30, 2025** |
| Fair value of investments in VIEs | $708780 | $711740 |
| Carrying value of variable interests - assets | $861710 | $861710 |
| Maximum Exposure to Loss: |  |  |
| Limited Partnership Interest | $861710 | $861710 |

---

Our exposure to the obligations of VIEs is generally limited to the carrying value of the limited partnership interests in these entities.

#### NOTE 8 – RELATED PARTY TRANSACTIONS

#### Advisory Agreements Effective January 1, 2021:
As discussed in Note 1, on January 26, 2021, our Board of Directors approved, effective January 1, 2021, two advisory agreements, an Advisory Management Agreement with the Real Estate Adviser and the Amended and Restated Investment Advisory Agreement with the Investment Adviser.

The terms of the Advisory Management Agreement with the Real Estate Adviser provide that we will continue to pay an Asset Management Fee on essentially the same terms as we were paying the Investment Adviser prior to 2021, namely based upon a percentage of invested capital (3% of the first $20 million, 2% of the next $80 million, and 1.50% over $100 million). Invested capital is equal to the amount calculated by multiplying the total number of outstanding shares of common stock, shares of preferred stock, and the partnership units (units in our operating partnership issued by us and held by persons other than us) issued by us by the price paid for each or the value ascribed to each in connection with their issuance. The Advisory Management Agreement also provides for a 2.50% Acquisition Fee on new (non-security) purchases, subject to certain limitations designed to eliminate incentives to "churn" our assets. The new Advisory Management Agreement also provides for an incentive management fee that is equal to 15% of all distributions once shareholders have received cumulative distributions equal to 6% from the effective date of the Agreement.

The Investment Adviser will receive an annual fee equal to $100 for providing the investment advice to us as to our securities portfolio under the Amended and Restated Investment Advisory Agreement.

#### Advisory Agreements Effective January 1, 2026:
On December 29, 2025, the Board of Directors of the Company unanimously approved, effective January 1, 2026, an amendment to the Advisory Management Agreement with the Real Estate Adviser.

The amended Advisory Management Agreement requires the Company to pay a base management fee equal to 1.25% per annum of its gross assets under management, not including depreciation and amortization. The base management fee is paid monthly based on the assets under management for the quarter ending as reported in the most recently filed quarterly report. The amended Advisory Management Agreement also calls for a bonus management fee equal to 5% of adjusted funds from operations each quarter. The bonus fee replaces any incentive fee, acquisition fee, financing fee, or disposition fee. The amended agreement contains a rolling renewal provision that reinstates a five-year term at the beginning of each calendar year unless the Company provides notice of non-renewal. If the Company terminates the agreement prior to expiration for other than cause, the Company must pay a substantial early termination fee.

During the three and nine months ended March 31, 2026, we incurred asset management fees of $807,830 and $2,584,957, respectively. During the three and nine months ended March 31, 2025, we incurred asset management fees of $863,824 and $2,570,860, respectively.

The asset management fees as of December 31, 2025 under the agreement effective January 1, 2021 were calculated based on quarter-end invested capital, segregated into the three categories presented below. The asset management fee for the three months ended March 31, 2026 was calculated based on gross assets under management, excluding depreciation and amortization, of approximately $258.51 million as of December 31, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Asset Management Fee Annual %** | **3.00%** | **2.00%** | **1.50%** | **Total Invested**<br> **Capital** |
| **<u>Quarter ended:</u>** |  |  |  |  |
| September 30, 2025 | $20000000 | $80000000 | $90460712 | $190460712 |
| December 31, 2025 | $20000000 | $80000000 | $91413218 | $191413218 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| **<u>Quarter ended:</u>** | | | | |
| September 30, 2024 | $20000000 | $80000000 | $81925868 | $181925868 |
| December 31, 2024 | $20000000 | $80000000 | $82656576 | $182656576 |
| March 31, 2025 | $20000000 | $80000000 | $84816443 | $184816443 |

---

During the three and nine months ended March 31, 2026 and 2025, we did not incur or accrue any incentive management fee under the new Advisory Management Agreement.

#### Property Management and Leasing Services:
When we acquired the Wiseman Properties on May 6, 2022, our Real Estate Adviser's newly formed wholly owned subsidiary—Wiseman Company Management, LLC, which is now known as Wiseman Commercial, Inc. ("Wiseman Commercial")—purchased the property management and leasing services rights from Wiseman. As a result, effective as of the acquisition date, Wiseman Commercial has been providing property management and leasing services to the Wiseman Partnerships under the pre-existing agreements. Since the acquisition of these service rights, there have been no changes to the terms of the management services agreements with these limited partnerships. In addition, Wiseman Commercial also provides the property management and leasing services to 220 Campus Lane under a similar term as the Wiseman Partnerships.

During the three and nine months ended March 31, 2026, these Wiseman Commercial managed limited partnerships paid total property management fees of $173,295 and $507,687, respectively, and total leasing commissions of $113,235 and $779,691, respectively, to Wiseman Commercial. In addition, during the three and nine months ended March 31, 2026, eleven of the limited partnerships also paid $810,417 and $1,237,509, respectively, to Wiseman Commercial for direct operating costs and construction of tenant improvements.

During the three and nine months ended March 31, 2025, these Wiseman Commercial managed limited partnerships paid total property management fees of $268,719 and $608,003, respectively, and total leasing commissions of $62,055 and $456,238, respectively, to Wiseman Commercial. In addition, during the three and nine months ended March 31, 2025, ten of the limited partnerships also paid $360,282 and $1,248,620, respectively, to Wiseman Commercial for direct operating costs and construction of tenant improvements.

#### Organization and Offering Costs Reimbursement:
Under our Offering Circular, which the SEC qualified on January 29, 2025, offering costs incurred and paid by us in excess of $825,000 (excluding legal fees) in connection with the preferred stock offering are reimbursable by the Advisers. If broker fees of 10% are not incurred during the issuance of the preferred stocks, the resulting savings may be applied to marketing expenses or other non-cash compensation. In such cases, the broker fee savings increase the reimbursement threshold from the Advisers. As of March 31, 2026, we had incurred total offering costs of $384,142 (excluding legal fees), of which $350,142 was paid by MacKenzie on our behalf in connection with the preferred stock offering. As of June 30, 2025, we had incurred total offering costs of $61,023 (excluding legal fees), of which $44,023 was paid by MacKenzie on our behalf in connection with the preferred stock offering. The total offering costs incurred were below the reimbursable threshold as of March 31, 2026 and June 30, 2025.

#### Administration Agreement:
Under the Administration Agreement, we reimburse MacKenzie for its allocable portion of overhead and other expenses it incurs in performing its obligations under the Administration Agreement, including furnishing us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities, as well as providing us with other administrative services, subject to the independent directors' approval. In addition, we reimburse MacKenzie for the fees and expenses associated with performing compliance functions, and its allocable portion of the compensation of our Chief Financial Officer, Chief Compliance Officer, Director of Accounting and Financial Reporting, and any administrative support staff.

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Since November 1, 2018, MacKenzie has provided transfer agent services, with the out-of-pocket costs incurred by MacKenzie being reimbursed by us. No fee (only cost reimbursement) is paid to MacKenzie for this service. Effective March 5, 2024, to comply with Nasdaq listing requirements, we hired Securities Transfer Corporation, a third-party transfer agent, to provide these services for our common and Series B preferred stock. However, effective September 30, 2024, Computershare Inc., another third-party transfer agent, took over as transfer agent for our common stock.

The administrative cost reimbursements for the three and nine months ended March 31, 2026 were $220,250 and $660,750, respectively. The administrative cost reimbursements for the three and nine months ended March 31, 2025 were $167,463 and $502,391, respectively. During the three and nine months ended March 31, 2026, we did not incur any transfer agent services cost reimbursements. The transfer agent services cost reimbursement for the three and nine months ended March 31, 2025 were $1,537 and $4,609, respectively.

The table below outlines the related party expenses incurred for the nine months ended March 31, 2026 and 2025, and unpaid as of March 31, 2026, and June 30, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** | **Unpaid as of** | **Unpaid as of** |
| <br>**Types and Recipient** | **2026** | **2025** | **March 31, 2026** | **June 30, 2025** |
| Asset management fees - the Real Estate Adviser | $2584957 | $2570860 | $- | $- |
| Administrative cost reimbursements - MacKenzie | 660750 | 502391 | - | - |
| Asset acquisition fees - the Real Estate Adviser <sup>(1)</sup> | - | 292000 | - | - |
| Transfer agent cost reimbursements - MacKenzie | - | 4609 | - | - |
| Organization & Offering Cost <sup>(2)</sup> - MacKenzie | 306120 | 39051 | 355799 | 49680 |
| Other expenses <sup>(3)</sup> - MacKenzie and Subsidiary's GPs | - | - | 94819 | 118084 |
| Due to related entities |  |  | $450618 | $167764 |

---

<sup>(1)</sup> Asset acquisition fees paid to the Real Estate Adviser were capitalized as a part of the real estate basis in accordance with our policy. The acquisition fee paid during the nine months ended March 31, 2025 was for the acquisition of Green Valley Medical Center in August 2024.

<sup>(2)</sup> Offering costs paid by MacKenzie - discussed in this Note under organization and offering costs reimbursements.

<sup>(3)</sup> Expenses paid by MacKenzie and General Partner of a subsidiary on behalf of us and subsidiary.

#### NOTE 9 – MARGIN LOANS
We have a brokerage account through which we buy and sell publicly traded securities. The provisions of the account allow us to borrow on certain securities held in the account and to purchase additional securities based on the account equity (including cash). Amounts borrowed are collateralized by the securities held in the account and bear interest at a negotiated rate payable monthly. Securities pledged to secure margin balances cannot be specifically identified as a portion of all securities held in a brokerage account are used as collateral. As of March 31, 2026 and June 30, 2025, we had no margin credit available for cash withdrawal or the ability to purchase in additional securities. Accordingly, as of March 31, 2026 and June 30, 2025, there was no amount outstanding under this short-term credit line.

#### NOTE 10 – MORTGAGE NOTES PAYABLE, NOTES PAYABLE AND DEBT GUARANTY

#### Madison and PVT Notes Payable
On February 26, 2021, Madison and PVT obtained mortgage loans from First Republic Bank in the amounts of $6,737,500 and $8,387,500, respectively, both at a fixed interest rate of 3% per annum through April 1, 2026. Effective May 1, 2026, interest rates will be the average of the twelve most recently published yields on U.S. Treasury securities adjusted a constant maturity of one year as published by the Federal Reserve System in the Statistical Release H.15 plus 2.75% per annum. The loans were obtained to finance the acquisition of Commodore Apartments and The Park View Apartments, which are located in Oakland, California. The loans mature on April 1, 2031 and are cross-collateralized by both properties owned by Madison and PVT. The loan requires interest-only monthly payments through April 1, 2026, and beginning May 1, 2026, monthly payments of principal and interest are due based on 360 months of amortization period. The remaining unpaid principal balance is due at maturity date. Accordingly, as of both March 31, 2026 and June 30, 2025, the outstanding balances of the loans were $6,737,500 for the Madison mortgage loan and $8,387,500 for the PVT mortgage loan. The mortgage notes payable balances are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

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The following table provides the projected principal payments on Madison's loan for the next five years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $48554 |
| 2027 | 290789 |
| 2028 | 286755 |
| 2029 | 284980 |
| 2030 | 282114 |
| Thereafter | 5544308 |
| **Total** | $6737500 |

---

The following table provides the projected principal payments on PVT's loan for the next five years:

---

| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $6188 |
| 2027 | 87705 |
| 2028 | 92101 |
| 2029 | 99784 |
| 2030 | 106487 |
| Thereafter | 7995235 |
| **Total** | $8387500 |

---

#### PT Hillview Notes Payable
On October 4, 2021, PT Hillview entered into a loan agreement with Ladder Capital Finance in the amount of $17,500,000. The annual interest rate was equal to the greater of (i) a floating rate of interest equal to 5.50% plus LIBOR, and (ii) 5.75%. The loan was obtained to finance the acquisition of Hollywood Apartments. The loan was secured by Hollywood Apartments and has an initial maturity date of October 6, 2023, which could be extended for two successive 12-month terms. On August 14, 2023, PT Hillview exercised the first extension option to extend the term of the loan to October 6, 2024. The loan required interest-only monthly payments with the principal balance due at maturity date. Interest was due based on a 360-day amortization period. PT Hillview also entered into an interest rate cap agreement on October 4, 2021, as required by the lender. The interest rate cap agreement was revised on September 29, 2023 and it matured on February 2, 2025. We did not record the fair value and the changes in the fair value of the contract in our consolidated financial statements because the amounts were insignificant to our consolidated financial statements.

On October 3, 2024, the loan agreement was amended to include extension options with principal paydowns. PT Hillview exercised the extension options pursuant to the amended agreement and the maturity date was extended until April 6, 2025 with total principal paydown of $3,975,000.

On March 28, 2025, PT Hillview entered into a loan agreement with Wells Fargo Bank, National Association, in the amount of $11,660,000 at a fixed annual interest rate of 5.87%. The loan was obtained to refinance the prior loan with Ladder Capital Finance which matured on April 6, 2025. The new loan matures in April 2030, is secured by Hollywood Apartments, and requires interest-only monthly payments with the principal balance due at maturity. The outstanding balance of the loan as of March 31, 2026 and June 30, 2025 was $11,660,000, which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

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In connection with the refinancing, the Operating Partnership contributed $5,683,503 to PT Hillview to fund the principal paydown, replenish reserves, and pay loan fees. Of this amount, $568,350 (10%) represented the share of the non-controlling interest holder, True USA. Accordingly, as of March 31, 2026 and June 30, 2025, this amount has been recorded as a note receivable from True USA and is included in investments, income, rents, and other receivables in the consolidated balance sheet.

We (along with three other principals of True USA) guaranteed the "Recourse Obligations" as defined in the loan agreement, which are triggered only if the borrower of the loan engages in "Bad Boy Acts" (such as fraud, intentional misrepresentation, willful misconduct, waste, conversion, intentional failure to pay taxes or maintain insurance, filing for bankruptcy, ADA noncompliance, and environmental contamination, etc.). As of March 31, 2026, we have not recorded any guaranty obligations.

#### MacKenzie Shoreline Mortgage Notes Payable
On May 6, 2021, MacKenzie Shoreline entered into a loan agreement with Pacific Premier Bank, in the amount of $17,650,000. The annual interest rate under the agreement is 3.65% for the first 60 months, and a variable interest rate based on a 6-month CME Term Secured Overnight Financing Rate ("SOFR") plus a margin of 3.00 percentage points, for months thereafter until maturity. The loan was obtained to finance the acquisition of Shoreline Apartments. The loan matures on June 1, 2032, and is secured by Shoreline Apartments. The loan requires interest-only monthly payments through June 30, 2027, and beginning July 1, 2027, monthly payments of principal and interests are due based on 360 months of amortization period. Accordingly, the outstanding balance of the loan as of March 31, 2026 and June 30, 2025, was $17,650,000, which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next five years:

---

| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $- |
| 2027 | - |
| 2028 | 174294 |
| 2029 | 189564 |
| 2030 | 202605 |
| Thereafter | 17083537 |
| **Total** | $17650000 |

---

#### First & Main Mortgage Notes Payable
The Company assumed a $12,000,000 loan agreement with Exchange Bank at the acquisition of First & Main, carrying a fixed annual interest rate of 3.75%. The loan is secured by the First & Main Office Building and requires monthly principal and interest payments based on a 25-year amortization schedule. The loan had an initial maturity date of February 1, 2026; however, the lender extended the payoff deadline through April 6, 2026 to allow additional time for the refinancing to close.

On April 6, 2026, the Company entered into a loan agreement with Meriwest Credit Union, in the amount of $12,240,000 at a fixed annual interest rate of 6.25%. The loan was obtained to refinance the prior loan with Exchange Bank. The new loan matures on April 1, 2031, and is secured by First & Main Office Building. The loan requires monthly payments of principal and interest of $75,340 over a period of 59 months, with the initial payment due on May 1, 2026. The final payment amounting to $11,429,491 will be due upon maturity. The loan is guaranteed by the Parent Company and the Operating Partnership.

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The outstanding balances of the loan as of March 31, 2026 and June 30, 2025, were $10,372,969 and $10,626,226, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payment on the loan for the remainder of the year:

---

| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $10372969 |
| **Total** | $10372969 |

---

#### First & Main Other Note Payables:

#### Junior Debt
As of the acquisition date, First & Main had $1,000,000 in interest-only junior promissory notes outstanding, which the Company assumed. The notes were issued in 2018 and 2019 with an original maturity date of December 31, 2023, and included no prepayment penalty for early retirement. Of the total promissory notes, notes with a total principal balance of $350,000 and $100,000 were paid off as of December 31, 2023 and April 8, 2026, respectively. The maturity dates of the remaining promissory notes were extended to: December 31, 2026, for notes with a principal balance of $100,000, and December 31, 2028, for the remaining notes with a total principal balance of $450,000. Interest on the notes is payable on the first day of each month at 7% per annum. The promissory notes are disclosed as part of line of credit and notes payable, net in the consolidated balance sheets.

In March 2024, the partnership obtained an additional loan with the principal amount of $200,000 in an interest-only junior promissory note. The note was issued on March 8, 2024 with a maturity date of March 31, 2025. Interest on the note is payable on the first day of each month at 8.50% per annum. The $200,000 note was repaid in full as of March 31, 2025.

#### Small Business Administration ("SBA") Loan
As of the acquisition date, First & Main had an outstanding $151,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on December 20, 2022. Monthly payments will be $731. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $153,510 and $150,000, respectively, which are disclosed as part of the line of credit and notes payable, net in the consolidated balance sheets.

#### Solar System Loan (First & Main)
As of the acquisition date, First & Main had an outstanding $220,000 loan from The Wiseman Family Trust, which the Company assumed. The loan was used to finance the installation of a solar power system at the First & Main Office Building. The loan will be paid back over a period of 10 years at an annual interest rate of 5%. Monthly payments of principal and interest will be $1,486. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $127,697 and $143,384, respectively, which are disclosed as part of line of credit and notes payable, net in the consolidated balance sheets.

#### 1300 Main Mortgage Notes Payable
On November 4, 2024, 1300 Main entered into a loan agreement with Valley Strong Credit Union, in the amount of $8,000,000 at a fixed annual interest rate of 6.85%. The loan was obtained to refinance the prior loan from Suncrest Bank, which was originally obtained by 1300 Main under its previous ownership. The new loan matures on November 15, 2029, and is secured by a real property and the assignment of all its rental revenue. The loan requires monthly payments of principal and interest of $52,534 through maturity. The remaining unpaid principal balance is due at maturity. The note is guaranteed by the Parent Company. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $7,895,868 and $7,972,744, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

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The following table provides the projected principal payments on the loan for the next five years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $21809 |
| 2027 | 93914 |
| 2028 | 99080 |
| 2029 | 107557 |
| 2030 | 7573508 |
| **Total** | $7895868 |

---

#### 1300 Main Other Notes Payable:

#### SBA Loan
As of the acquisition date, 1300 Main had an outstanding $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on July 11, 2023. Monthly payments will be $731. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $154,834 and $157,191, respectively, which are disclosed as part of the line of credit and notes payable, net in the consolidated balance sheets.

#### Woodland Corporate Center Two Mortgage Notes Payable
As of the acquisition date, Woodland Corporate Center Two had a loan agreement with Western Alliance Bank, in the amount of $7,500,000 at a fixed annual interest rate of 4.15%, which the Company assumed. The loan matured on October 7, 2024 and was secured by Woodland Corporate Center. The loan was guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating Partnership on July 1, 2022.

On October 4, 2024, Woodland Corporate Center Two entered into a loan agreement with Summit Bank, in the amount of $6,000,000 at a fixed annual interest rate of 6.50%. The loan was obtained to refinance the prior loan from Western Alliance Bank which matured on October 7, 2024. The loan matures on October 5, 2027, and is secured by the real property and the assignment of all its rental revenue. The loan requires monthly payments of principal and interest of $40,873 through October 5, 2027. The remaining unpaid principal balance is due at maturity. The loan is guaranteed by the Parent Company (and Wiseman is no longer a guarantor). The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $5,855,763 and $5,932,794, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

In October 2025, we listed the underlying property for sale as discussed in Note 5.

The following table provides the projected principal payments on the loan for the next three years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $21894 |
| 2027 | 109244 |
| 2028 | 5724625 |
| **Total** | $5855763 |

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#### Main Street West Mortgage Notes Payable
On June 6, 2025, the Company refinanced its mortgage on the Main Street West Office Building with EverTrust Bank. The loan is secured by the Main Street West Office Building and has a principal amount of $9,500,000. It bears interest at the Wall Street Journal Prime Rate, currently 6.75% per annum, with a floor of 6.50%. Monthly payments of principal and interest are required based on a 300-month amortization schedule, with the remaining unpaid principal balance due at maturity. The loan matures on May 30, 2028 and is guaranteed by the Parent Company.

The Company also formed a wholly owned subsidiary, Innovate Napa, to enter into a master lease covering approximately 36.2% (13,806 square feet) of the rentable square feet of the Main Street West Office Building. Innovate Napa does not occupy the space; rather, the arrangement was established in connection with the refinancing of the Main Street West loan to satisfy the lender's occupancy requirements. Lease payments from Innovate Napa to Main Street West are intercompany in nature and eliminated in consolidation. This related-party arrangement is temporary and is expected to remain in place until the space is leased to third-party tenants. In October 2025, the Company executed leases with third-party tenants for this space, and the leases commenced in December 2025 and January 2026. For the nine months ended March 31, 2026, rental revenue of $310,635 from Innovate Napa was eliminated in consolidation.

The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $9,386,670 and $9,500,000, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets. Total accrued interest on the loan as of March 31, 2026, and June 30, 2025, was $54,576 and $51,239, respectively.

The following table provides the projected principal payments on the loan for the next three years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $33921 |
| 2027 | 150008 |
| 2028 | 9202741 |
| **Total** | $9386670 |

---

#### Main Street West Other Notes Payable:

#### SBA Loan
As of the acquisition date, Main Street West had an outstanding $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on September 4, 2023. Monthly payments will be $731. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $155,644 and $161,300, respectively, which are disclosed as a part of the line of credit and notes payable, net in the consolidated balance sheets.

#### 220 Campus Lane Mortgage Notes Payable
On September 8, 2023, 220 Campus Lane borrowed $2,145,000 from Northern California Laborers Pension Fund at a fixed annual interest rate of 5%. The loan was obtained to finance the acquisition of 220 Campus Lane Office Building and the underlying parcel of land. The loan matures on September 30, 2028, and is secured by the vacant office building and the underlying parcel of land. The loan requires interest-only monthly payments of $8,938 through September 30, 2028. The remaining unpaid principal balance is due at maturity date. Accordingly, the outstanding balance of the loan as of March 31, 2026 and June 30, 2025 was $2,145,000, which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, this debt was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $223,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of March 31, 2026 and June 30, 2025, amounted to $109,146 and $142,596, respectively, and was netted against the total debt balance in the consolidated balance sheets.

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#### Campus Lane Residential Mortgage Notes Payable
On September 8, 2023, Campus Lane Residential borrowed $1,155,000 from Northern California Laborers Pension Fund at a fixed annual interest rate of 5%. The loan was obtained to finance the acquisition of a vacant parcel of land. The loan matures on September 30, 2028, and is secured by the vacant parcel of land. The loan requires interest-only monthly payments of $4,813 through September 30, 2028. The remaining unpaid principal balance is due at maturity date. The outstanding balance of the loan as of March 31, 2026 and June 30, 2025 was $1,155,000, which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt acquired from the acquisition of the Campus Lane Land was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $120,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of March 31, 2026 and June 30, 2025, amounted to $58,733 and $76,733, respectively, and was netted against the total debt balance in the consolidated balance sheets.

#### GVEC Mortgage Notes Payable
As of the acquisition date, GVEC had a $14,000,000 fixed-rate loan agreement with Columbia State Bank, which the Company assumed on January 1, 2024 from the predecessor owner. The initial interest rate is 4.25% until October 1, 2027, increasing to 5.46% thereafter. The loan matures on September 1, 2032 and is secured by the Green Valley Executive Center. The loan requires monthly payments of principal and interest based on a 30-year amortization period with the remaining principal balance due at maturity. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $13,148,147 and $13,346,323, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt assumed from the acquisition of Green Valley Executive Center was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $993,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of March 31, 2026 and June 30, 2025, amounted to $769,575 and $844,050, respectively, and was netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next five years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $54440 |
| 2027 | 275253 |
| 2028 | 250402 |
| 2029 | 253672 |
| 2030 | 268076 |
| Thereafter | 12046304 |
| **Total** | $13148147 |

---

#### One Harbor Center, LP Mortgage Notes Payable
As of the acquisition date, One Harbor Center, LP had an $8,378,825 loan from Travis Credit Union, which the Company assumed. The loan bears interest at a fixed rate of 4.96% per annum, matures on June 1, 2028, and is secured by the property and the assignment of all rental revenue. Monthly principal and interest payments of $46,092 are required through maturity, with the remaining unpaid principal balance due at the maturity date. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $7,587,282 and $7,704,950, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

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Consistent with asset acquisition accounting, the debt assumed from the acquisition of One Harbor Center was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $334,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of March 31, 2026 and June 30, 2025, amounted to $181,579 and $241,222, respectively, and was netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next three years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $36046 |
| 2027 | 161643 |
| 2028 | 7389593 |
| **Total** | $7587282 |

---

#### One Harbor Center, LP Other Notes Payable:

#### SBA Loan
As of the acquisition date, One Harbor Center, LP had a $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on February 10, 2023. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $153,635 and $150,000, respectively, which are disclosed as a part of the line of credit and notes payable, net in the consolidated balance sheets.

#### MRC Aurora Construction Loan
On February 21, 2024, the Company closed on a $17.15 million construction loan with Valley Strong Credit Union, headquartered in Bakersfield, California, to fund the development of the Aurora at Green Valley. The loan bears interest at a variable rate equal to the Prime Rate plus 0.25% and had an initial maturity date of March 1, 2026. The Company has the option to extend the construction loan for an additional six-month period or to convert it to a conventional permanent loan. In January 2026, the loan maturity has been extended to July 31, 2026. The monthly accrued interest is added on the outstanding loan balance. The outstanding balances of the loan as of March 31, 2026, and June 30, 2025, were $16,928,232 and $6,597,850, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payment on the loan for the next two years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $- |
| 2027 | 16928232 |
| **Total** | $16928232 |

---

#### MacKenzie Satellite Mortgage Notes Payable
On August 21, 2024, MacKenzie Satellite entered into a loan agreement with Summit Bank, in the amount of $6,000,000 at a fixed annual interest rate of 6.50%. The loan matures on August 21, 2027, and is secured by MacKenzie Satellite's real property and the assignment of all its rental revenue. The Parent Company has guaranteed the loan. The loan requires monthly payments of principal and interest of $40,867 through August 21, 2027. The remaining unpaid principal balance is due at maturity date. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $5,831,470 and $5,909,606, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

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The following table provides the projected principal payments on the loan for the next three years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $25901 |
| 2027 | 111088 |
| 2028 | 5694481 |
| **Total** | $5831470 |

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#### Green Valley Medical Center, LP Mortgage Notes Payable
On July 15, 2024, Green Valley Medical Center, LP entered into a loan agreement with Valley Strong Credit Union, in the amount of $7,800,000 at a fixed annual interest rate of 7.12%. The loan matures on August 1, 2029, and is secured by the real property and the assignment of all its rental revenue. The Parent Company provided a guaranty of the note. The loan requires monthly payments of principal and interest of $52,628 through December 1, 2028. The remaining unpaid principal balance is due at maturity date. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $7,682,640 and $7,747,998, respectively, which are disclosed as part of the mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next five years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $17827 |
| 2027 | 88623 |
| 2028 | 93650 |
| 2029 | 102032 |
| 2030 | 7380508 |
| **Total** | $7682640 |

---

#### Green Valley Medical Center, LP Other Notes Payable:

#### SBA Loan
As of the acquisition date, Green Valley Medical Center, LP had a $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan bears interest at 3.75% per annum and is repayable over a 30-year term. While the Company has been making interest payments, the Federal Government has not yet commenced amortization of the principal. The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $154,312 and $150,000, respectively, which are disclosed as a part of the line of credit and notes payable, net in the consolidated balance sheets.

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#### Line of Credit Agreement
On January 22, 2025, we entered into a revolving line of credit agreement with Patterson Real Estate Services LP ("PRES"), an affiliate of the Adviser, of up to $10,000,000. Interest will accrue on any unpaid principal balance on the note at a fixed annual interest rate of 10%. In addition, an origination fee of 2% will be charged on each advance and the sum will be added to the principal balance. The loan matures on June 1, 2026. The loan requires monthly interest payments beginning on March 1, 2025, with the remaining principal balance due at maturity. The outstanding balances of the loan as of March 31, 2026, and June 30, 2025, were $10,000,000 and $9,588,000, respectively, which include $196,078 and $188,000 of loan origination fees, respectively, and are disclosed as part of line of credit and notes payable, net in the consolidated balance sheets. The loan origination fee is capitalized and amortized over the life of the loan. The remaining unamortized balance as of March 31, 2026, and June 30, 2025, amounted to $27,068 and $138,611, respectively, and were netted against the total debt balance in the consolidated balance sheets.

On September 24, 2025, the line of credit agreement with PRES was amended to extend the maturity date to December 31, 2027.

For the three and nine months ended March 31, 2026, we incurred interest expense of $250,000 and $760,310 on the line of credit, respectively. Interest payable of $1,045,003 and $284,693 remained outstanding as of March 31, 2026 and June 30, 2025, respectively, and were disclosed as part of accounts payable and accrued liabilities in the consolidated balance sheet.

The following table provides the projected principal payments on the loan for the next two years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $- |
| 2027 | 10000000 |
| **Total** | $10000000 |

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#### Secured Promissory Note Agreement
On June 11, 2025, the Company entered into a note purchase agreement with Streeterville Capital, LLC (the "Investor") providing for the issuance of up to $3,270,000 in secured promissory notes to fund the REIT share purchases in MRC QRS. On that date, the Investor funded $1,000,000 in cash, and the Company issued the first secured promissory note in the principal amount of $1,115,000 ("Note #1"), which included an original issue discount of $90,000 and transaction expenses of $25,000. The note matures 18 months after the funding date, or on December 11, 2026. On August 1, 2025, the Investor funded $500,000 ("Note #2") in cash, and the Company issued the second secured promissory note in the principal amount of $545,000, which included an original issue discount of $45,000. The note matures 18 months after the funding date, or on February 28, 2027.

On January 15, 2026, the Company issued the third secured promissory note ("Note #3") to the Investor under the note purchase agreement in the aggregate principal amount of $1,635,000, which included an original issue discount of $135,000. Note #3 matures on July 15, 2027.

On March 6, 2026, the Company entered into another note purchase agreement with the Investor providing for the issuance of up to $1,095,000 in secured promissory notes to fund the REIT share purchases in MRC QRS. On that date, the Investor funded $1,000,000 in cash, and the Company issued the fourth secured promissory note in the principal amount of $1,095,000 ("Note #4"), which included an original issue discount of $90,000 and transaction expenses of $5,000. The note matures 18 months after the funding date, or on September 6, 2027.

For the first five months following issuance of each secured promissory note, the Company is required to make monthly payments equal to the accrued interest. Beginning in the sixth month and continuing until maturity, the Company must make monthly payments of $93,000, $45,500, $136,250 and $91,250 on Note #1, Note #2, Note #3 and Note #4, respectively, plus accrued interest.

In the event the notes above are outstanding on the 90-day anniversary of the purchase price date, the Company will be charged a one-time fee to cover the Investor's accounting, legal and other costs incurred in monitoring the notes equal to the outstanding balance divided by 0.93 less the outstanding balance. The monitoring fee will be automatically added to the outstanding balance on that date. During the nine months ended March 31, 2026 the Company paid $84,514, $41,310, $123,991 and $82,977 in monitoring fees related to Note #1, Note #2, Note #3 and Note #4, respectively.

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The notes are guaranteed by MRC QRS through a security agreement entered into by MRC QRS in favor of the Investor. MRC QRS granted the Investor a first-position security interest in the assets of MRC QRS.

The Company also entered into a stock pledge agreement with the Investor, where the Company pledged to the Investor as collateral and security for the secured obligations, and granted the Investor a first-position security interest in the common stock of MRC QRS. The Investor shall have the right to exercise the rights and remedies set forth in the stock pledge agreement and in the transaction documents if an event of default has occurred.

The secured note is subject to certain trigger events, which provide the Investor with the option to increase the outstanding balance by 5% to 15% depending on the severity of the trigger event. Failure of the Company to cure the trigger event may result in an event of default, which would cause the outstanding balance to become immediately due and demandable.

Note #1 and Note #2 were repaid in full as of March 31, 2026.

The outstanding balances of the loan as of March 31, 2026 and June 30, 2025 were $2,730,000 and $1,115,000, respectively, which are disclosed as part of the line of credit and notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next three years:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $- |
| 2027 | 2547500 |
| 2028 | 182500 |
| **Total** | $2730000 |

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The table below presents the total loan outstanding at the underlying companies as of March 31, 2026, and the fiscal years those loans mature:

---

| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $10745004 |
| 2027 | 30966138 |
| 2028 | 29213495 |
| 2029 | 4812054 |
| 2030 | 27499016 |
| Thereafter | 43467966 |
| **Total** | $146703673 |

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#### Debt Guaranty
The Wiseman Partnerships had mortgage loans and solar leases with various banks, all of which were guaranteed by The Wiseman Company, LLC ("Wiseman") and its owner, Doyle Wiseman and his trust, as of May 6, 2022, the date the Operating Partnership acquired the management companies. The mortgage loans of 1300 Main, One Harbor Center, LP, Martin Plaza Associates, LP, and Main Street West are also guaranteed by the Wiseman Partnerships' general partner as the co-guarantor.

On July 1, 2022, the Operating Partnership agreed to indemnify Doyle Wiseman for any losses he may suffer from a Wiseman Partnership default on its mortgage or solar lease obligations. Each of the Wiseman Partnerships remains adequately capitalized and has sufficient cash flow to service its mortgage notes; accordingly, no liability has been recorded under these guaranties as of March 31, 2026.

The Main Street West mortgage was refinanced on June 6, 2025, with EverTrust Bank. The loan is secured by the Main Street West Office Building and is guaranteed by the Parent Company. As of March 31, 2026, the outstanding principal balance was $9,386,670, and accrued interest was $54,576. No liability under the guaranty is recorded, as the property's appraised value exceeds the loan balance.

As of March 31, 2026, refinancings have resulted in removal of Wiseman as guarantor at Westside Professional Center, Green Valley Medical Center, Woodland Corporate Center Two, 1300 Main, Main Street West and First & Main. The Parent Company now guarantees the mortgage note at each of these properties, with the exception of Westside Professional Center which is guaranteed by its sole limited partner.

The mortgage loan of GVEC is guaranteed by PRES (an affiliate of the Adviser) and by its owner, Berniece A. Patterson, and her trust. As part of the GVEC contribution agreement, the Operating Partnership indemnified Berniece Patterson and her trust for any losses suffered by her through the default by GVEC on the mortgage loan. The mortgage loans for MacKenzie Satellite, obtained in August 2024, and the construction loan for MRC Aurora are also guaranteed by the Parent Company. The note purchase agreement and secured note entered into in June 2025 and March 2026 are guaranteed by MRC QRS.

Management has evaluated all such guaranties and indemnities and determined that no liability is required to be recorded as of March 31, 2026.

NOTE 11 – EARNINGS PER SHARE

Basic earnings per share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to potentially diluted securities. The following table sets forth the computation of basic and diluted earnings per share for three months ended March 31, 2026 and 2025:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** |
|  | **2026** | **2025** |
| Net loss attributable to common stockholders | $(11637478) | $(20333578) |
| Basic and diluted weighted average common shares outstanding | 1889821.35 | 1384614.90 |
| Basic and diluted earnings per share | $(6.16) | $(14.69) |

---

The Company incurred a net loss for the three and nine months ended March 31, 2026. As a result, the dilutive securities, the common stock series A and B warrants, were considered anti-dilutive and excluded from the calculation of diluted net loss per share. As of March 31, 2026, 423,944.85 shares underlying these instruments were excluded.

In accordance with ASC Topic 260, *Earnings Per Share*, shares issuable for little to no consideration should be included in the number of outstanding shares used for basic earnings per share. The FASB proposed that warrants or options exercisable for little to no cost be included in the denominator of basic earnings per share (and therefore diluted earnings per share) once there were no further vesting conditions or contingencies associated with them. As of March 31, 2026, there were no outstanding pre-funded warrants. As of March 31, 2025, no warrants have been issued.

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#### NOTE 12 – SHARE OFFERINGS AND FEES
During the nine months ended March 31, 2026, we issued 365,351 and 36,969 shares of common stock to the Series A and Series B preferred stock holders, respectively, who exercised their option to convert their shares of Series A and Series B preferred stock to shares of our common stock at prices per share ranging from $3.51 to $5.47 and $3.27 to $3.92, respectively.

During the nine months ended March 31, 2026, we issued 37,374.89 shares of Series A preferred stock with total gross proceeds of $840,935, 13,440.15 shares of Series B preferred stock with total gross proceeds of $329,411, and 52,640 shares of Series C preferred stock with total gross proceeds of $1,316,000 under the Offering Circular; and we incurred syndication costs of $629,005 in relation to common and preferred stock offerings. For the nine months ended March 31, 2026, we issued 6,409.45 shares of Series A preferred stock with total gross proceeds of $144,214 under the preferred stock DRIP, 878.30 shares of Series B preferred stock with total gross proceeds of $19,761 under the preferred stock DRIP, and 16.67 shares of Series C preferred stock with total gross proceeds of $375 under the preferred stock DRIP.

During the nine months ended March 31, 2026, 62,207.12 shares of Series A preferred stock with an aggregate stated value of $2,144,562 were converted into 365,351 shares of our common stock. Additionally, 6,067.10 shares of Series B preferred stock with an aggregate stated value of $233,717, together with $8,804 of accrued liquidation preference representing 9% non-cash dividends, were converted into 36,969 shares of our common stock.

During the nine months ended March 31, 2025, no shares of common stock were issued under the common stock DRIP. Additionally, in March 2025, we issued 32.18 shares of common stock at $102.50 per share to the Class A unit holders of the Operating Partnership who exercised their option to convert their Class A units to our common share, and 11,327.60 shares of common stock to the Series A preferred stock holders who exercised their option to convert their shares of Series A preferred stock to shares of our common stock at prices per share ranging from $17.10 to $40.20.

During the nine months ended March 31, 2025, we issued 9,044.00 shares of Series A preferred stock with total gross proceeds of $226,103 and 58,513.56 shares of Series B preferred stock with total gross proceeds of $1,462,839 under the Offering Circular; and incurred syndication costs of $1,205,828 in relation to preferred stock offering. For the nine months ended March 31, 2025, we issued 6,226.14 shares of Series A preferred stock with total gross proceeds of $140,091 under the preferred stock DRIP and 414.81 shares of Series B preferred stock with total gross proceeds of $9,333 under the preferred stock DRIP.

During the nine months ended March 31, 2025, 10,805.38 shares of Series A preferred stock with an aggregate stated value of $268,162 were converted into 11,327.60 shares of our common stock.

#### NOTE 13 – SHARE REPURCHASE PLAN
On March 4, 2024, the Board of Directors suspended the common stock share repurchase program and common stock DRIP in connection with its pursuit of the listing of its common stock on a securities exchange. When our common stock became eligible for trading on OTC Markets in April 2024, the share repurchase program automatically terminated, and the Board of Directors will decide whether, and when, to reinstate the common stock DRIP.

During the nine months ended March 31, 2026, we did not repurchase any shares. During the nine months ended March 31, 2025, we repurchased shares of our common stock through our Share Repurchase Program and through third-party auctions as noted in the below table.

---

| | | | |
|:---|:---|:---|:---|
| **Period** | **Total Number**<br> **of Shares Repurchased** | **Average Repurchase**<br> **Price**<br> **Per Share** | **Total Repurchase**<br> **Consideration** |
| **During the nine months ended March 31, 2025** | | | |
| **Series A Preferred stock** | | | |
| &nbsp;&nbsp;&nbsp; September 1, 2024 through December 31, 2024 |  | $- | $5530<br> \* |

---

\* Fees paid for redemption lockup agreements

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#### NOTE 14 – STOCKHOLDER DIVIDENDS AND DRIP
The following table reflects the dividends per share that we have declared on our preferred stock during the nine months ended March 31, 2026:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Dividends** | **Dividends** | **Dividends** | **Dividends** | **Dividends** | **Dividends** |
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** |
| **<u>During the Quarter Ended</u>** | **Per Share** | **Amount** | **Per Share** | **Amount** | **Per Share** | **Amount** |
| September 30, 2025 | $0.375 | $285758 | $0.750 | $88878 | $0.563 | $6465 |
| December 31, 2025 | 0.375 | 280892 | 0.938 | 90198 | 0.563 | 18915 |
| March 31, 2026 | 0.375 | 276780 | 0.750 | 92230 | 0.563 | 27189 |
|  | $1.125 | $843430 | $2.438 | $271306<br> \* | $1.688 | $52569 |

---

\*Of the total dividends declared for Series B during the nine months ended March 31, 2026, $203,479 was an increase in liquidation preference and $67,827 was the cash dividend.

During the nine months ended March 31, 2026, we did not issue any common shares under our common stock DRIP since the plan was suspended in March 2024. During the nine months ended March 31, 2026, $144,214 of Series A preferred dividends, $19,761 of Series B preferred dividends and $375 of Series C preferred dividends were reinvested under the preferred stock DRIP.

On May 19, 2025, following a review of the Company's financials, the current economic climate, the potential impact of new tariffs on demand for office and retail space, and the increased likelihood of a near-term recession, the Board of Directors approved the suspension of the regular quarterly dividend on the Company's common stock effective immediately. This decision was made to preserve liquidity, enable the Company to make further investments in its own properties and developments where prudent, and to provide financial flexibility as to near-term commitments; the suspension will remain in effect until further notice.

On February 9, 2026, we declared the Series A preferred stock quarterly dividend of $0.375 per share payable at the rate of $0.125 per month for holders of record as of April 30, 2026, May 31, 2026, and June 30, 2026. This Series A preferred stock dividend will be paid in July 2026. On May 12, 2026, we declared the Series A preferred stock quarterly dividend of $0.375 per share payable at the rate of $0.125 per month for holders of record as of July 31, 2026, August 31, 2026, and September 30, 2026. This Series A preferred stock dividend will be paid in October 2026.

On February 9, 2026, we declared the Series B preferred stock quarterly 3% dividend of $0.1875 per share payable at the rate of $0.0625 per month for holders of record as of April 30, 2026, May 31, 2026, and June 30, 2026. This Series B preferred stock dividend will be paid in July 2026. On May 12, 2026, we declared the Series B preferred stock quarterly 3% dividend of $0.1875 per share payable at the rate of $0.0625 per month for holders of record as of July 31, 2026, August 31, 2026, and September 30, 2026. This Series B preferred stock dividend will be paid in October 2026. In addition, the Series B preferred stock will accrue dividends at the rate of 9% per annum on the stated value as an increase in liquidation preference.

On February 9, 2026, we declared the Series C preferred stock quarterly dividend of $0.5625 per share payable at the rate of $0.1875 per month for holders of record as of April 30, 2026, May 31, 2026, and June 30, 2026. This Series C preferred stock dividend will be paid in July 2026. On May 12, 2026, we declared the Series C preferred stock quarterly dividend of $0.5625 per share payable at the rate of $0.1875 per month for holders of record as of July 31, 2026, August 31, 2026, and September 30, 2026. This Series C preferred stock dividend will be paid in July 2026.

The following table reflects the distributions declared by the Operating Partnership for the preferred unit holders during the nine months ended March 31, 2026:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Distributions** | **Distributions** | **Distributions** | **Distributions** |
|  | **Series A Preferred Units** | **Series A Preferred Units** | **Series B Preferred Units** | **Series B Preferred Units** |
| **<u>During the Quarter Ended</u>** | **Per Share** | **Amount** | **Per Share** | **Amount** |
| September 30, 2025  | $0.375 | $399247 | $0.750 | $32410 |
| December 31, 2025 | 0.375 | 399688 | 0.750 | 32409 |
| March 31, 2026 | 0.375 | 400136 | 0.750 | 32410 |
|  | $1.125 | $1199071 | $2.250 | $97229<br> \* |

---

\*Of the total distributions declared for Series B during the nine months ended March 31, 2026, $72,921 was an increase in liquidation preference and $24,308 was the cash dividend.

During the nine months ended March 31, 2026, the Operating Partnership paid Series A preferred distributions of $1,197,749, of which $79,290 have been reinvested under the preferred stock DRIP. During the nine months ended March 31, 2026, the Operating Partnership paid Series B preferred distributions of $97,229, none of which was reinvested.

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The following table reflects the dividends per share that we have declared on our common stock and preferred stock during the nine months ended March 31, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Dividends** | **Dividends** | **Dividends** | **Dividends** | **Dividends** | **Dividends** |
|  | **Common Stock** | **Common Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** |
| **<u>During the Quarter Ended</u>** | **Per Share** | **Amount** | **Per Share** | **Amount** | **Per Share** | **Amount** |
| September 30, 2024 | $1.250 | $1679460 | $0.375 | $287036 | $0.750 | $45378 |
| December 31, 2024 | 0.500 | 673655 | 0.375 | 286686 | 0.750 | 63593 |
| March 31, 2025 | 0.500 | 786925 | 0.375 | 286981 | 0.750 | 79152 |
|  | $2.250 | $3140040 | $1.125 | $860703 | $2.250 | $188123<br> \* |

---

\*Of the total dividends declared for Series B during the nine months ended March 31, 2025, $141,096 was an increase in liquidation preference and $47,027 was the cash dividend.

During the nine months ended March 31, 2025, we paid common dividends of $4,015,938, none of which has been reinvested under our common stock DRIP. During the nine months ended March 31, 2025, we paid Series A preferred dividends of $858,456 and Series B preferred dividends of $176,258, of which $140,091 and $9,333 have been reinvested under our preferred stock DRIP, respectively.

The above dividends declared were recorded as dividends payable in the consolidated balance sheets as of March 31, 2025, and were subsequently paid in April 2025.

The following table reflects the distributions declared by the Operating Partnership for the Class A and preferred unit holders during the nine months ended March 31, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Distributions** | **Distributions** | **Distributions** | **Distributions** | **Distributions** | **Distributions** |
|  | **Class A Units** | **Class A Units** | **Series A Preferred Units** | **Series A Preferred Units** | **Series B Preferred Units** | **Series B Preferred Units** |
| **<u>During the Quarter Ended</u>** | **Per Share** | **Amount** | **Per Share** | **Amount** | **Per Share** | **Amount** |
| September 30, 2024 | $0.125 | $10269 | $0.375 | $382489 | $0.750 | $32410 |
| December 31, 2024 | 0.050 | 4095 | 0.375 | 397969 | 0.750 | 32409 |
| March 31, 2025 | 0.050 | 4095 | 0.375 | 398388 | 0.750 | 32410 |
|  | $0.225 | $18459 | $1.125 | $1178846 | $2.250 | $97229<br> \* |

---

\*Of the total distributions declared for Series B during the nine months ended March 31, 2025, $72,922 was an increase in liquidation preference and $24,307 was the cash dividend.

During the nine months ended March 31, 2025, the Operating Partnership paid Class A preferred distributions of $24,643, none of which has been reinvested under our preferred stock DRIP. During the nine months ended March 31, 2025, the Operating Partnership paid Series A preferred distributions of $1,123,112 and Series B preferred distributions of $94,528, of which $73,400 of Series A preferred distributions have been reinvested under our preferred stock DRIP. Preferred (Series A and B) and common dividends declared during the quarter ended March 31, 2025, were paid in April 2025.

#### NOTE 15 – WARRANTS
On February 28, 2025, the Company entered into a securities purchase agreement with a single institutional investor pursuant to which the company offered and sold 153,403.40 shares of the Company's common stock, $0.0001 par value per share, pre-funded warrants to purchase up to 129,226.50 shares of common stock, and warrants to purchase up to an aggregate of 423,944.85 shares of common stock. The purchase price for each share and the exercise price for each common stock warrant to purchase one share of common stock was $17.10 per share, and the purchase price for each pre-funded warrant to purchase one share of common stock was $17.099. The common stock warrants consist of Series A common stock warrants and Series B common stock warrants. The Series A common stock warrants to purchase up to 141,314.95 shares of common stock are exercisable following the six-month anniversary of the closing date of the offering and expire 18 months from the date of issuance. The Series B common stock warrants to purchase up to 282,629.90 shares of common stock are exercisable following the six-month anniversary of the closing date of the offering and expire five years from the date of issuance.

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The gross proceeds to the Company from this offering were $2.62 million from the sale of the common stock and $2.62 million from the sale of the pre-funded warrants. Because the Series A and B warrants were issued in conjunction with the sale of the common stock and the pre-funded warrants, the total gross proceeds of $4.80 million from the sale of the common stock and pre-funded warrants were proportionally allocated between the common stock, prefunded warrants, and the Series A and B warrants based on the estimated fair values of the stock and the warrants at the time of the issuance in accordance with ASC 815-40, *Derivatives and Hedging – Contracts in Entity's Own Equity.* The total fair value allocation was: $2.30 million to common stock, $1.94 million to the pre-funded warrants, $0.38 million to Series A warrants and $0.22 million to Series B warrants.

As of March 31, 2026, there were 141,314.95 and 282,629.90 in Series A common stock warrants and Series B common stock warrants, respectively, issued and outstanding. The exercise price for the Series A and B warrants is $17.10 per share. All 129,226.50 prefunded warrants were exercised at an exercise price of $0.001 per share in July and August 2025.

The Company evaluated the terms of the warrants under ASC 815-40, *Derivatives and Hedging – Contracts in Entity's Own Equity*, and determined that they qualify for equity classification. This conclusion was based on the fact that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The warrants are indexed to the Company's own stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The contracts require physical or net share settlement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has sufficient authorized and unissued shares to settle the contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There are no settlement provisions requiring cash payment by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There are no variables or conditions that could cause the warrants to be reclassified as liabilities.

Accordingly, the warrants are classified as a component of stockholders' equity, and no subsequent remeasurement is required. The proceeds from the issuance of the warrants were allocated to additional paid-in capital upon issuance.

The following table summarizes warrant activity for the nine months ended March 31, 2026:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Number of Warrants** | **Number of Warrants** | **Number of Warrants** | **Number of Warrants** | **Weighted average exercise price** |
| **Description** | **Prefunded** | **Series A** | **Series B** | **Total** | **Weighted average exercise price** |
| Outstanding as of July 1, 2025 | 129226.50 | 141314.95 | 282629.90 | 553171.35 | 17.10 |
| Issued during the period | - | - | - | - | - |
| Exercised during the period | (129226.50) | - | - | (129226.50) | 17.10 |
| Expired during the period | - | - | - | - | - |
| Oustanding as of March 31, 2026 | - | 141314.95 | 282629.90 | 423944.85 | 17.10 |

---

All Series A and Series B common stock warrants became exercisable on September 3, 2025, and remained exercisable as of March 31, 2026.

#### NOTE 16 – SEGMENT REPORTING
ASC 280, *Segment Reporting* ("ASC 280"), establishes standards for reporting financial and descriptive information about an enterprise's reportable segments.

We operate as two primary operating and reportable segments: (i) commercial and (ii) residential. These segments include activities related to acquiring, owning, developing, and managing income-producing real estate properties. Although our properties are geographically diversified throughout the United States, we do not distinguish or group our operations on a geographical basis for purposes of allocating resources or measuring performance. Our business is managed based on these two segments for internal reporting purposes. The investment committee led by the Chief Executive Officer serves as the CODM and evaluates performance and makes resource allocation decisions on this basis. The CODM evaluates operating performance primarily based on the Company's net income (loss). Effective January 1, 2026, the CODM began separately evaluating the performance of the Company's commercial real estate portfolio and residential real estate portfolio following the January 2026 Portfolio Reorganization and the formation of MAC. As a result, the Company changed its segment reporting structure and now presents two reportable segments: (i) commercial and (ii) residential. Prior period financial information has been recast to reflect this change in segment reporting. Expenses that are significant are the same as those presented in our consolidated statements of operations. Additionally, the CODM reviews the asset information and capital expenditures on a consolidated basis that are the same as shown on the accompanying consolidated balance sheets and statements of cash flows.

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Our customers in the United States accounted for 100% of our revenues and we do not have any property or equipment outside of the United States.

We also have a real estate-related debt and equity securities investment portfolio; however, this portfolio does not constitute a reportable segment under ASC 280.

Segment net loss includes the direct costs of the reportable segment. Certain costs, including asset management fees to related party, administrative cost reimbursements to related party, directors' fees, and transfer agent cost reimbursements to related party, and various other general corporate costs that are not specifically allocable to the segments, are included in the corporate/other columns below.

The Company's segments derive revenue primarily from rental and other property income. The following financial metrics are regularly reviewed by the CODM:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Commercial** | **Commercial** | **Residential** | **Residential** | **Corporate/Other\*** | **Corporate/Other\*** |
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** | **2026** | **2025** | **2026** | **2025** |
|  Segment revenue | $3570844 | $2804920 | $1870660 | $1468726 | $- | $- |
|  Expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 1315550 | 1884388 | 799186 | 750229 | - | - |
| &nbsp;&nbsp;&nbsp; Interest expense | 1242339 | 1265316 | 819286 | 1298246 | 409937 | 98302 |
| &nbsp;&nbsp;&nbsp; Property operating and maintenance | 1098601 | 1196427 | 815004 | 692509 | 3200 | 801 |
| &nbsp;&nbsp;&nbsp; Asset management fees to related party | - | - | - | - | 807830 | 863824 |
| &nbsp;&nbsp;&nbsp; General and administrative | - | - | - | - | 233696 | 895587 |
| &nbsp;&nbsp;&nbsp; Professional fees | - | - | - | - | 141675 | 933624 |
| &nbsp;&nbsp;&nbsp; Administrative cost reimbursements to related party | - | - | - | - | 220250 | 167463 |
| &nbsp;&nbsp;&nbsp; Directors' fees | - | - | - | - | 36250 | 55863 |
| &nbsp;&nbsp;&nbsp; Transfer agent cost reimbursements to related party | - | - | - | - | - | 1537 |
|  Segment net loss | (85646) | (1541211) | (562816) | (1272258) | (1852838) | (3017001) |
|  *Reconciliation of loss:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Other income (loss), net | - | - | - | - | 1515516 | (262610) |
|  Loss before income tax | $(85646) | $(1541211) | $(562816) | $(1272258) | $(337322) | $(3279611) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Commercial** | **Commercial** | **Residential** | **Residential** | **Corporate/Other\*** | **Corporate/Other\*** |
|  | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** | **Nine Months Ended March 31,** |
|  | **2026** | **2025** | **2026** | **2025** | **2026** | **2025** |
| Segment revenue | $9556623 | $12834270 | $5018001 | $4421921 | $- | $- |
| Expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 4720911 | 5451333 | 2263528 | 1639964 | - | - |
| &nbsp;&nbsp;&nbsp; Interest expense | 3574874 | 3799910 | 2424521 | 2623474 | 1152450 | 98302 |
| &nbsp;&nbsp;&nbsp; Property operating and maintenance | 3700329 | 3458030 | 2366416 | 2020921 | 3200 | - |
| &nbsp;&nbsp;&nbsp; Asset management fees to related party | - | - | - | - | 2584957 | 2570860 |
| &nbsp;&nbsp;&nbsp; General and administrative | - | - | - | - | 982808 | 1735449 |
| &nbsp;&nbsp;&nbsp; Professional fees | - | - | - | - | 718686 | 1499257 |
| &nbsp;&nbsp;&nbsp; Administrative cost reimbursements to related party | - | - | - | - | 660750 | 502391 |
| &nbsp;&nbsp;&nbsp; Directors' fees | - | - | - | - | 120750 | 177902 |
| &nbsp;&nbsp;&nbsp; Transfer agent cost reimbursements to related party | - | - | - | - | - | 4609 |
| &nbsp;&nbsp;&nbsp; Impairment loss |  | 9500167 |  |  |  |  |
| Segment net loss | (2439491) | (9375170) | (2036464) | (1862438) | (6223601) | (6588770) |
| *Reconciliation of loss:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Other income (loss), net | - | - | - | - | 2192037 | (133105) |
| Loss before income tax | $(2439491) | $(9375170) | $(2036464) | $(1862438) | $(4031564) | $(6721875) |

---

\* Consists of corporate overhead expenses that are not directly attributable to our commercial and residential segments.

The CODM does not review disaggregated expense information beyond the categories listed above.

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Entity-wide disclosures:

#### Commercial:
*Nine months ended March 31, 2026:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenue by geographic area:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• United States: $9,556,623

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Major customers: There is one customer accounted for with more than 10% of total revenue.

*Three months ended March 31, 2026:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenue by geographic area:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• United States: $3,570,844

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Major customers: There is no one customer accounted for with more than 10% of total revenue.

#### Residential:
*Nine months ended March 31, 2026:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenue by geographic area:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• United States: $5,018,001

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Major customers: There is no one customer accounted for with more than 10% of total revenue.

*Three months ended March 31, 2026:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenue by geographic area:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• United States: $1,870,660

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Major customers: There is no one customer accounted for with more than 10% of total revenue.

Our segment assets primarily consist of real estate assets, cash and cash equivalents, restricted cash, investments income, rents and other receivables and prepaid expenses and other assets. The following table sets forth our segment assets as of March 31, 2026, and June 30, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Commercial** | **Commercial** | **Residential** | **Residential** | **Corporate/Other** | **Corporate/Other** |
|  | **March 31, 2026** | **June 30, 2025** | **March 31, 2026** | **June 30, 2025** | **March 31, 2026** | **June 30, 2025** |
| Total assets | $126677483 | $122220840 | $107846127 | $102212393 | $4916514 | $11558945 |

---

Our segment liabilities primarily consist of mortgage notes payable, net, deferred rent and other liabilities, accounts payable and accrued liabilities and due to related entities. The following table sets forth our segment liabilities as of March 31, 2026, and June 30, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Commercial** | **Commercial** | **Residential** | **Residential** | **Corporate/Other** | **Corporate/Other** |
|  | **March 31, 2026** | **June 30, 2025** | **March 31, 2026** | **June 30, 2025** | **March 31, 2026** | **June 30, 2025** |
| Total liabilities | $75574898 | $28138582 | $63521552 | $54453530 | $15086776 | $59858623 |

---

#### NOTE 17 – COMMITMENTS
We commenced the Aurora at Green Valley construction in September 2024. MRC Aurora entered into several contracts with third parties for the construction of the project. These contracts represented MRC Aurora's commitment to incur future expenditures for the development of the project. The construction was completed in September 2025. Therefore, as of March 31, 2026, MRC Aurora had no outstanding commitments with third parties. As of June 30, 2025, the total commitments amounted to $5.91 million.

#### NOTE 18 – FORMATION OF MAC AND SUMMARIZED FINANCIAL INFORMATION
As discussed in Note 1, on January 1, 2026, the Company contributed all of its multi-family residential properties (Commodore, The Park View, Hollywood and Shoreline Apartments and Aurora at Green Valley) and the Blue Ridge development project to a newly formed entity, MAC, in exchange for 1,906,580 shares of MAC (on a 1:1 basis with the Parent Company's outstanding shares). MAC is focused on developing and owning multi-family properties on the West Coast. The Parent Company is the sole shareholder of MAC as of March 31, 2026.

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In connection with the formation of MAC, MAC OP was established as the operating partnership through which substantially all of MAC's business is conducted. The contributed properties and development project are held by MAC OP, which owns and operates a portfolio of six residential properties. MAC is the sole general and limited partner of MAC OP.

The following summarized financial information presents the combined financial position and results of operations of MAC and its subsidiaries (collectively, the "MAC Group"), including MAC OP and its consolidated real estate entities.

#### Basis of Presentation
The summarized financial information has been derived from the Company's consolidated financial statements and reflects the financial position and results of operations of the MAC Group. Intercompany transactions within the MAC Group have been eliminated; however, transactions between the MAC Group and the Company have not been eliminated. This information is not intended to present the MAC Group as if it were a standalone independent entity.

#### Condensed Balance Sheet — MAC Group

---

| | |
|:---|:---|
|  | **March 31, 2026** |
| **Assets** | |
| Real estate assets, net | $104364173 |
| Cash, cash equivalents and restricted cash | 1903852 |
| Other assets | 1578102 |
| **Total assets** | $107846127 |
| **Liabilities** |  |
| Mortgage notes payable and other notes payable, net | $62016680 |
| Accounts payable and accrued liabilities | 541712 |
| Due to related entities | 307913 |
| Other liabilities | 655247 |
| **Total liabilities** | 63521552 |
| **Equity** |  |
| Stockholders' equity | 35157379 |
| Non-controlling interests | 9167196 |
| **Total equity** | 44324575 |
| **Total liabilities and equity** | $107846127 |

---

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#### Condensed Statement of Operations — MAC Group

---

| | |
|:---|:---|
|  | **Three Months**<br> **Ended**<br>**March 31, 2026** |
|  Rental, reimbursements and other property income | $1870660 |
|  Expenses |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 798726 |
| &nbsp;&nbsp;&nbsp; Interest expense | 825103 |
| &nbsp;&nbsp;&nbsp; Property operating and maintenance | 815001 |
| &nbsp;&nbsp;&nbsp; General and administrative | 151200 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 2590030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating loss | (719370) |
|  Other income | 17612 |
|  Net loss | (701758) |
| &nbsp;&nbsp;&nbsp; Net loss attributable to non-controlling interests | (243559) |
|  Net loss attributable to common stockholders | $(945317) |

---

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**Item 2.** **MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**<br>

*Statements by MacKenzie Realty Capital, Inc., together with its subsidiaries as discussed in Note 1 of the financial statements included in this report (collectively, the "Company," "we," or "us") contained herein, other than historical facts, may constitute "forward-looking statements." These statements may relate to, among other things, future events or our future performance or financial condition. In some cases, stockholders can identify forward-looking statements by terminology such as "may," "might," "believe," "will," "provided," "anticipate," "future," "could," "growth," "plan," "intend," "expect," "should," "would," "if," "seek," "possible," "potential," "likely" or the negative of such terms or comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. An economic downturn could impair our ability to continue to operate, which could lead to the loss of some or all of our investments, a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities, and interest rate volatility could adversely affect our results, particularly if we elect to use leverage as a part of our investment strategy. For a discussion of factors that could cause our actual results to differ from forward-looking statements contained herein, please see the discussion under the heading "Risk Factors" in our annual report on Form 10-K, as updated by the Company's subsequent filings with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act").*

*Further, we may experience fluctuations in our operating results due to a number of factors, including the effect of the return on our equity investments, the interest rates payable on our debt investments, the default rates on such investments, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.*

#### Overview
Historically, we were an externally managed non-diversified closed-end management investment company that elected to be treated as a BDC under the Investment Company Act of 1940 (the "1940 Act"), but we withdrew our election to be treated as a BDC on December 31, 2020. Our objective remains to generate both current income and capital appreciation through real estate-related investments. We have elected to be treated as a REIT under the Code and, as a REIT, we are not subject to federal income taxes on amounts that we distribute to the stockholders, provided that, on an annual basis, we generally distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meet certain other conditions. To the extent that we satisfy the annual distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed REIT taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. Our wholly owned subsidiary, MacKenzie NY 2, is subject to corporate federal and state income tax on its taxable income at regular statutory rates.

We are managed by the Advisers, and MacKenzie provides the non-investment management services and administrative services necessary for us to operate.

*Investment Plan*

We generally seek to invest in real estate assets. We intend to invest at least 80% of our total assets in equity or debt in real estate assets. We can invest up to 20% of our total assets in investment securities of real estate companies. A real estate company is one that (i) derives at least 50% of its revenue from the ownership, construction, financing, management or sale of commercial, industrial or residential real estate and land; or (ii) has at least 50% of its assets invested in such real estate. We will not invest in general partnerships, joint ventures, or other entities that do not afford limited liability to their security holders. However, limited liability entities in which we invest may hold interests in general partnerships, joint ventures, or other non-limited liability entities. When purchasing securities, we generally favor purchasing securities issued by entities that have (i) completed the initial offering of their securities, (ii) operated for a period of at least two years, and typically more than five years, from the completion of their initial offering, and (iii) fully invested their capital in real properties or other real estate related investments.

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Our investment objective is to generate current income and capital appreciation through the acquisition of real estate assets and debt and equity real estate-related investments. Our independent directors review our investment policies periodically, at least annually, to confirm that our policies are in the best interests of our stockholders. Each such determination and the basis thereof are contained in the minutes of our Board of Directors meetings.

We seek to accomplish our objective by rigorously analyzing the value of and risks associated with potential acquisitions, and, for up to 20% of our total assets, by acquiring real estate securities at significant discounts to their net asset value.

We intend to expand our investment strategy to include acquisition of distressed real properties. Like our other investments, we would expect to hold distressed properties and infuse funds as necessary to extract unrealized value.

We will engage in various investment strategies to achieve our overall investment objectives. The strategy we select depends upon, among other things, market opportunities, the skills and experience of the Advisers' investment team and our overall portfolio composition. We generally seek to acquire assets that produce ongoing distributable income for investors, yet with a primary focus on purchasing such assets at a discount from what the Advisers estimate to be the actual or potential value of the real estate.

We intend to continue our historical activities related to launching tender offers to purchase shares of non-traded REITs in order to boost our short-term cash flow and to support our distributions, subject to the constraint that such securities will not exceed 20% of our portfolio. We believe this niche strategy will allow us to pay distributions that are supported by cash flow rather than paying back investors' capital, although there can be no assurance that some portion of any distribution is not a return of capital.

*Rental, Reimbursement and Other Property Income*

We generate rental revenue by leasing office space and apartment units to a building's tenants. These tenant leases fall under the scope of ASC Topic 842 and are classified as operating leases. Revenues from such leases are recognized on a straight-line basis over the terms of the lease agreements.

*Investment Income*

We generate revenues in the form of operating income, capital gains and dividends on dividend-paying equity securities or other equity interests that we acquire, in addition to interest on any debt investments that we hold. Further, we may generate revenue in the form of commitment, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based fees. Any such fees are generated in connection with our investments and recognized as earned.

*Expenses*

Our primary operating expenses include the payment of: (i) advisory fees to our Advisers; (ii) our allocable portion of overhead and other expenses incurred by MacKenzie in performing its obligations under the Administration Agreement; and (iii) other real estate properties operating expenses, including interest expenses on debt obtained to finance our property acquisitions, as detailed below. Our investment advisory fees compensate our Investment Adviser and Real Estate Adviser for their work in identifying, evaluating, negotiating, closing, monitoring and servicing our investments. Our expenses must be billed to and paid by us, except that MacKenzie may be reimbursed for actual cost of goods and services used by us and certain necessary administrative expenses. We will bear all other expenses of our operations and transactions, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cost of operating and maintaining real estate properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cost of calculating our net asset value, including the cost of any third-party valuation services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cost of effecting sales and repurchases of our shares and other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interest payable on debt, if any, to finance our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence reviews of prospective investments and third-party
 advisory fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• transfer agent and safekeeping fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees and expenses associated with marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• federal and state registration fees, any stock exchange listing fees in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• federal, state and local taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• independent directors' fees and expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brokerage commissions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fidelity bond, directors and officers errors and omissions liability insurance, and other insurance premiums;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• direct costs and expenses of administration and sub-administration, including printing, mailing, long distance telephone and staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees and expenses associated with independent audits and outside legal costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• costs associated with our reporting and compliance obligations under the Exchange Act and applicable federal and state securities laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all other expenses incurred by either MacKenzie or us in connection with administering our business, including payments under the Administration Agreement that are based upon our allocable portion of overhead and other expenses
 incurred by MacKenzie in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the costs of compensation and
 related expenses of our chief compliance officer and our chief financial officer and any administrative support staff.

#### Portfolio Investment Composition
As of March 31, 2026, we owned interests in various real estate limited partnerships and REITs. In addition, we held investments in entities that own real estate where we have sufficient control for the investments to be considered non-securities for purposes of the Investment Company Act of 1940, but not enough control to require consolidation of their financial statements with ours. These investments are reported as "Equity method investments, at fair value." The following table summarizes the composition of our investments at fair value as of March 31, 2026, and June 30, 2025:

---

| | | |
|:---|:---|:---|
|  | **Fair Value** | **Fair Value** |
|  **<u>Investments, at fair value</u>** | **March 31, 2026** | **June 30, 2025** |
|  Highlands REIT, Inc. | $3045 | $37403 |
|  Moody National REIT II, Inc. | - | 2963 |
|  National Healthcare Properties, Inc. | 140621 | 740894 |
|  SmartStop Self Storage REIT, Inc. - Class A | - | 29154 |
|  Sonida Senior Living, Inc. | 9288 | - |
|  Starwood Real Estate Income Trust, Inc. - Class I | 100457 | - |
|  Starwood Real Estate Income Trust, Inc. - Class S | 3155138 | 939114 |
|  Strategic Storage Trust VI, Inc. Class P | 18778 | - |
| &nbsp;&nbsp;&nbsp; Total | $3427327 | $1749528 |
|  | **Fair Value** | **Fair Value** |
|  **<u>Equity method investments, at fair value</u>** | **March 31, 2026** | **June 30, 2025** |
|  Lakemont Partners, LLC | $708780 | $711740 |
|  Martin Plaza Associates, LP | 596258 | 531544 |
|  Westside Professional Center I, LP | 1182116 | 882167 |
| &nbsp;&nbsp;&nbsp; Total | $2487154 | $2125451 |

---

#### Properties
In addition to our investment securities, we currently own and manage nine commercial real estate properties: Satellite Place Office Building located in Duluth, GA, 1300 Main Office Building, First & Main Office Building and Main Street West Office Building located in Napa, CA, Woodland Corporate Center located in Woodland, CA, 220 Campus Lane Office Building, Green Valley Medical Center and Green Valley Executive Center located in Fairfield, CA and One Harbor Center located in Suisun, CA and five residential apartments: Aurora at Green Valley located in Fairfield, CA, Commodore Apartments and The Park View Apartments, located in Oakland, CA, Hollywood Apartments located in Los Angeles, CA, and the Shoreline Apartments located in Concord, CA.

Aurora at Green Valley is owned through our subsidiary MRC Aurora. 1300 Main Office Building, First & Main Office Building, Main Street West Office Building, Woodland Corporate Center, Hollywood Apartments, Shoreline Apartments and Green Valley Medical Center are owned through our subsidiary, the Operating Partnership; Commodore Apartments are owned through our subsidiary, Madison; The Park View Apartments is owned through our subsidiary, PVT and Satellite Place Office Building is owned through our subsidiary, MacKenzie Satellite. In October 2025, we listed Woodland Corporate Center Two for sale.

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We own our properties through our subsidiaries, which are listed in the table below.

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| | |
|:---|:---|
| <u>Property:</u> | <u>Property Owners</u> |
| Commodore Apartments | Madison-PVT Partners LLC |
| The Park View Apartments | PVT-Madison Partners LLC |
| Hollywood Apartments | PT Hillview GP, LLC |
| Shoreline Apartments | MacKenzie-BAA IG Shoreline LLC |
| Aurora at Green Valley | MRC Aurora, LLC |
| Satellite Place Office Building | MacKenzie Satellite Place Corp. |
| First & Main Office Building | First & Main, LP |
| 1300 Main Office Building | 1300 Main, LP |
| Woodland Corporate Center | Woodland Corporate Center Two, LP |
| Main Street West Office Building | Main Street West, LP |
| 220 Campus Lane Office Building | 220 Campus Lane, LLC |
| Green Valley Executive Center | GV Executive Center, LLC |
| One Harbor Center | One Harbor Center, LP |
| Green Valley Medical Center | Green Valley Medical Center, LP |

---

We use occupancy rate as a key performance indicator to evaluate the performance of our real estate properties. Occupancy rate on our commercial and residential properties are calculated as 66% and 88%, respectively, as of the measurement date. We believe occupancy rate provides investors with a useful measure of the revenue-generating capacity of our portfolio. Management uses occupancy rate to monitor leasing progress, identify re-leasing risk, and compare portfolio performance across periods.

#### January 2026 Portfolio Reorganization
We believe the market values office properties differently than the market values multi-family properties. More specifically, the market discounts office properties because of recent, widespread vacancies in office buildings. We believe the market views those vacancies as pervasive even though most of our office properties have high occupancy levels, as disclosed below. The market does not similarly discount multi-family properties. Therefore, effective January 1, 2026, we have contributed our multi-family residential portfolio into a newly formed entity, MAC, so that investors can evaluate the two portfolios separately. On January 8, 2026, the Board of Directors of MAC approved an estimated net asset value of the common stock of MAC equal to $18.10 per share on a fully diluted basis as of the contribution date. To estimate MAC's per share value, the MAC board utilized the net asset value or "NAV" method which is based on the fair value of real estate, and all other assets, less the fair value of total liabilities. MAC is a wholly owned consolidated subsidiary of the Parent Company, and MAC's assets, liabilities, revenues, and expenses are included in the Company's consolidated financial statements. Shares of the Parent Company's common stock and preferred stock represent indirect interests in MAC through the Parent Company's ownership of MAC. The estimated NAV of $18.10 per MAC share was determined by MAC's Board of Directors for purposes of allowing investors to evaluate the two portfolios separately and does not represent the NAV per share of MacKenzie Realty Capital, Inc. common or preferred stock.

In connection with the formation of MAC, MAC Operating Partnership, LP ("MAC OP") was established as the operating partnership through which substantially all of MAC's business is conducted. The contributed properties and development project are held through subsidiaries of MAC OP, which directly or indirectly owns and operates a portfolio of six residential properties. MAC owns all of the limited partnership units and is the sole general partner of MAC OP.

#### Commercial Properties:
The following commercial properties are owned through subsidiaries of the Operating Partnership:

#### 1300 Main Office Building
1300 Main Office Building contains 20,145 square feet, of which approximately 13,900 square feet is office space and the remainder is designated as retail space. As of March 31, 2026, the property is 85% occupied by 7 tenants. The following table shows the largest tenants and square footage occupied:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| Wilson Daniels | Wine Wholesaler | 6712 | $380171 | 6/15/2031 | 1, 5 years |
| Norcal Gold | Real Estate | 2896 | $181297 | 3/31/2026 | No |
| Bao Long Li | Restaurant | 3212 | $179340 | 11/30/2030 | No |
| Catered With Class | Restaurant | 2409 | $106168 | 3/2/2031 | 1, 3 years |

---

The following information pertains to lease expirations at 1300 Main Office Building:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2026 | 1 | 2896 | $181297 | 19% |
| 2028 | 1 | 225 | $6000 | 1% |
| 2029 | 1 | 1059 | $71535 | 7% |
| Thereafter | 4 | 12916 | $701958 | 73% |

---

#### First & Main Office Building
First & Main Office Building contains 27,398 square feet, of which approximately 19,000 square feet is office space and the remainder is designated as retail space. As of March 31, 2026, the property is 87% occupied by 8 tenants. The following table shows the largest tenants and square footage occupied:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| GVM Law | Legal Services | 9470 | $523712 | 9/20/2036 | 2, 5 years |
| Brotlemarkle | Accounting Services | 4366 | $254986 | 7/31/2030 | 2, 5 years |
| Napa Palisades | Restaurant | 3462 | $202672 | 8/31/2040 | No |
| Phoenix Ultra Lounge | Restaurant | 2220 | $130320 | 9/30/2037 | No |

---

The following information pertains to lease expirations at First & Main Office Building:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2027 | 1 | 1135 | $76503 | 6% |
| 2029 | 1 | 1307 | $73228 | 5% |
| Thereafter | 6 | 21505 | $1222916 | 89% |

---

#### Main Street West Office Building
Main Street West Office Building contains 38,135 square feet, of which approximately 32,700 square feet is office space and the remainder is designated as retail space. As of March 31, 2026, the property is 97% occupied by 9 tenants. AUL Corporation elected to terminate its lease as of February 3, 2025. During the year ended June 30, 2025, we recorded an impairment loss of $9,500,167 on Main Street West Office Building due to the early lease termination of AUL Corporation, and the foreclosure proceedings due to maturity default of the debt secured by the property. On March 25, 2025, the Company entered into the Forbearance Agreement with the Prior Lender and as part of the Forbearance Agreement, the Company paid down $5 million on the loan and took control of the property from the receiver in April 2025. The loan from the Prior Lender was paid off on June 6, 2025, with the proceeds from a new loan from EverTrust Bank. The following table shows the largest tenants and square footage occupied:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| Napa County | District Attorney Offices | 13806 | $1292643 | 12/31/2027 | No |
| State of California | Health Care | 4697 | $261885 | 10/31/2028 | No |
| Strategies To Empower People | Health Care | 4875 | $231021 | 1/28/2028 | No |
| Descor Inc. | Construction | 4066 | $216000 | 12/29/2030 | No |

---

The following information pertains to lease expirations at Main Street West Office Building:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2026 | 2 | 2940 | $122000 | 5% |
| 2027 | 2 | 15941 | $1420671 | 56% |
| 2028 | 2 | 9572 | $492906 | 20% |
| Thereafter | 3 | 8725 | $475776 | 19% |

---

#### Satellite Place Office Building
Satellite Place Office Building contains 134,785 square feet, all of which is office space. As of March 31, 2026, the property is approximately 33% occupied by 5 tenants. The following table shows the largest tenants and square footage occupied:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| Codoxo | Healthcare Software | 13956 | $302537 | 6/30/2030 | No |
| Polytron | Title Services | 10737 | $222153 | 4/30/2031 | 2, 5 years |
| Ampirical | Engineering Consulting | 9790 | $212345 | 9/30/2030 | 2, 5 years |
| OS National LLC | Title Services | 6188 | $124567 | 11/30/2028 | 1, 3 years |

---

The following information pertains to lease expirations at Satellite Place Office Building:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2028 | 1 | 6188 | $124567 | 13% |
| 2029 | 1 | 4383 | $100100 | 10% |
| 2030 | 2 | 23746 | $514882 | 54% |
| Thereafter | 1 | 10737 | $222153 | 23% |

---

#### Woodland Corporate Center
Woodland Corporate Center contains 37,034 square feet, of which 7,797 square feet are laboratories and the rest is office space. All of the laboratory space is occupied by Agtech Innovation. Effective October 2025, the property has been marketed for sale. Accordingly, Woodland Corporate Center is classified as an asset held for sale as of March 31, 2026. As of March 31, 2026, the property is 91% occupied by 12 tenants. The following table shows the largest tenants and square footage occupied:

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| Agtech Innovation | Research and Development | 12940 | $342914 | 4/9/2031<br> 8/31/2032<br> 12/21/2032 | No |
| Children's Home Society | Non-Profit Education | 4042 | $154497 | 10/31/2028 | No |
| Burger Rehab | Physical Therapy | 4013 | $126503 | 9/22/2028 | No |
| California Dept of Rehabilitation | Rehabilitation Services | 3057 | $120763 | 3/31/2036 | No |

---

The following information pertains to lease expirations at Woodland Corporate Center:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2026 | 1 | 1433 | $46068 | 4% |
| 2027 | 2 | 2160 | $87017 | 8% |
| 2028 | 5 | 10826 | $381032 | 35% |
| Thereafter | 5 | 19227 | $580144 | 53% |

---

#### Green Valley Executive Center
Green Valley Executive Center contains 46,100 square feet, of which approximately 41,600 square feet is office space and the remainder is designated as retail space. As of March 31, 2026, the property is 96% occupied by 15 tenants. The following table shows the largest tenants and square footage occupied:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| Community Housing Opportunities | Real Estate | 8510 | $352596 | 8/31/2026 | No |
| Arkshire Financial, LLC | Insurance | 7016 | $311928 | 2/28/2027 | No |
| Larsen & Toubro Limited, Inc. | Multinational Conglomerate | 5130 | $285324 | 2/13/2028 | No |
| Sticky Rice | Restaurant | 4388 | $191836 | 8/17/2034 | No |

---

The following information pertains to lease expirations at Green Valley Executive Center:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2026 | 2 | 11491 | $482256 | 24% |
| 2027 | 3 | 9147 | $420132 | 21% |
| 2028 | 2 | 6098 | $331524 | 16% |
| Thereafter | 8 | 17396 | $782066 | 39% |

---

#### One Harbor Center
One Harbor Center contains 49,573 square feet, all of which is office space. As of March 31, 2026, the property is 81% occupied by 12 tenants. The following table shows the largest tenants and square footage occupied:

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
|  Shimmick Construction Company, Inc. | Construction | 10221 | $346332 | 5/15/2027 | No |
| Equiventure | Health Care | 6446 | $238008 | 11/16/2033 | 4, 5 years |
| Wiseman Company Mgt. | Real Estate | 4883 | $172008 | 6/1/2028 | No |
| Connections for Life | Health Care | 3443 | $109218 | 3/29/2036 | No |

---

The following information pertains to lease expirations at One Harbor Center:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2026 | 5 | 9500 | $347693 | 24% |
| 2027 | 1 | 10221 | $346332 | 24% |
| 2028 | 4 | 10394 | $394985 | 28% |
| Thereafter | 2 | 9889 | $347226 | 24% |

---

#### Green Valley Medical Center
Green Valley Medical Center contains 31,590 square feet, of which approximately 20,100 square feet is office space, approximately 8,300 square feet is health care space, and the remainder is designated as retail space. As of March 31, 2026, the property is 91% occupied by 13 tenants. The following table shows the largest tenants and square footage occupied:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Largest Tenants** <br> **Business** | **Business** | **Square Ft. Occupied** | **Annual Base Rent** | **Lease** <br> **Expiration** | **Renewal** <br> **options** |
| Cal OES | State Emergency Services | 7605 | $299154 | 8/31/2031 | No |
| California Forever | Real Estate | 3341 | $208216 | 9/17/2029 | No |
| Jethro Nicolas et al | Health Care | 3409 | $147288 | 4/14/2035 | No |
| Green Valley Oral Surgery | Health Care | 2179 | $104050 | 5/7/2029 | 2, 10 years |

---

The following information pertains to lease expirations at Green Valley Medical Center:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of Leases Expiring** | **Total Area** | **Annual Base Rent** | **Percentage of Gross Rent** |
| 2026 | 1 | 1332 | $69490 | 6% |
| 2027 | 2 | 2624 | $102696 | 8% |
| 2028 | 1 | 2179 | $104050 | 8% |
| Thereafter | 9 | 22610 | $966980 | 78% |

---

#### 220 Campus Lane Office Building
220 Campus Lane Office Building was purchased in September 2023. The property was vacant at the time of acquisition. Following the acquisition, we renovated the building and commenced leasing activities. As of March 31, 2026, the building was approximately 28% leased, with six tenants occupying an aggregate of 12,126 square feet. The annualized base rent from these tenants totals approximately $409,248.

#### Residential Properties:
Effective January 1, 2026, the Company contributed all of its multi-family residential properties, consisting of Commodore Apartments, The Park View Apartments, Hollywood Apartments, Shoreline Apartments and Aurora at Green Valley, as well as the Blue Ridge development project, to MAC. The contributed properties and development project are held through subsidiaries of MAC OP, through which substantially all of MAC's business is conducted. MAC owns all of the limited partnership units and is the sole general partner of MAC OP.

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#### Commodore Apartments
Commodore Apartments is a mid-rise apartment building built in 1912 and has 48 units. As of March 31, 2026, Commodore Apartments is approximately 89.6% occupied.

#### The Park View Apartments
The Park View Apartments is also a mid-rise apartment building built in 1929 and has 39 units. As of March 31, 2026, The Park View Apartments is approximately 94.9% occupied.

#### Hollywood Apartments
Hollywood Apartments, located in Los Angeles, CA, is a mid-rise apartment building built in 1917 and has 54 units. The property contains approximately 38,000 square feet of net rentable apartment area and 8,610 square feet of retail space. All of the retail space is currently occupied by restaurants and nightclubs. As of March 31, 2026, the apartments units are 94.4% occupied.

#### Shoreline Apartments
Shoreline Apartments is a mid-rise apartment building built in 1967 and renovated in 2015 which has 84 units. As of March 31, 2026, Shoreline Apartments building is approximately 89.3% occupied.

#### Aurora at Green Valley
Aurora at Green Valley is a newly constructed multi-family residential community consisting of 72 units across three buildings, along with a clubhouse. The project was financed through $10 million of preferred equity capital (including $7.23 million from outside investors) and a $17.15 million construction loan from Valley Strong Credit Union. The clubhouse opened in mid-June 2025 for pre-leasing activity. The first residential building was completed in July 2025, with leasing commencing in August 2025. The remaining two buildings were completed in August and September 2025, with leasing commencing shortly thereafter. As of March 31, 2026, the property was approximately 75% occupied. As of the date of this report, the property is 88.9% leased.

The following table provides information regarding each of the residential properties as of March 31, 2026:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Property Name** | **Sector** | **Location** | **Square** <br> **Feet** | **Units** | **Percentage Leased** | **Annual** <br> **Base Rent** | **Monthly Base** <br> **Rent/Occupied** <br> **Unit** |
| The Park View Apartments | Multi-Family Residential | Oakland, CA | 31020 | 39 | 94.9% | $1072800 | $2416 |
| Commodore Apartment | Multi-Family Residential | Oakland, CA | 26635 | 48 | 89.6% | $830799 | $1610 |
| Hollywood Apartments  | Multi-Family Residential | Los Angeles, CA | 37971 | 54 | 94.4% | $1310141 | $2141 |
|  Hollywood Apartments (Retail Space) | Retail | Los Angeles, CA | 8610 | 1 | 100% | $353657  | $29471 |
| Shoreline Apartments | Multi-Family Residential | Concord, CA | 68350 | 84 | 89.3% | $1914489 | $2127 |
| Aurora at Green Valley | Multi-Family Residential | Fairfield, CA | 54936 | 72 | 75.0% | $1652688 | $2550 |

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#### Campus Lane Land Development (known as Blue Ridge)
In addition to our commercial and residential real estate properties, we own a vacant parcel adjacent to the 220 Campus Lane Office Building in Fairfield, California (the "Campus Lane Land"). This parcel of land was acquired with the objective of developing multi-family residential community and is owned by the MAC OP through its subsidiary, Campus Lane Residential, LLC ("Campus Lane Residential").

This project, known as Blue Ridge, is expected to consist of 84 luxury multi-family units in Solano County, one of the fastest-growing counties in California. The entitlement process for the vacant land is on-going. Our goal is to commence construction in fall 2027; however, this is subject to the city's approval of our development application submitted in April 2024 and to securing the necessary financial resources. The Company is currently evaluating potential development and financing structures for the project, including discussions with a third-party developer pursuant to which the Company may contribute the land and the third party may arrange construction financing and development capital for the project.

We currently do not have plans for any other major renovation or development of any properties except for Blue Ridge, as discussed above. Each property is being held for income generation and potential value appreciation through increased occupancy and/or rental rates. We maintain property and liability insurance policies on all properties, which we believe are adequate and in line with industry standards.

#### Material Changes in Financial Condition
*Real estate assets*

During the nine months ended March 31, 2026, total real estate assets, net decreased by $10.52 million. The decrease was primarily attributable to the reclassification of $11.65 million of net real estate assets related to Woodland Corporate Center Two to assets held for sale as of March 31, 2026, and to $7.09 million of additional depreciation and amortization. These decreases were partially offset by $8.25 million of real estate additions, including $6.29 million related to the capitalization of additional construction costs at Aurora at Green Valley.

*Mortgage notes payable, net*

During the nine months ended March 31, 2026, the Company borrowed an additional $10.33 million on the MRC Aurora construction loan from Valley Strong Credit Union, which was primarily due to fund building expenditures associated with the completion of Aurora at Green Valley.

#### Current Market and Economic Conditions
The markets in which our properties operate are highly competitive, and each property faces unique competitive challenges based upon local economic, political, and legal factors. Our West coast multi-family residential properties are generally restricted from raising rents significantly by local rent control laws. Rent control can result in average rents that are significantly below market, and this provides some buffer against declining rents in a recession. However, in order to encourage development, rent control usually does not apply to newer properties. Since older properties may be unable to raise rents as needed, they may be unable to make improvements that could allow them to compete with newer properties.

Our consolidated office properties, 1300 Main Office Building, First & Main Office Building, Main Street West Office Building, One Harbor Center, Satellite Place Office Building, Woodland Corporate Center, 220 Campus Lane Office Building and Green Valley Executive Center are all Class A suburban office properties and are located in Napa, Woodland, Suisun City and Fairfield, California and Duluth, Georgia. Available office space is plentiful in each market in which our office properties are located, which magnifies the competitive challenges that we face in these markets.

The broader economy has been experiencing increased levels of inflation, higher interest rates and tightening monetary and fiscal policies. The Federal Reserve increased the federal funds rate multiple times in 2022 and 2023 then paused hikes in the earlier part of 2024 before implementing rate cuts in the fourth quarter. While the Federal Reserve began implementing rate cuts in the fourth quarter of 2024, interest rates remain elevated compared to recent historical levels, which continues to impact real estate valuations and financing costs. We currently have fixed and variable interest rates for our loans. The rise in overall interest rates caused an increase in our variable-rate borrowing costs resulting in an increase in interest expense. The cumulative effect of the prior rate increases may adversely impact real estate asset values. In addition, a prolonged period of high and persistent inflation could cause an increase in our expenses. The current market and economic conditions could have a material impact on our business, cash flow and results of operations. It could also impact our ability to find suitable acquisitions, sell properties, and raise equity and debt capital.

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#### Results of Operations:

#### Comparison of the three months ended March 31, 2026 and 2025

#### Commercial Properties
*The commercial properties owned by us during the three months ended March 2026 and 2025 are as follows:*

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| | |
|:---|:---|
| **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **2026** | **2025** |
| Satellite Place Office Building | Satellite Place Office Building |
| First & Main Office Building | First & Main Office Building |
| 1300 Main Office Building | 1300 Main Office Building |
| Main Street West Office Building | Main Street West Office Building |
| Woodland Corporate Center | Woodland Corporate Center |
| 220 Campus Lane Office Building | 220 Campus Lane Office Building |
| Green Valley Executive Center | Green Valley Executive Center |
| One Harbor Center | One Harbor Center |
| Green Valley Medical Center | Green Valley Medical Center |

---

*Rental, reimbursements and other property income:*

During the three months ended March 31, 2026, we generated $3.57 million in rental and reimbursements revenues from our nine commercial properties, compared to $2.81 million during the three months ended March 31, 2025. The total increase in rental revenues was mainly due to higher occupancy at our Satellite Place Office Building and Main Street West Office Building.

*Expenses:*

*Property operating and maintenance expenses:*

Operating and maintenance expenses mainly consist of real estate taxes, utilities, repair and maintenance, cleaning, landscape, security, property management fees, insurance, and various other administrative expenses incurred in the operation of our commercial real estate assets. During the three months ended March 31, 2026, we incurred operating and maintenance expenses of $1.10 million in the operation of our nine commercial properties, compared to $1.19 million during the three months ended March 31, 2025. The slight decrease in the operating expenses was mainly due to the property tax refund from our Satellite Place Office Building.

*Depreciation and amortization:*

During the three months ended March 31, 2026, we recorded depreciation and amortization of $1.31 million attributable to the depreciation and amortization of real estate and intangible assets of our nine commercial properties, compared to $1.89 million during the three months ended March 31, 2025. The decrease in total depreciation and amortization of $0.58 million was mainly due to the impairment of assets related to our Main Street West Office Building and the write-off of tenant improvements, leasehold improvements, lease commissions, and in-place lease related to our Satellite Place Office Building due to an early lease termination of its anchor tenant in December 2024.

*Interest expense:*

During the three months ended March 31, 2026, we recorded $1.24 million of interest expense related to mortgage notes payable associated with the Company's nine commercial properties, compared to $1.27 million during the three months ended March 31, 2025.

The slight decrease of $0.03 million was primarily due to lower interest expense from Main Street West resulting from refinancing in May 2025. The decrease was partially offset by higher interest expense resulting from the First & Main loan extension in March 2026.

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#### Residential Properties
*The residential properties owned by us during the three months ended March 2026 and 2025 are as follows:*

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| | |
|:---|:---|
| **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| **2026** | **2025** |
| Commodore Apartments | Commodore Apartments |
| The Park View Apartments | The Park View Apartments |
| Hollywood Apartments | Hollywood Apartments |
| Shoreline Apartments | Shoreline Apartments |
| Aurora at Green Valley |  |

---

*Rental, reimbursements and other property income:*

During the three months ended March 31, 2026, we generated $1.87 million in rental and reimbursements revenues from our five residential properties, compared to $1.46 million from our four residential properties during the three months ended March 31, 2025. The total increase in rental revenues was mainly due to the to the completion of the Aurora at Green Valley in July 2025, which commenced leasing in August 2025.

*Expenses:*

*Property operating and maintenance expenses:*

Operating and maintenance expenses mainly consist of real estate taxes, utilities, repair and maintenance, cleaning, landscape, security, property management fees, insurance, and various other administrative expenses incurred in the operation of our residential real estate assets. During the three months ended March 31, 2026, we incurred operating and maintenance expenses of $0.82 million in the operation of our five residential properties, compared to $0.70 million in the operation of our four residential properties during the three months ended March 31, 2025, The slight increase in the operating expenses was mainly due to the completion of the Aurora at Green Valley in July 2025, which consists of three residential buildings and a clubhouse.

*Depreciation and amortization:*

During the three months ended March 31, 2026, we recorded depreciation and amortization of $0.80 million attributable to the depreciation and amortization of real estate and intangible assets of our five residential properties, compared to $0.74 million on our four residential properties during the three months ended March 31, 2025. The slight increase in total depreciation and amortization of $0.06 million was mainly due to the completion of the Aurora at Green Valley in July 2025, which consists of three residential buildings and a clubhouse.

*Interest expense:*

During the three months ended March 31, 2026, we recorded $0.82 million of interest expense related to mortgage notes payable associated with the Company's five residential properties and debt on the Campus Lane Land. During the three months ended March 31, 2025, we recorded $1.29 million of interest expense related to mortgage notes payable associated with the Company's four residential properties and debt on the Campus Lane Land.

The decrease of $0.47 million was primarily due to the lower interest expense resulting from the refinancing of Hollywood Apartments in March 2025. The decrease was partially offset by MRC Aurora recognizing interest and loan fee amortization beginning after completion of construction in September 2025, amounting to $0.34 million.

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<u>Corporate and Other</u>

*The corporate and other operations during the three months ended March 2026 and 2025 are as follows:*

*Investment income:*

Investment income is made up of dividends, distributions from operations, distributions from sales/capital transactions, interest, and other investment income. Total investment income during the three months ended March 31, 2026, and 2025, were $0.07 million and $0.01 million, respectively. During the three months ended March 31, 2026, and March 31, 2025, we received minimal distributions from operations, sales, and liquidations. During the three months ended March 31, 2026, we received dividends, interest, and other investment income of $0.07 million as compared to $0.01 million received during the three months ended March 31, 2025. The increase was mainly due to the increase in our investment portfolio since March 31, 2025. The remaining increase was due to the interest income on the note receivable from the non-controlling interest holder of PT Hillview, True USA.

*Unallocated corporate expenses:*

Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include asset management and incentive management fees, administrative costs and transfer agent reimbursements, and other corporate operating expenses.

Our asset management and incentive management fees are based on the advisory agreements that were effective January 1, 2021, and subsequently amended effective January 1, 2026.

*Asset management fee:*

The asset management fees for the three months ended March 31, 2026, and 2025, were $0.80 million and $0.86 million, respectively. The slight decrease was due to the lower rate under the amended Advisory Management Agreement, which provides for a base management fee of 1.25% per annum of gross assets under management (excluding depreciation and amortization), compared to the prior agreement based on invested capital (3% of the first $20 million, 2% of the next $80 million, and 1.50% over $100 million).

*Bonus management fee:*

Under the Advisory Management Agreement, we pay a bonus management fee equal to 5% of adjusted funds from operations each quarter. We did not incur any bonus management fees for the three months ended March 31, 2026, and 2025.

*Administrative cost and transfer agent reimbursements:*

Costs reimbursed to MacKenzie for the three months ended March 31, 2026 were $0.22 million as compared to $0.17 million for the three months ended March 31, 2025. The increase was due to an increase in the allocable portion of overhead and other expenses incurred by MacKenzie in comparison to March 31, 2025, as a result of the increase in the number of real estate assets owned by us since March 31, 2025.

During the three months ended March 31, 2026, no transfer agent cost reimbursements were paid to MacKenzie. During the three months ended March 31, 2025, there were minimal transfer agent cost reimbursements paid to MacKenzie.

*Interest expense:*

During the three months ended March 31, 2026, we recorded $0.41 million of interest expense related to the Company's line of credit agreement and note purchase agreement, compared to $0.10 million during the three months ended March 31, 2025.

The increase was attributable to additional borrowings by the Parent Company under a new line of credit with PRES and promissory notes issued to Streeterville Capital, LLC.

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*Other corporate operating expenses:*

Other corporate operating expenses include professional fees, directors' fees, printing and mailing expense, and other general and administrative expenses. Other operating expenses for the three months ended March 31, 2026 and 2025, were $0.41 million and $1.89 million, respectively. The decrease in other operating expenses was mainly due to the decrease in transfer agent fees since March 31, 2025.

*Net realized gain (loss) on sale of investments:*

During the three months ended March 31, 2026, we recorded a net realized gain of $0.62 million as compared to $0.02 million net realized gain during the three months ended March 31, 2025. Total net realized gain for the three months ended March 31, 2026, was realized from the sale of two publicly traded REIT securities and two non-traded REIT security. Total net realized gain for the three months ended March 31, 2025, was realized from the sale of one non-traded REIT security and one limited partnership interest.

*Net unrealized gain (loss) on investments:*

During the three months ended March 31, 2026, we recorded a net unrealized gain of $0.84 million, which was net of $0.01 million of unrealized gain reclassification adjustment. The reclassification adjustments are the accumulated unrealized gains or losses as of the end of the prior period that are realized during the current period. Accordingly, the net unrealized gains excluding the reclassification adjustment for the three months ended March 31, 2026, were $0.84 million, which resulted from fair value appreciations of $0.45 million from general partnership interests, $0.02 million from limited partnership interests and $0.37 million from non-traded REIT securities.

During the three months ended March 31, 2025, we recorded a net unrealized loss of $0.27 million, which was net of $0.02 million of unrealized gain reclassification adjustment. The reclassification adjustments are the accumulated unrealized gains or losses as of the end of the prior period that are realized during the current period. Accordingly, the net unrealized losses excluding the reclassification adjustment for the three months ended March 31, 2025, were $0.27 million, which resulted from fair value depreciations of $0.24 million from general partnership interests, $0.06 million from limited partnership interests and fair value appreciations of $0.03 million from non-traded REIT securities.

*Income tax provision (benefit):*

The Parent Company has elected to be treated as a REIT for tax purposes under the Code and as a REIT, is not subject to federal income taxes on amounts that it distributes to the stockholders, provided that, on an annual basis, it generally distributes at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meet certain other conditions. To the extent it satisfies the annual distribution requirement but distribute less than 100% of its REIT taxable income, it will be subject to U.S. federal corporate income tax on their undistributed taxable income. In addition, it will be subject to a 4% nondeductible excise tax if the actual amount that it pays to its stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

The Parent Company satisfied the annual dividend payment and other REIT requirements for the tax year ended December 31, 2025. Therefore, it did not incur any tax expense or excise tax on its income from operations during the quarterly periods within the tax year 2025. In addition, for the tax year 2026, the Parent Company intends to pay the requisite amounts of dividends during the year and meet other REIT requirements such that the Parent Company will not owe any income taxes. Therefore, the Parent Company did not record any income tax provisions during any fiscal periods within the tax year 2026.

MacKenzie NY 2 is subject to corporate federal and state income tax on their taxable income at regular statutory rates. As of March 31, 2026, it did not have any taxable income for tax year 2025 and 2026. Therefore, we did not record any tax provisions during any fiscal periods within the tax year 2025 and 2026. MacKenzie Satellite, MRC QRS and MAC are qualified REIT subsidiaries of the Parent Company. Therefore, they do not file a separate tax return.

The Operating Partnership is a limited partnership. 220 Campus Lane, GVEC and Innovate Napa are limited liability companies. First & Main, 1300 Main, Woodland Corporate Center Two, Main Street West, One Harbor Center, LP and Green Valley Medical Center, LP are limited partnerships. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

MAC OP is a limited partnership. Hollywood Hillview, MacKenzie Shoreline, Madison, PVT, Campus Lane Residential and MRC Aurora are limited liability companies. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

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#### Comparison of the nine months ended March 31, 2026 and 2025

#### Commercial Properties
*The commercial properties owned by us during the nine months ended March 2026 and 2025 are as follows:*

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| | |
|:---|:---|
| **Nine Months Ended March 31,** | **Nine Months Ended March 31,** |
| **2026** | **2025** |
| Satellite Place Office Building | Satellite Place Office Building |
| First & Main Office Building | First & Main Office Building |
| 1300 Main Office Building | 1300 Main Office Building |
| Main Street West Office Building | Main Street West Office Building |
| Woodland Corporate Center | Woodland Corporate Center |
| 220 Campus Lane Office Building | 220 Campus Lane Office Building |
| Green Valley Executive Center | Green Valley Executive Center |
| One Harbor Center | One Harbor Center |
| Green Valley Medical Center | Green Valley Medical Center |

---

*Rental, reimbursements and other property income:*

During the nine months ended March 31, 2026, we generated $9.56 million in rental and reimbursements revenues from our nine commercial properties, compared to $12.84 million generated from our nine commercial properties during the nine months ended March 31, 2025. The decrease in rental revenues was primarily attributable to early lease termination income recognized during the 2025 period related to one tenant at our Satellite Place Office Building in December 2024 and another tenant at our Main Street West property in February 2025.

*Expenses:*

*Property operating and maintenance expenses:*

During the nine months ended March 31, 2026, we incurred operating and maintenance expenses of $3.70 million in the operation of our nine commercial properties, compared to $3.46 million during the nine months ended March 31, 2025. The increase in the operating expenses was mainly due to higher real estate taxes at our Satellite Place Office Building.

*Depreciation and amortization:*

During the nine months ended March 31, 2026, we recorded depreciation and amortization of $4.72 million attributable to the depreciation and amortization of real estate and intangible assets of our nine commercial properties, compared to $5.45 million during the nine months ended March 31, 2025. The decrease in total depreciation and amortization of $0.73 million was mainly due to the impairment of assets related to our Main Street West Office Building and the write-off of tenant improvements, leasehold improvements, lease commissions, and in-place lease related to our Satellite Place Office Building due to an early lease termination of its anchor tenant in December 2024.

*Interest expense:*

During the nine months ended March 31, 2026, we recorded $3.57 million of interest expense related to mortgage notes payable associated with the Company's nine commercial properties, compared to $3.80 million during the nine months ended March 31, 2025.

The decrease of $0.23 million was primarily due to the lower interest expense resulting from Main Street West loan refinancing in May 2025. The decrease was partially offset by higher interest expense resulting from the First & Main loan extension in March 2026.

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#### Residential Properties
*The residential properties owned by us during the nine months ended December 2025 and 2025 are as follows:*

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| | |
|:---|:---|
| **Nine Months Ended March 31,** | **Nine Months Ended March 31,** |
| **2026** | **2025** |
| Commodore Apartments | Commodore Apartments |
| The Park View Apartments | The Park View Apartments |
| Hollywood Apartments | Hollywood Apartments |
| Shoreline Apartments | Shoreline Apartments |
| Aurora at Green Valley |  |

---

*Rental, reimbursements and other property income:*

During the nine months ended March 31, 2026, we generated $5.01 million in rental and reimbursements revenues from our five residential properties, compared to $4.42 million from our four residential properties during the nine months ended March 31, 2025. The increase was mainly due to the to the completion of the Aurora at Green Valley in July 2025, with leasing commencing in August 2025.

*Expenses:*

*Property operating and maintenance expenses:*

During the nine months ended March 31, 2026, we incurred operating and maintenance expenses of $2.37 in the operation of our five residential properties, compared to $2.02 million in the operation of our four residential properties during the nine months ended March 31, 2025. The increase was mainly due to the completion of Aurora at Green Valley in July 2025, which consists of three residential buildings and a clubhouse.

*Depreciation and amortization:*

During the nine months ended March 31, 2026, we recorded depreciation and amortization of $2.26 million attributable to the depreciation and amortization of real estate and intangible assets of our five residential properties, compared to $1.64 million attributable to our four residential properties during the nine months ended March 31, 2025. The increase of $0.62 million was mainly due to the completion of Aurora at Green Valley in July 2025, which consists of three residential buildings and a clubhouse.

*Interest expense:*

During the nine months ended March 31, 2026, we recorded $2.43 million related to mortgage notes payable associated with the Company's five residential properties and debt on the Campus Lane Land, compared to $2.62 million related to the Company's four residential properties and debt on the Campus Lane Land during the nine months ended March 31, 2025.

The slight decrease of $0.19 million was primarily due to the lower interest expense resulting from the refinancing of Hollywood Apartments in March 2025. The decrease was partially offset by MRC Aurora recognizing interest and loan fee amortization beginning after completion of construction in September 2025, amounting to $0.95 million.

#### Corporate and Other
*The corporate and other operations during the nine months ended March 2026 and 2025 are as follows:*

*Investment income:*

Total investment income during the nine months ended March 31, 2026, and 2025, were $0.19 million and $0.05 million, respectively. During the nine months ended March 31, 2026, and March 31, 2025, we received minimal distributions from operations, sales, and liquidations. During the nine months ended March 31, 2026, we received dividends, interest, and other investment income of $0.18 million as compared to $0.05 million received during the nine months ended March 31, 2025. The increase was mainly due to the increase in our investment portfolio since March 31, 2025. The remaining increase was due to the interest income from the note receivable from the non-controlling interest holder of PT Hillview, True USA.

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*Unallocated corporate expenses:*

*Asset management fee:*

The asset management fees for the nine months ended March 31, 2026, and 2025, were $2.58 million and $2.57 million, respectively. There was a slight increase in asset management fees due to a higher level of invested capital under the prior Advisory Management Agreement, which increased from $182.66 million as of December 31, 2024 to $191.41 million as of December 31, 2025, offset by the slight decrease due to the lower rate under the amended Advisory Management Agreement, which provides for a base management fee of 1.25% per annum of gross assets under management (excluding depreciation and amortization), compared to the prior agreement based on invested capital (3% of the first $20 million, 2% of the next $80 million, and 1.50% over $100 million).

*Incentive or bonus management fee:*

Under the Advisory Management Agreement, we previously paid an incentive management fee that was equal to 15% of all distributions once shareholders have received cumulative distributions equal to 6% from the effective date of the Advisory Management Agreement, and we currently pay a bonus management fee equal to 5% of adjusted funds from operations each quarter. We did not incur any incentive or bonus management fee for the nine months ended March 31, 2026, and 2025.

*Administrative cost and transfer agent reimbursements:*

Costs reimbursed to MacKenzie for the nine months ended March 31, 2026 were $0.66 million as compared to $0.50 million for the nine months ended March 31, 2025. The increase was due to an increase in the allocable portion of overhead and other expenses incurred by MacKenzie in comparison to March 31, 2025, as a result of the increase in the number of real estate assets owned by us since March 31, 2025.

During the nine months ended March 31, 2026, no transfer agent cost reimbursements were paid to MacKenzie. During the nine months ended March 31, 2025, there were minimal transfer agent cost reimbursements paid to MacKenzie.

*Interest expense:*

During the nine months ended March 31, 2026, we recorded $1.15 million of interest expense related to the Company's line of credit agreement and note purchase agreement, compared to $0.10 million during the nine months ended March 31, 2025.

The increase was attributable to additional borrowings by the Parent Company under a new line of credit with PRES and promissory notes issued to Streeterville Capital, LLC.

*Other corporate operating expenses:*

Other corporate operating expenses include professional fees, directors' fees, printing and mailing expense, and other general and administrative expenses. Other operating expenses for the nine months ended March 31, 2026 and 2025, were $1.82 million and $3.41 million, respectively. The decrease in other operating expenses was mainly due to the decrease in transfer agent fees since March 31, 2025.

*Net realized gain (loss) on sale of investments:*

During the nine months ended March 31, 2026, we recorded a minimal net realized loss as compared to $0.23 million net realized gain during the nine months ended March 31, 2025. Total net realized loss for the nine months ended March 31, 2026, was realized from the sale of sale of four publicly traded REIT securities and five non-traded REIT securities. Total realized gain for nine months ended March 31, 2025, was realized from the sale of two non-traded REIT securities and one limited partnership interest.

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*Net unrealized gain (loss) on investments:*

During the nine months ended March 31, 2026, we recorded a net unrealized gain of $2.01 million, which was net of $1.33 million of unrealized loss reclassification adjustment. The reclassification adjustments are the accumulated unrealized gains or losses as of the end of the prior period that are realized during the current period. Accordingly, the net unrealized gain excluding the reclassification adjustment for the nine months ended March 31, 2026, were $0.68 million, which resulted from fair value appreciations of $0.36 million from general partnership interests, $0.32 million from non-traded REIT securities, a minimal amount from publicly traded REIT securities, and a minimal amount of fair value appreciations from limited partnership interests.

During the nine months ended March 31, 2025, we recorded a net unrealized loss of $0.41 million, which was net of $0.16 million of unrealized gain reclassification adjustment. The reclassification adjustments are the accumulated unrealized gains or losses as of the end of the prior period that are realized during the current period. Accordingly, the net unrealized losses excluding the reclassification adjustment for the nine months ended March 31, 2025, were $0.25 million, which resulted from fair value depreciations of $0.35 million from general partnership interests, $0.05 million from limited partnership interests and fair value appreciations of $0.15 million from non-traded REIT securities.

*Income tax provision (benefit):*

Income tax provision for nine months ended March 31, 2026 and 2025 are discussed above under the three months ended section.

#### Liquidity and Capital Resources
*Capital Resources:*

We offered to sell up to 5 million shares of common stock in our first public offering and up to 15 million shares of common stock in each of our second and third public offerings. We have raised total gross proceeds of $119.10 million from the issuance of common stock under the public offerings, $42.46 million from our first public offering, which concluded in October 2016, $67.99 million from the second public offering, which concluded in October 2019, and $8.65 million from our third public offering, which concluded in October 2020. In addition, we have raised $15.56 million from the issuance of shares of common stock under the common stock DRIP as of March 31, 2026. Out of the total proceeds from DRIPs, we have utilized a total of $14.28 million to repurchase shares of common stock under the share repurchase program. We have raised $19.58 million through the sale of our Series A preferred stock, $3.64 million Series B preferred stock and $1.32 million Series C preferred stock pursuant to a Regulation A offering as of March 31, 2026. In addition, we have raised $0.61 million from the issuance of shares of Series A, Series B and Series C preferred stock under the preferred stock DRIP. In January 2025, the Offering Circular was qualified by the SEC for the sale of 1,286,638.62 shares of Series A and 1,267,216.17 shares of Series B preferred stock. The Offering Circular was amended in June 2025 to offer up to 647,991 shares of Series A Preferred Stock, 1,166,383 shares of Series B Preferred Stock, and 1,166,383 shares of Series C Preferred Stock. Of these amounts, 150,000 shares of each are reserved for the preferred stock DRIP. On January 15, 2025, our shelf registration statement on Form S-3 for the sale of up to $75 million in common stock, preferred stock, warrants, and units was declared effective by the SEC, and we entered into an equity distribution agreement with Maxim to issue and sell our common stock for an aggregate gross sales price of $20 million pursuant to the at-the-market offering described in the ATM Prospectus, subject to maintaining compliance with General Instruction I.B.6 of Form S-3. As of March 31, 2026, under the ATM offering, we sold 134,021.30 shares with gross proceeds of approximately $1.80 million. In addition, on February 28, 2025, the Company offered and sold 153,403.40 shares of the Company's common stock, pre-funded warrants to purchase up to 129,226.50 shares of common stock and warrants to purchase up to an aggregate of 423,944.85 shares of common stock. The gross proceeds to the Company from this transaction were approximately $4.80 million before deducting the placement agent's fees and other offering expenses payable by the Company. In July and August 2025, 129,226.50 common shares were issued upon exercise of all of the pre-funded warrants. All share amounts are presented after giving effect to the Reverse Stock Split.

We plan to fund future investments with the net proceeds raised from our preferred equity offering and any future offerings of securities and cash flows from operations, as well as interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less. However, we have not raised as much from our preferred equity offering in the past fiscal year as we did in previous years, at least in part due to rising interest rates making the preferred return less attractive. Thus, there is no guarantee that we can raise sufficient funds to meet our goals in terms of growth, strategic or necessary loan rebalancing, and additional investments. We also may fund a portion of our investments through borrowings from banks and issuances of senior securities. We also may borrow money within the underlying companies in which we have majority ownership.

We intend to utilize leverage to enhance the total returns of our portfolio. Historically, we were only able to access leverage at attractive costs through a credit facility, but the termination of our BDC status effective December 31, 2020 provided us with greater flexibility in choosing among different alternatives for raising capital through debt, equity participation features (such as warrants and convertible notes) and/or additional classes of stock (such as preferred) in order to facilitate capital formation.

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Our aggregate borrowings (if any), secured and unsecured, are expected to be reasonable in relation to our net assets and will be reviewed by the Board of Directors at least quarterly.

We used the funds raised from our public offerings to invest in portfolio companies and to pay operating expenses.

We finished the nine months ended March 31, 2026, with cash and cash equivalents, and restricted cash of approximately $4.45 million. Our principal demands for cash are to fund operating and administrative expenses, debt service obligations, and dividends on our common and Series A, B and C preferred stock. In addition, we may also use cash to purchase additional properties. We expect to fund our material cash requirements over the next year through a combination of cash on hand, net cash provided by our property operations, new capital raised from our Series A, B and C preferred stock, and new borrowings at the underlying companies.

*Cash Flows:*

*Nine months ended March 31, 2026:*

For the nine months ended March 31, 2026, we experienced a net increase in cash of $0.33 million. During this period, we used net cash of $2.76 million in our operating activities and $8.25 million in our investing activities and generated net cash of $11.34 million in our financing activities.

The net cash outflow of $2.76 million from operating activities resulted from $16.92 million used in operating expenses, offset by cash inflow of $13.97 million of rental revenues and $0.19 million of investment income.

The net cash outflow of $8.25 million from investing activities resulted from $8.22 million of real estate acquisitions through our subsidiaries and $3.64 million purchases of equity investments, offset by cash inflow of $3.61 million from sale of investments.

The net cash inflow of $11.34 million from financing activities resulted from $10.35 million of additional mortgage borrowings, $3.42 million of additional notes payable, $1.32 million of issuance of Series C preferred stock, $0.84 million from issuance of Series A preferred stock, $0.41 million proceeds from borrowings under the affiliated party line of credit, $0.33 million from issuance of Series B preferred stock, $0.32 million from issuance of common stock and $0.12 million change in capital pending acceptance, offset by cash outflows of $1.82 million payment on existing notes, $1.15 million capital distributions to non-controlling interests holders, $1.00 million payments on existing mortgage notes payables, $0.71 million payment of dividends to Series A preferred stockholders, $0.46 million payment of financing fees, $0.35 million payment of selling commissions and fees, $0.20 million repayment of finance lease liabilities, $0.05 million payment of dividends to Series B preferred stockholders, and $0.03 million payment of dividends to Series C preferred stockholders.

*Nine months ended March 31, 2025:*

For the nine months ended March 31, 2025, we experienced a net decrease in cash of $7.62 million. During this period, we used net cash of $0.05 million in our operating activities, used net cash of $14.27 million in our investing activities and generated net cash of $6.70 million in our financing activities.

The net cash outflow of $0.05 million from operating activities resulted from $16.74 million used in operating expenses, offset by cash inflow of $16.64 million of rental revenues and $0.05 million of investment income.

The net cash outflow of $14.27 million from investing activities resulted from $14.87 million of real estate acquisitions through our subsidiaries, and $0.23 million purchases of equity investments, offset by cash inflow of $0.83 million from sale of investments.

The net cash inflow of $6.70 million from financing activities resulted from $35.33 million of additional mortgage borrowings, $8.16 million proceeds from borrowings under line of credit, $3.79 million of issuance of common stock, $2.59 million of capital contributions by non-controlling interests holders, $1.94 million of issuance of pre-funded warrants, $1.46 million of issuance of Series B preferred stock, $0.47 million change in capital pending acceptance, $0.38 million of issuance of Series A common stock warrants, $0.23 million of issuance of Series A preferred stock and $0.22 million of issuance of Series B common stock warrants, offset by cash outflows of $38.15 million payment on existing mortgage notes payables, $4.02 million payment of dividends to common stockholders, $1.85 million payment of financing fees, $1.60 million payment of selling commissions and fees, $1.10 million capital distributions to non-controlling interests holders, $0.72 million payment of dividends to Series A preferred stockholders, $0.22 million payment on existing notes payables, $0.17 million repayment of finance lease liabilities, $0.03 million payment of dividends to Series B preferred stockholders and $0.01 million redemption of Series A preferred stock.

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#### Material Cash Obligations
We have entered into two contracts under which we have material future commitments: (i) the Advisory Management Agreement and the Amended and Restated Investment Advisory Agreement, under which the Advisers serves as our advisers, and (ii) the Administration Agreement, under which MacKenzie furnishes us with certain non-investment management services and administrative services necessary to conduct our day-to-day operations. Each of these agreements is terminable by either party upon proper notice. Payments under the Advisory Management Agreement, as amended effective January 1, 2026, will be (i) a base management fee equal to 1.25% per annum of gross assets under management (excluding depreciation and amortization), paid monthly, and (ii) a bonus management fee equal to 5% of adjusted funds from operations each quarter. The bonus management fee replaces any incentive fee, acquisition fee, financing fee, or disposition fee that was payable under the prior agreement. Payments under the Administration Agreement will occur on an ongoing basis as expenses are incurred on our behalf by MacKenzie. However, if MacKenzie withdraws as our administrator, it will be liable for any expenses we incur as a result of such withdrawal. For additional information concerning the terms of these agreements and related fees paid, see Note 8 in the consolidated financial statements included in this report.

#### Borrowings
On January 22, 2025, we entered into a revolving line of credit agreement with PRES, an affiliate of the Adviser, of up to $10,000,000. Interest will accrue on any unpaid principal balance on the note at a fixed annual interest rate of 10%. In addition, an origination fee of 2% will be charged on each advance and the sum will be added to the principal balance. The original maturity date of the loan was June 1, 2026. On September 24, 2025, the maturity date was extended to December 31, 2027. The loan requires monthly interest beginning on March 1, 2025, with the remaining principal balance due at maturity. As of March 31, 2026, the Company has borrowed $10 million in entirety, which includes $196,078 of loan origination fees, under the line of credit.

We used the proceeds from this credit facility on a short-term basis to bridge the gap between our asset acquisition expenditures and debt refinancing. We expect to be subject to various customary covenants and restrictions on our operations, such as covenants which would (i) require us to maintain certain financial ratios, including asset coverage, debt to equity and interest coverage, and a minimum net worth, and/or (ii) restrict our ability to incur liens, additional debt, merge or sell assets, make certain investments and/or distributions or engage in transactions with affiliates. We also borrow money within the underlying companies in which we have majority ownership.

The below table presents the total loans outstanding at the underlying companies as of March 31, 2026 and the fiscal years those loans mature:

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| | |
|:---|:---|
| **Fiscal Year Ending June 30, :** | **Principal** |
| 2026 (remainder) | $10745004 |
| 2027 | 30966138 |
| 2028 | 29213495 |
| 2029 | 4812054 |
| 2030 | 27499016 |
| Thereafter | 43467966 |
| **Total** | $146703673 |

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#### Distributions to Stockholders
We pay quarterly distributions to stockholders to the extent that we have income from operations available. Our quarterly distributions, if any, will be determined by our Board of Directors after a review and distributed pro-rata to holders of our shares; we declare distributions on a monthly basis, but pay each quarter. Any distributions to our stockholders will be declared out of assets legally available for distribution. In no event are we permitted to borrow money to make distributions if the amount of such distributions would exceed our annual accrued and received revenues, less operating costs. Distributions in kind are not permitted, except as provided in our charter.

We have elected to be treated as a REIT under the Code. As a REIT, we are not subject to federal income taxes on amounts that we distribute to the stockholders, provided that, on an annual basis, we generally distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meet certain other conditions. To the extent that we satisfy the annual distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed REIT taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

We have DRIPs that provide for reinvestment of our dividends and other distributions on behalf of stockholders for any individual stockholder who elects to participate in the DRIPs, provided that the applicable DRIP is permitted by the state in which the stockholders reside. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions. On March 4, 2024, the Board of Directors suspended the common stock share repurchase program and common stock DRIP in connection with trading of its common stock on the OTCQX Best Market. When our common stock became eligible for trading on OTC Markets in April 2024, the share repurchase program automatically terminated, and the Board of Directors will decide whether, and when, to reinstate the common stock DRIP.

During the nine months ended March 31, 2026, the Board of Directors approved the following quarterly dividends:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Dividends** | **Dividends** | **Dividends** | **Dividends** | **Dividends** | **Dividends** |
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** |
| **<u>During the Quarter Ended</u>** | **Per Share** | **Amount** | **Per Share** | **Amount** | **Per Share** | **Amount** |
| September 30, 2025 | $0.375 | $285758 | $0.750 | $88878 | $0.563 | $6465 |
| December 31, 2025 | 0.375 | 280892 | 0.938 | 90198 | 0.563 | 18915 |
| March 31, 2026 | 0.375 | 276780 | 0.750 | 92230 | 0.563 | 27189 |
|  | $1.125 | $843430 | $2.438 | $271306<br> \* | $1.688 | $52569 |

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\*Of the total dividends declared for Series B during the three months ended March 31, 2026, $203,479 was an increase in liquidation preference and $67,827 was the cash dividend.

On May 19, 2025, following a review of the Company's financials, the current economic climate, the potential impact of new tariffs on demand for office and retail space, and the increased likelihood of a near-term recession, the Board of Directors approved the suspension of the regular quarterly dividend on the Company's common stock effective immediately. This decision was made to preserve liquidity, enable the Company to make further investments in its own properties and developments where prudent, and to provide financial flexibility as to near-term commitments; the suspension will remain in effect until further notice. The Board of Directors will continue to evaluate the dividend policy quarterly based on the Company's financial performance, liquidity needs, and market conditions.

#### Critical Accounting Estimates
Our consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting estimates, are disclosed in our annual report on Form 10-K for the year ended June 30, 2025. We have not made any material changes to our critical accounting policies and estimates during the period covered by this report.

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**Item 3.** **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**<br>

Our portfolio primarily consists of equity and debt investments in smaller U.S. companies that primarily own commercial real estate that are either illiquid or not listed on any exchange, and our investments are considered speculative in nature. As a result, we are subject to risk of loss which may prevent our stockholders from achieving price appreciation, dividend distributions and a return of their capital.

At March 31, 2026, financial instruments that subjected us to concentrations of market risk consisted principally of equity investments, which represented approximately 2.49% of our total assets as of that date. As discussed in Note 4 to our consolidated financial statements, these investments primarily consist of securities in companies with no readily determinable market values and as such are valued in accordance with our fair value policies and procedures. Our investment portfolio sometimes also includes shares of publicly traded REITs, which are valued at recently quoted trading prices. Our investment strategy represents a high degree of business and financial risk due primarily to the general illiquidity of our investments. We may make short-term investments in cash equivalents, U.S. government securities and other high-quality investments that mature in one year or less, pending investments in portfolio companies made according to our principal investment strategy.

In addition, we are exposed to interest rate risk with respect to our variable-rate indebtedness; generally, an increase in interest rates would directly result in higher interest expense. We seek to manage our exposure to interest rate risk by utilizing a mix of fixed and floating rate financing, and through interest rate hedging agreements to fix or cap our variable-rate debt. As of March 31, 2026, $17.65 million, $26.31 million and $15.13 million of our total outstanding loan balance was under variable-rate debt indexed to the Secured Overnight Financing Rate ("SOFR"), Prime rate, and U.S. Treasury yield, respectively. For the Prime rate, a hypothetical increase or decrease of 100 basis points would result in a corresponding increase or decrease in our annual interest expense of approximately $0.26 million. As of March 31, 2026, the applicable variable rates were 6.75% to 7.25% for the Prime rate, 3.70% for SOFR, and 3.68% for the U.S. Treasury yield.

Variable interest under the U.S. Treasury-indexed and SOFR loans are not yet applicable as of March 31, 2026. These payments are scheduled to commence on May 1, 2026, and May 1, 2027, respectively.

**Item 4.** **CONTROLS AND PROCEDURES**<br>

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of the end of the period covered by this report as required by paragraph (b) of Rule 13a-15 or 15d-15 of the Exchange Act. Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date and provided reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting (identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act) during the fiscal quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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#### PART II. OTHER INFORMATION
**Item 1.** **LEGAL PROCEEDINGS**<br>

None.

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| | |
|:---|:---|
| **Item 1A.** | **RISK FACTORS** |

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There have been no material changes to our risk factors discussed in "Risk Factors" in our annual report Form 10-K for the year ended June 30, 2025.

**Item 2.** **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**<br>

During the nine months ended March 31, 2026, we issued 37,374.89 shares of Series A preferred stock with total gross proceeds of $840,935, 13,440.15 shares of Series B preferred stock with total gross proceeds of $329,411 and 52,640 shares of Series C preferred stock with total gross proceeds of $1,316,000. We also issued 6,409.45 shares of Series A preferred stock with total gross proceeds of $144,214 under the preferred stock DRIP, 878.30 shares of Series B preferred stock with total gross proceeds of $19,761 under the preferred stock DRIP, and 16.67 shares of Series C preferred stock with total gross proceeds of $375 under the preferred stock DRIP. All such issuances were pursuant to our Regulation A Series A, Series B and Series C preferred stock offering. In connection with the Regulation A preferred stock issuances described above, we paid broker-dealer fees of $242,572. The securities were sold to members of the general public who invested through our Regulation A offering.

#### Issuer Purchases of Equity Securities
None.

**Item 3.** **DEFAULTS UPON SENIOR SECURITIES**<br>

None.

**Item 4.** **MINE SAFETY DISCLOSURES**<br>

Not applicable.

**Item 5.** **OTHER INFORMATION**<br>

During the quarterly period ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K under the Act).

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|:---|:---|
| **Item 6.** | **EXHIBITS** |

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| | |
|:---|:---|
| **Exhibit** | **Description** |
| [2.1\*](ef20070433_ex2-1.htm) | Contribution Agreement by and between MacKenzie Realty Capital, Inc., MacKenzie Realty Operating Partnership, LP and MacKenzie Apartment Communities, Inc., dated January 1, 2026 |
| [10.1](https://www.sec.gov/Archives/edgar/data/1550913/000155091325000170/exhibit1022.htm) | Advisory Management Agreement with MacKenzie Real Estate Advisers, LP (incorporated by reference to Exhibit 10.22 of the Company's Form 8-K, filed on December 30, 2025) |
| [10.2](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000008/exhibit102.htm) | Secured Promissory Note #3 dated January 15, 2026 issued by the Company in favor of Streeterville Capital, LLC (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K, filed on January 21, 2026) |
| [10.3](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000004/exhibit11.htm) | Amendment to the Equity Distribution Agreement, dated January 7, 2026, by and between MacKenzie Realty Capital, Inc. and Maxim Group LLC (incorporated by reference to Exhibit 1.1 of the Company's Form 8-K, filed on January 14, 2026) |
| [10.4\*](ef20070433_ex10-4.htm) | Agreement of Limited Partnership of MAC Operating Partnership, LP, dated March 4, 2026 |
| [10.5](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000010/exhibit101.htm) | Note Purchase Agreement dated March 6, 2026 by and between the Company and Streeterville Capital, LLC (incorporated by reference to the Company's Form 8-K, filed on March 6, 2026) |
| [10.6](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000010/exhibit102.htm) | Secured Promissory Note dated March 6, 2026 issued by the Company in favor of Streeterville Capital, LLC (incorporated by reference to the Company's Form 8-K, filed on March 6, 2026) |
| [10.7](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000010/exhibit103.htm) | Security Agreement dated March 6, 2026 by MRC QRS, Inc. in favor of Streeterville Capital, LLC (incorporated by reference to the Company's Form 8-K, filed on March 6, 2026) |
| [10.8](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000010/exhibit104.htm) | Guaranty dated March 6, 2026 by MRC QRS, Inc. for the benefit of Streeterville Capital, LLC (incorporated by reference to the Company's Form 8-K, filed on March 6, 2026) |
| [10.9](https://www.sec.gov/Archives/edgar/data/1550913/000155091326000010/exhibit105.htm) | Stock Pledge Agreement dated March 6, 2026 by and between the Company and Streeterville Capital, LLC (incorporated by reference to the Company's Form 8-K, filed on March 6, 2026) |
| [31.1\*](ef20070433_ex31-1.htm) | Section 302 Certification of Robert Dixon (President and Chief Executive Officer) |
| [31.2\*](ef20070433_ex31-2.htm) | Section 302 Certification of Angche Sherpa (Treasurer and Chief Financial Officer) |
| [32.1\*](ef20070433_ex32-1.htm) | Section 1350 Certification of Robert Dixon (President and Chief Executive Officer) |
| [32.2\*](ef20070433_ex32-2.htm) | Section 1350 Certification of Angche Sherpa (Treasurer and Chief Financial Officer) |
| 101.INS\* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Documents. |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104\* | Cover Page Interactive Data File (formatted as inline XBRL and contained Exhibit 101). |

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\* Filed herewith.

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**SIGNATURES** Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
| **MACKENZIE REALTY CAPITAL, INC.** | **MACKENZIE REALTY CAPITAL, INC.** | **MACKENZIE REALTY CAPITAL, INC.** |
| Date: May 15, 2026 | By:  | /s/ Robert Dixon |
|  | President and Chief Executive Officer | President and Chief Executive Officer |
| Date: May 15, 2026 | By:  | /s/ Angche Sherpa |
|  | Treasurer and Chief Financial Officer | Treasurer and Chief Financial Officer |

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## Exhibit 2.1

------

#### Exhibit 2.1

#### CONTRIBUTION AGREEMENT
This Contribution Agreement (this "Agreement") is by and between MacKenzie Realty Capital, Inc., a Maryland corporation ("MRC"), MacKenzie Realty Operating Partnership, LP ("MROP") and MacKenzie Apartment Communities, Inc. ("MAC") effective as of this 1st day of January 2026.

#### BACKGROUND
MRC has been formed to qualify as a real estate investment trust, and to invest its funds in investments permitted by the terms of MRC's Articles of Incorporation and Sections 856 through 860 of the Internal Revenue Code. It owns various multi-family real estate assets through MROP and the subsidiaries listed on Schedule 1 hereto (the "Contributed Assets") that it wishes to contribute to MAC in exchange for 1,906,580 shares of MAC ("Shares").

MAC wishes to accept the contribution of the Contributed Assets from MRC in exchange for Shares. Therefore, the parties agree as follows:

#### AGREEMENT
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **DEFINITIONS** 

**"Closing Date"** means January 1, 2026.

"**Contributed Assets**" has the meaning set forth in the Background section of this Agreement.

"**Shares**" shall have the meaning set forth in the Background section of this Agreement.

 **"Governing Documents"** means the Articles of Incorporation and Bylaws of MRC and MAC.

"**Governmental Authority**" shall mean any public body, governmental, administrative or regulatory authority, agency, instrumentality or commission, including courts of competent jurisdiction and arbitral tribunals, whether federal, state, local or foreign.

"**Laws**" shall mean any statutes, ordinances, rules, regulations, orders or other laws of any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **CONTRIBUTION OF THE CONTRIBUTED ASSETS** 

Subject to the terms and conditions set forth herein, on the Closing Date, MRC and MROP shall contribute, assign, transfer, convey and deliver to MAC and MAC shall assume, receive and accept from MRC and MROP all of MRC's and MROP's right, title and interest in and to the Contributed Assets, free and clear of any encumbrances on such equity interests, including all books and records held by MRC and MROP and relating to the Contributed Assets and all rights, privileges, claims, causes of action and options relating or pertaining to the Contributed Assets.

CONTRIBUTION AGREEMENT <br>1

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **CONSIDERATION FOR THE CONTRIBUTED ASSETS** 

In consideration for the contribution of the Contributed Assets by MRC and MROP to MAC, MAC shall, contemporaneously with the contribution, issue to MRC 1,906,580 Shares, to be governed by the Governing Documents of MAC. MRC acknowledges that the number of Shares issuable pursuant to this Agreement has been determined arbitrarily based upon the number of outstanding shares of MRC. MROP acknowledges that MRC will receive all of the Shares hereunder, and consents to the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **EXCLUDED ASSETS AND LIABILITIES** 

The Contributed Assets consist solely of MRC's and MROP's right, title and interest in the Contributed Assets listed on Schedule 1. MAC shall not be the successor to MRC or MROP with respect to, and shall not assume or be liable to pay, perform or discharge, any debts, liabilities or obligations of MRC or MROP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **POST-CLOSING COVENANTS** 

From and after the Closing Date, each of MAC and MRC and MROP shall promptly take such further action and execute and deliver any additional document or instrument, reasonably requested by another party to this Agreement, to put MAC in full operating control of the Contributed Assets, to convey and assign to MAC, and to confirm MAC's title to, the Contributed Assets and to otherwise consummate the transactions contemplated hereby. It is acknowledged and understood that MAC may transfer such Contributed Assets to its operating partnership, MAC Operating Partnership, LP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **MISCELLANEOUS** 

The following provisions shall serve to supplement and qualify the representations, warranties and covenants of the parties set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 The contribution of the Contributed Assets may be further evidenced by deeds, assignments, bills of sale and other transfer documents, as deemed necessary or appropriate by MAC, to further effect the contribution of the Contributed Assets to MAC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 Neither this Agreement nor any of the rights, interests, or obligations under this Agreement shall be assigned by any party without the prior written consent of the other parties, which consent will not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 Nothing in this Agreement, express or implied, is intended or shall be construed to confer on any person, other than the parties to this Agreement, any right, remedy, or claim under or with respect to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 This Agreement may be amended only by an instrument in writing executed by all the parties, which writing must refer to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear the party's own expenses in connection with the preparation, execution, and performance of this Agreement and the transactions contemplated by this Agreement.<br>

CONTRIBUTION AGREEMENT <br>2

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict-of-laws principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 If any suit or action is instituted to interpret or enforce the provisions of this Agreement, to rescind this Agreement, or otherwise with respect to the subject matter of this Agreement, the party prevailing on an issue shall be entitled to recover with respect to such issue, in addition to costs, reasonable attorney fees incurred in preparation or in prosecution or defense of such suit or action as determined by the trial court, and if any appeal is taken from such decision, reasonable attorney fees as determined on appeal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8 In any court action, each party agrees not to elect a trial by jury, and waives any right to trial by jury. This waiver of right to trial by jury is separately given by each party, knowingly and voluntarily with the benefit of competent legal counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9 If any provision of this Agreement shall be invalid or unenforceable in any respect for any reason, the validity and enforceability of any such provision in any other respect and of the remaining provisions of this Agreement shall not be in any way impaired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10 This Agreement (including the documents and instruments referred to in this Agreement) constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement and supersedes all prior understandings and agreements, whether written or oral, among the parties with respect to such subject matter.

The parties have executed this Agreement to be effective as of January 1, 2026.

CONTRIBUTION AGREEMENT <br>3

------

---

| | |
|:---|:---|
| MACKENZIE REALTY CAPITAL, INC., | MACKENZIE REALTY CAPITAL, INC., |
| a Maryland corporation | a Maryland corporation |
| By: | &nbsp;&nbsp;&nbsp;&nbsp;/s/ Chip Patterson |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chip Patterson, Secretary |
| MACKENZIE REALTY OPERATING <br> PARTNERSHIP, LP, a Delaware limited partnership | MACKENZIE REALTY OPERATING <br> PARTNERSHIP, LP, a Delaware limited partnership |
| By: MACKENZIE REALTY CAPITAL, INC., | By: MACKENZIE REALTY CAPITAL, INC., |
| a Maryland corporation, general partner | a Maryland corporation, general partner |
| By: | &nbsp;&nbsp;&nbsp;&nbsp;/s/ Chip Patterson |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chip Patterson, Secretary |
| MACKENZIE APARTMENT COMMUNITIES, INC., <br> a Maryland corporation | MACKENZIE APARTMENT COMMUNITIES, INC., <br> a Maryland corporation |
| By: | &nbsp;&nbsp;&nbsp;&nbsp;/s/ Chip Patterson |
|  | &nbsp;&nbsp;&nbsp; Chip Patterson, Secretary |

---

CONTRIBUTION AGREEMENT <br>4

------

Schedule 1

---

| | | |
|:---|:---|:---|
|  | Owned by: | Percentage <br> ownership/Units |
| Madison-PVT Partners LLC | MRC | 98.45% |
| PVT-Madison Partners LLC | MRC | 98.75% |
| Hollywood Hillview Owner, LLC | MROP | 90% |
| MacKenzie-BAA IG Shoreline LLC | MROP | 98% |
| MRC Aurora, LLC | MROP | 100% |
| Campus Lane Residential, LLC | MROP | 100% |

---

CONTRIBUTION AGREEMENT <br>5

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## Exhibit 10.4

------

#### Exhibit 10.4

#### AGREEMENT OF LIMITED PARTNERSHIP

#### OF

#### MAC OPERATING PARTNERSHIP, LP

#### a Delaware limited partnership

------

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED

UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "*SECURITIES ACT*"),OR

THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,

TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH

REGISTRATION, UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE

PARTNERSHIP THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE

EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER

APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.

dated as of March 4, 2026

------

#### **TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **<u>Page</u>** |
| ARTICLE 1 DEFINED TERMS | ARTICLE 1 DEFINED TERMS | 1 |
| ARTICLE 2 ORGANIZATIONAL MATTERS | ARTICLE 2 ORGANIZATIONAL MATTERS | 16 |
| Section 2.1 | Formation | 16 |
| Section 2.2 | Name | 16 |
| Section 2.3 | Principal Office and Resident Agent; Principal Executive Office | 16 |
| Section 2.4 | Power of Attorney | 17 |
| Section 2.5 | Term | 18 |
| Section 2.6 | Partnership Interests Are Securities | 18 |
| ARTICLE 3 PURPOSE | ARTICLE 3 PURPOSE | 18 |
| Section 3.1 | Purpose and Business | 18 |
| Section 3.2 | Powers | 19 |
| Section 3.3 | Partnership Only for Purposes Specified | 19 |
| Section 3.4 | Representations and Warranties by the Partners | 20 |
| ARTICLE 4 CAPITAL CONTRIBUTIONS | ARTICLE 4 CAPITAL CONTRIBUTIONS | 22 |
| Section 4.1 | Capital Contributions of the Partners | 22 |
| Section 4.2 | Partnership Units | 23 |
| Section 4.3 | Additional Funds and Capital Contributions | 24 |
| Section 4.4 | No Interest; No Return | 25 |
| Section 4.5 | Other Contribution Provisions | 25 |
| ARTICLE 5 DISTRIBUTIONS | ARTICLE 5 DISTRIBUTIONS | 25 |
| Section 5.1 | Requirement and Characterization of Distributions | 25 |
| Section 5.2 | Distributions in Kind | 26 |
| Section 5.3 | Amounts Withheld | 26 |
| Section 5.4 | Distributions upon Liquidation | 26 |
| Section 5.5 | Distributions to Reflect Additional Partnership Units | 26 |
| Section 5.6 | Restricted Distributions | 26 |
| ARTICLE 6 ALLOCATIONS | ARTICLE 6 ALLOCATIONS | 26 |
| Section 6.1 | Timing and Amount of Allocations of Net Income and Net Loss | 26 |
| Section 6.2 | General Allocations | 27 |
| Section 6.3 | Regulatory Allocation Provisions | 27 |
| Section 6.4 | Tax Allocations | 29 |

---

i

------

---

| | | |
|:---|:---|:---|
| ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS | ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS | 30 |
| Section 7.1 | Management | 30 |
| Section 7.2 | Certificate of Limited Partnership | 35 |
| Section 7.3 | Restrictions on General Partner's Authority | 35 |
| Section 7.4 | Reimbursement of the General Partner | 37 |
| Section 7.5 | Outside Activities of the General Partner | 38 |
| Section 7.6 | Transactions with Affiliates | 38 |
| Section 7.7 | Indemnification | 39 |
| Section 7.8 | Liability of the General Partner | 41 |
| Section 7.9 | Title to Partnership Assets | 44 |
| Section 7.10 | Reliance by Third Parties | 45 |
| ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS | ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS | 45 |
| Section 8.1 | Limitation of Liability | 45 |
| Section 8.2 | Management of Business | 45 |
| Section 8.3 | Outside Activities of Limited Partners | 46 |
| Section 8.4 | Return of Capital | 46 |
| Section 8.5 | Rights of Limited Partners Relating to the Partnership | 46 |
| Section 8.6 | Partnership Right to Call Partnership Units | 47 |
| Section 8.7 | Rights as Objecting Partner | 47 |
| ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS | ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS | 48 |
| Section 9.1 | Records and Accounting | 48 |
| Section 9.2 | Partnership Year | 48 |
| Section 9.3 | Reports | 48 |
| ARTICLE 10 TAX MATTERS | ARTICLE 10 TAX MATTERS | 49 |
| Section 10.1 | Preparation of Tax Returns | 49 |
| Section 10.2 | Tax Elections | 49 |
| Section 10.3 | Tax Administrative Matters | 49 |
| Section 10.4 | Withholding | 51 |
| Section 10.5 | Organizational Expenses | 51 |
| ARTICLE 11 PARTNER TRANSFERS AND WITHDRAWALS | ARTICLE 11 PARTNER TRANSFERS AND WITHDRAWALS | 51 |
| Section 11.1 | Transfer | 51 |
| Section 11.2 | Transfer of General Partner's Partnership Interest | 52 |
| Section 11.3 | Limited Partners' Rights to Transfer | 52 |
| Section 11.4 | Admission of Substituted Limited Partners | 55 |
| Section 11.5 | Assignees | 56 |
| Section 11.6 | General Provisions | 56 |

---

ii

------

---

| | | |
|:---|:---|:---|
| ARTICLE 12 ADMISSION OF PARTNERS | ARTICLE 12 ADMISSION OF PARTNERS | 58 |
| Section 12.1 | Admission of Successor General Partner | 58 |
| Section 12.2 | Admission of Additional Limited Partners | 58 |
| Section 12.3 | Amendment of Agreement and Certificate of Limited Partnership | 59 |
| Section 12.4 | Limit on Number of Partners | 59 |
| Section 12.5 | Admission | 60 |
| ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION | ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION | 60 |
| Section 13.1 | Dissolution | 60 |
| Section 13.2 | Winding Up | 60 |
| Section 13.3 | Deemed Contribution and Distribution | 62 |
| Section 13.4 | Rights of Holders | 63 |
| Section 13.5 | Notice of Dissolution | 63 |
| Section 13.6 | Cancellation of Certificate of Limited Partnership | 63 |
| Section 13.7 | Reasonable Time for Winding-Up | 63 |
| ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS; MEETINGS | ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS; MEETINGS | 64 |
| Section 14.1 | Procedures for Actions and Consents of Partners | 64 |
| Section 14.2 | Amendments | 64 |
| Section 14.3 | Actions and Consents of the Partners | 64 |
| ARTICLE 15 GENERAL PROVISIONS | ARTICLE 15 GENERAL PROVISIONS | 66 |
| Section 15.1 | Redemption Rights of Qualifying Parties | 66 |
| Section 15.2 | Addresses and Notice | 70 |
| Section 15.3 | Titles and Captions | 71 |
| Section 15.4 | Pronouns and Plurals | 71 |
| Section 15.5 | Further Action | 71 |
| Section 15.6 | Binding Effect | 71 |
| Section 15.7 | Waiver | 71 |
| Section 15.8 | Counterparts | 72 |
| Section 15.9 | Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial | 72 |
| Section 15.10 | Entire Agreement | 72 |
| Section 15.11 | Invalidity of Provisions | 73 |
| Section 15.12 | Limitation to Preserve REIT Status | 73 |
| Section 15.13 | No Partition | 74 |
| Section 15.14 | No Third-Party Rights Created Hereby | 74 |
| Section 15.15 | No Rights as Stockholders | 74 |

---

------

#### Exhibits List
EXHIBIT A NOTICE OF REDEMPTION A-1

iii

------

#### AGREEMENT OF LIMITED PARTNERSHIP

#### OF MAC OPERATING PARTNERSHIP, LP
THIS AGREEMENT OF LIMITED PARTNERSHIP OF MAC Operating Partnership, LP, dated as of **May 28, 2020**, is made and entered into by and among **MacKenzie Apartment Communities, Inc.**, a Maryland corporation, as the General Partner, and the Persons from time to time party hereto, as limited partners.

WHEREAS, a Certificate of Limited Partnership of the Partnership was filed with the Delaware Division of Corporations on March 4, 2026;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

#### ARTICLE 1

#### DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement:

"*Accredited Investor*" has the meaning as defined in Rule 501 promulgated under the Securities Act.

"*Act*" means the Limited Partnership Act of the State of Delaware, as it may be amended from time to time, and any successor to such statute.

"*Actions*" has the meaning set forth in Section 7.7 hereof.

"*Additional Funds*" has the meaning set forth in Section 4.3A hereof.

"*Additional Limited Partner*" means a Person who is admitted to the Partnership as a limited partner pursuant to the Act and Section 4.2 and Section 12.2 hereof and who is shown as such on the books and records of the Partnership.

"*Adjusted Capital Account*" means, with respect to any Partner, the balance in such Partner's Capital Account as of the end of the relevant Partnership Year or other applicable period, after giving effect to the following adjustments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) increase such Capital Account by any amounts that such Partner is obligated to restore pursuant to this Agreement upon liquidation of such Partner's Partnership Interest or that such Person is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) decrease such Capital Account by the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

------

The foregoing definition of "Adjusted Capital Account" is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

"*Adjusted Capital Account Deficit*" means, with respect to any Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account as of the end of the relevant Partnership Year or other applicable period.

"*Adjustment Factor*" means 1.0; <u>provided</u>, <u>however</u>, that in the event that the General Partner (i) declares or pays a dividend on all of its outstanding REIT Shares wholly or partly in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares wholly or partly in REIT Shares, (ii) splits or subdivides its outstanding REIT Shares or (iii) effects a reverse stock split or otherwise combines its outstanding REIT Shares into a smaller number of REIT Shares, the Adjustment Factor shall be adjusted by multiplying the Adjustment Factor previously in effect by a fraction, the numerator of which shall be the number of REIT Shares issued and outstanding on the record date for such dividend, distribution, split, subdivision, reverse split or combination (assuming for such purposes that such dividend, distribution, split, subdivision, reverse split or combination has occurred as of such time), and the denominator of which shall be the actual number of REIT Shares (determined without the above assumption) issued and outstanding on such date and, <u>provided further</u>, that if the General Partner shall merge, consolidate or combine with any entity other than an Affiliate of the General Partner (the "*Surviving Partnership*"), the Adjustment Factor shall be adjusted by multiplying the Adjustment Factor by the number of shares of the Surviving Partnership into which one REIT Share is converted pursuant to such merger, consolidation or combination, determined as of the date of such merger, consolidation or combination. Any adjustment to the Adjustment Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event; <u>provided</u>, <u>however</u>, that if the General Partner receives a Notice of Redemption after the record date, but prior to the effective date of such dividend, distribution, split, subdivision, reverse split or combination, the Adjustment Factor shall be determined as if the General Partner had received the Notice of Redemption immediately prior to the record date for such dividend, distribution, split, subdivision, reverse split or combination.

"*Administrative Expenses*" means (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) costs and expenses incurred by the General Partner or the Partnership relating to any redemption or exchange of Partnership Interests and (iii) administrative costs and expenses of the General Partner, including any salaries or other payments to directors, officers or employees of the General Partner, and any accounting and legal expenses of the General Partner, in each case attributable to the Properties.

"*Affiliate*" means, with respect to any Person, any Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, "control" when used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

------

"*Agreement*" means this Limited Partnership Agreement of **MAC Operating Partnership, LP**, as now or hereafter amended, restated, modified, supplemented or replaced.

"*Applicable Percentage*" has the meaning set forth in Section 15.1B hereof.

"*Appraisal*" means, with respect to any assets, the written opinion of an independent third party experienced in the valuation of similar assets, selected by the General Partner. Such opinion may be in the form of an opinion by such independent third party that the value for such property or asset as set by the General Partner is fair, from a financial point of view, to the Partnership.

"*Assignee*" means a Person to whom a Partnership Interest has been Transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5 hereof.

"*Available Cash*" means, with respect to any period for which such calculation is being made,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the sum, without duplication, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Partnership's Net Income or Net Loss (as the case may be) for such period,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Partnership's Depreciation and all other noncash charges to the extent deducted in determining Net Income or Net Loss for such period,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the amount of any reduction in reserves of the Partnership referred to in clause (ii)(6) below (including, without limitation, reductions resulting because the General Partner determines such amounts are no longer necessary),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the excess, if any, of the net cash proceeds from the sale, exchange, disposition, financing or refinancing of Partnership property for such period over the gain (or loss, as the case may be) recognized from such sale, exchange, disposition, financing or refinancing during such period (excluding Terminating Capital Transactions), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) all other cash received (including amounts previously accrued as Net Income and amounts of deferred income) or any net amounts borrowed by the Partnership for such period that was not included in determining Net Income or Net Loss for such period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) less the sum, without duplication, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) all principal debt payments made during such period by the Partnership,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) capital expenditures made by the Partnership during such period,

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) investments by the Partnership in any entity (including loans made thereto) to the extent that such investments are not otherwise described in clause (ii)(1) or clause (ii)(2)above,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) all other expenditures and payments not deducted in determining the Partnership's Net Income or Net Loss for such period (including amounts paid in respect of expenses previously accrued),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any amount included in determining Net Income or Net Loss for such period that was not received by the Partnership during such period,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) the amount of any increase in the Partnership's reserves (including, without limitation, working capital reserves) established during such period that the General Partner determines are necessary or appropriate in its sole and absolute discretion,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) any amount distributed or paid in redemption of any Common Unit or other Partnership Units, including, without limitation, any Cash Amount paid, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) the amount of any working capital accounts and other cash or similar balances that the General Partner determines to be necessary or appropriate in its sole and absolute discretion.

Notwithstanding the foregoing, Available Cash shall not include (a) any cash received or reductions in reserves, or take into account any disbursements made, or reserves established, after dissolution and the commencement of the liquidation and winding up of the Partnership or (b) any Capital Contributions, whenever received or any payments, expenditures or investments made with such Capital Contributions.

"*BBA Partnership Audit Rules*" means Sections 6221 through 6241 of the Code, as amended by the Budget Act, including any other Code provisions with respect to the same subject matter as Sections 6221 through 6241 of the Code, and any regulations promulgated or proposed under any such Sections and any administrative guidance with respect thereto.

"*Budget Act*" means the Bi-partisan Budget Act of 2015.

"*Business Day*" means any day except a Saturday, Sunday or other day on which commercial banks in **Delaware** are authorized by law to close.

"*Capital Account*" means, with respect to any Partner, the capital account maintained by the General Partner for such Partner on the Partnership's books and records in accordance with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To each Partner's Capital Account, there shall be added such Partner's Capital Contributions, such Partner's distributive share of Net Income and any items in the nature of income or gain that are specially allocated pursuant to Section 6.3 hereof, and the amount of any Partnership liabilities assumed by such Partner or that are secured by any property distributed to such Partner.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) From each Partner's Capital Account, there shall be subtracted the amount of cash and the Gross Asset Value of any Partnership property distributed to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Net Losses and any items in the nature of expenses or losses that are specially allocated pursuant to Section 6.3 hereof, and the amount of any liabilities of such Partner assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership (except to the extent already reflected in the amount of such Partner's Capital Contribution).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In the event any interest in the Partnership is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent that it relates to the Transferred interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In determining the amount of any liability for purposes of subsections (i) and (ii) hereof, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations promulgated under Section 704 of the Code, and shall be interpreted and applied in a manner consistent with such Regulations. If the General Partner shall determine that it is necessary or appropriate to modify the manner in which the Capital Accounts are maintained in order to comply with such Regulations, the General Partner may make such modification. The General Partner may, in its sole discretion, (a) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any modifications that are necessary or appropriate in the event that unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2.

"*Capital Contribution*" means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any Contributed Property that such Partner contributes or is deemed to contribute pursuant to Article 4 hereof.

"*Cash Amount*" means an amount of cash equal to the product of (i) the Value of a REIT Share and (ii) the REIT Shares Amount determined as of the applicable Valuation Date.

"*Certificate*" means the Certificate of Limited Partnership of the Partnership filed with the Delaware Division of Corporations, as amended from time to time in accordance with the terms hereof and the Act.

"*Charity*" means an entity described in Section 501(c)(3) of the Code or any trust all the beneficiaries of which are such entities.

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"*Charter*" means the charter of the General Partner, within the meaning of the Maryland Corporations Code

"*Class A Common Unit*" has the meaning set forth in Section 4.2A.

"*Class B Common Unit*" has the meaning set forth in Section 4.2A.

"*Closing Price*" has the meaning set forth in the definition of "*Value*."

"*Code*" means the Internal Revenue Code of 1986, as amended and in effect from time to time or any successor statute thereto, as interpreted by the applicable Regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.

"*Common Unit*" means, initially, a Class A Common Unit or Class B Common Unit.

"*Consent*" means the consent to, approval of, or vote in favor of a proposed action by a Partner given in accordance with Article 14 hereof. The terms "*Consented*" and "*Consenting*" have correlative meanings.

"*Consent of the Class A Limited Partners*" means the Consent of Limited Partners holding a majority of the outstanding Class A Common Units held by all Limited Partners obtained prior to or after the taking of any action for which it is required by this Agreement and, except as otherwise provided in this Agreement, may be given or withheld by each Limited Partner in its sole and absolute discretion.

"*Consent of the General Partner*" means the Consent of the sole General Partner, which Consent, except as otherwise specifically required by this Agreement, may be obtained prior to or after the taking of any action for which it is required by this Agreement and may be given or withheld by the General Partner in its sole and absolute discretion.

"*Consent of the Partners*" means the Consent of the General Partner and the Consent of a Majority in Interest of the Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and, except as otherwise provided in this Agreement, may be given or withheld by the General Partner or the Limited Partners in their sole and absolute discretion; *provided*, *however*, that, if any such action affects only certain classes or series of Partnership Interests, "Consent of the Partners" means the Consent of the General Partner and the Consent of a Majority in Interest of the Partners of the affected classes or series of Partnership Interests.

"*Contributed Property*" means each Property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership.

"*Controlled Entity*" means, as to any Partner, (a) any corporation more than fifty percent (50%) of the outstanding voting stock of which is owned by such Partner or such Partner's Family Members or Affiliates, (b) any trust, whether or not revocable, of which such Partner or such Partner's Family Members or Affiliates are the sole beneficiaries, (c) any partnership of which such Partner or its Affiliates are the managing partners and in which such Partner, such Partner's Family Members or Affiliates hold partnership interests representing at least twenty-five percent (25%) of such partnership's capital and profits and (d) any limited liability company of which such Partner or its Affiliates are the managers and in which such Partner, such Partner's Family Members or Affiliates hold membership interests representing at least twenty-five percent (25%) of such limited liability company's capital and profits.

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"*Cut-Off Date*" means the fifth (5th) Business Day after the General Partner's receipt of a Notice of Redemption.

"*Debt*" means, as to any Person, as of any date of determination: (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person's interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (iv) lease obligations of such Person that, in accordance with generally accepted accounting principles, should be capitalized.

"*Default Rate*" means twenty percent (but not higher than the maximum lawful rate).

"*Depreciation*" means, for each Partnership Year or other applicable period, an amount equal to the federal income tax depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; *provided*, *however*, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

"*Disregarded Entity*" means, with respect to any Person, (i) any "qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)) of such Person, (ii) any entity treated as a disregarded entity for Federal income tax purposes with respect to such Person, or (iii) any grantor trust if the sole owner of the assets of such trust for Federal income tax purposes is such Person.

"*ERISA*" means the Employee Retirement Income Security Act of 1974, as amended.

"*Exchange Act*" means the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.

"*Family Members*" means, as to a Person that is an individual, such Person's spouse, ancestors, descendants (whether by blood or by adoption or step-descendants by marriage), brothers and sisters, nieces and nephews and *inter vivos* or testamentary trusts (whether revocable or irrevocable) of which only such Person and his or her spouse, ancestors, descendants (whether by blood or by adoption or step-descendants by marriage), brothers and sisters and nieces and nephews are beneficiaries.

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"*Flow-Through Entity*" has the meaning set forth in Section 3.4C hereof.

"*Flow-Through Partners*" has the meaning set forth in Section 3.4C hereof.

"*General Partner*" means MacKenzie Apartment Communities, Inc. a Maryland corporation that has elected to be taxed as a real estate investment trust, and its successors and assigns as a general partner of the Partnership, in each case, that is admitted from time to time to the Partnership as a general partner, and has not ceased to be a general partner, pursuant to the Act and this Agreement, in such Person's capacity as a general partner of the Partnership.

"*General Partner Interest*" means the entire Partnership Interest held by a General Partner hereof, which Partnership Interest may be expressed as a number of Partnership Common Units, Partnership Preferred Units or any other Partnership Units.

"*Gross Asset Value*" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset on the date of contribution, as determined by the General Partner and agreed to by the contributing Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Gross Asset Values of all Partnership assets immediately prior to the occurrence of any event described in clauses (i) through (v) below shall be adjusted to equal their respective gross fair market values, as determined by the General Partner using such reasonable method of valuation as it may adopt, as of the following times:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the acquisition of an additional interest in the Partnership (other than in connection with the execution of this Agreement but including, without limitation, acquisitions pursuant to Section 4.2 hereof or contributions or deemed contributions by the General Partner pursuant to Section 4.2 hereof) by a new or existing Partner in exchange for more than a *de minimis* Capital Contribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the distribution by the Partnership to a Partner of more than a *de minimis* amount of Partnership property as consideration for an interest in the Partnership;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the grant of an interest in the Partnership (other than a *de minimis* interest) as consideration for the provision of services to or for the benefit of the Partnership by an existing Partner acting in a partner capacity, or by a new Partner acting in a partner capacity or in anticipation of becoming a Partner of the Partnership; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution, as determined by the distributee and the General Partner; *provided*, *however*, that if the distributee is the General Partner, such gross market value shall be reasonably determined by the General Partner in good faith, or if the distributee and the General Partner cannot agree on such a determination, such gross fair market value shall be determined by Appraisal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); *provided*, *however*, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extent that the General Partner reasonably determines that an adjustment pursuant to subsection (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to subsection (a), subsection (b) or subsection (d) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.

"*Hart-Scott-Rodino Act*" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

"*Holder*" means either (a) a Partner or (b) an Assignee owning a Partnership Interest.

"*Incapacity*" or "*Incapacitated*" means: (i) as to any Partner who is an individual, death, total physical disability or entry by a court of competent jurisdiction adjudicating such Partner incompetent to manage his or her person or his or her estate; (ii) as to any Partner that is a corporation or limited liability company, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (iii) as to any Partner that is a partnership, the dissolution and commencement of winding up of the partnership; (iv) as to any Partner that is an estate, the distribution by the fiduciary of the estate's entire interest in the Partnership; (v) as to any trustee of a trust that is a Partner, the termination of the trust (but not the substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief of or against such Partner under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and non-appealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner's creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or Liquidator for the Partner or for all or any substantial part of the Partner's properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof, (g) the appointment without the Partner's consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment, or (h) an appointment referred to in clause (g) above is not vacated within ninety (90) days after the expiration of any such stay.

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"*Indemnitee*" means (i) any Person made, or threatened to be made, a party to a proceeding by reason of its status as (a) the General Partner or (b) a director of the General Partner or an officer of the Partnership or the General Partner and (ii) such other Persons (including Affiliates or employees of the General Partner or the Partnership) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.

"*IRS*" means the United States Internal Revenue Service.

"*Limited Partner*" means any Person that is admitted from time to time to the Partnership as a limited partner, and has not ceased to be a limited partner pursuant to the Act and this Agreement, of the Partnership, including any Substituted Limited Partner or Additional Limited Partner, in such Person's capacity as a limited partner of the Partnership.

"*Limited Partner Interest*" means a Partnership Interest of a Limited Partner in the Partnership representing a fractional part of the Partnership Interests of all Limited Partners and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Limited Partner Interest may be expressed as a number of Common Units or other Partnership Units.

"*Liquidating Event*" has the meaning set forth in Section 13.1 hereof.

"*Liquidator*" has the meaning set forth in Section 13.2A hereof.

"*Majority in Interest of the Partners*" means Partners holding in the aggregate Percentage Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of all Partners entitled to Consent to or withhold Consent from a proposed action.

"*Market Price*" has the meaning set forth in the definition of "*Value*."

"*Net Income*" or "*Net Loss*" means, for each Partnership Year or other applicable period, an amount equal to the Partnership's taxable income or loss for such year or other applicable period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of "Net Income" or "Net Loss" shall be added to (or subtracted from, as the case may be) such taxable income (or loss);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any expenditure of the Partnership described in Code Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of "Net Income" or "Net Loss," shall be subtracted from (or added to, as the case may be) such taxable income (or loss);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subsection (b) or subsection (c) of the definition of "Gross Asset Value," the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Gain or loss to the Partnership resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In lieu of the depreciation, amortization and other cost recovery deductions that would otherwise be taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Partnership Year or other applicable period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding any other provision of this definition of "Net Income" or "Net Loss," any item that is specially allocated pursuant to Article 6 hereof shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Section 6.3 hereof shall be determined by applying rules analogous to those set forth in this definition of "Net Income" or "Net Loss."

"*Nonrecourse Deductions*" has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

"*Nonrecourse Liability*" has the meaning set forth in Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2).

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"*Notice of Redemption*" means the Notice of Redemption substantially in the form of <u>Exhibit A</u> attached to this Agreement.

"*Ownership Limit*" means the restriction or restrictions on the ownership and transfer of stock of the General Partner imposed under the Charter.

"*Partner*" means the General Partner or a Limited Partner, and "*Partners*" means the General Partner and the Limited Partners.

"*Partner Minimum Gain*" means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

"*Partner Nonrecourse Debt*" has the meaning set forth in Regulations Section 1.704-2(b)(4).

"*Partner Nonrecourse Deductions*" has the meaning set forth in Regulations Section 1.704-2(i)(1), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).

"*Partnership*" means the limited partnership formed and continued under the Act and pursuant to this Agreement, and any successor thereto.

"*Partnership Interest*" means an ownership interest in the Partnership held by either a Limited Partner or a General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. There may be one or more classes or series of Partnership Interests. A Partnership Interest may be expressed as a number of Class A Common Units, Class B Common Units or other Partnership Units.

"*Partnership Minimum Gain*" has the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).

"*Partnership Record Date*" means the record date established by the General Partner for the purpose of determining the Partners entitled to notice of or to vote at any meeting of Partners or to consent to any matter, or to receive any distribution or the allotment of any other rights, or in order to make a determination of Partners for any other proper purpose, which, in the case of a distribution of Available Cash pursuant to Section 5.1 hereof, shall generally be the same as the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution.

"*Partnership Representative*" shall have the meaning set forth in Section 10.3A.

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"*Partnership Unit*" means a Class A Common Unit, Class B Common Unit or any other unit of the fractional, undivided share of the Partnership Interests that the General Partner has authorized pursuant to Section 4.2 hereof.

"*Partnership Unit Designation*" shall have the meaning set forth in Section 4.2B hereof.

"*Partnership Year*" means the fiscal year of the Partnership, which shall be the calendar year.

"*Percentage Interest*" means, with respect to each Partner, the fraction, expressed as a percentage, the numerator of which is the aggregate number of Partnership Units of all classes and series held by such Partner and the denominator of which is the total number of Partnership Units of all classes and series held by all Partners; *provided, however*, that, to the extent applicable in context, the term "Percentage Interest" means, with respect to a Partner, the fraction, expressed as a percentage, the numerator of which is the aggregate number of Partnership Units of a specified class or series (or specified group of classes and/or series) held by such Partner and the denominator of which is the total number of Partnership Units of such specified class or series (or specified group of classes and/or series) held by all Partners.

"*Permitted Transfer*" has the meaning set forth in Section 11.3A(5) hereof.

"*Person*" means an individual or a corporation, partnership, trust, unincorporated organization, association, limited liability company or other entity.

"*Preferred Return Per Class A Unit*" means, with respect to each Class A Common Unit outstanding on a specified Partnership Record Date (related to a REIT distribution), an amount initially equal to zero, and increased cumulatively on each Partnership Record Date by an amount equal to the product of (i) the cash dividend per REIT Share declared by the General Partner for holders of REIT Shares on such Partnership Record Date, including any special distributions, multiplied by (ii) the Adjustment Factor in effect on such Partnership Record Date; <u>provided</u>*,* <u>however</u>, that, for each Class A Common Unit, the increase that shall occur in accordance with the foregoing on the first Partnership Record Date that occurs on or after the date on which such Partnership Unit was first issued shall be the foregoing product of (i) and (ii) above, multiplied by a fraction, the numerator of which shall be the number of days that such Class A Common Unit was outstanding up to and including such first Partnership Record Date, and the denominator of which shall be the total number of days in the period from but excluding the immediately preceding Partnership Record Date to and including such first Partnership Record Date (related to a REIT distribution).

"*Properties*" means any assets and property of the Partnership such as, but not limited to, interests in real property and personal property, including, without limitation, fee interests, interests in ground leases, easements and rights of way, interests in limited liability companies, joint ventures or partnerships, interests in mortgages, and Debt instruments as the Partnership may hold from time to time and "Property" means any one such asset or property.

"*Qualifying Party*" means (a) a Limited Partner, (b) an Assignee or (c) a Person, including a lending institution as the pledgee of a pledge, who is the transferee of Class A Units in a Permitted Transfer; *provided*, *however*, that a Qualifying Party shall not include the General Partner.

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"*Redemption*" has the meaning set forth in Section 15.1A hereof.

"*Regulations*" means the income tax regulations under the Code, whether such regulations are in proposed, temporary or final form, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

"*Regulatory Allocations*" has the meaning set forth in Section 6.3A(viii) hereof.

"*REIT*" means a real estate investment trust qualifying under Code Section 856.

"*REIT Partner*" means (a) the General Partner or any Affiliate of the General Partner to the extent such Person has in place an election to qualify as a REIT and, (b) any Disregarded Entity with respect to any such Person.

"*REIT Payment*" has the meaning set forth in Section 15.12 hereof.

"*REIT Requirements*" means the requirements for qualifying as a REIT under the Code and Regulations.

"*REIT Share*" means a share of common stock of the General Partner, $0.01 par value per share.

"*REIT Shares Amount*" means a number of REIT Shares equal to the product of (a) the number of Tendered Units and (b) the Adjustment Factor; *provided*, *however*, that, in the event that the General Partner issues to all holders of REIT Shares as of a certain record date rights, options, warrants or convertible or exchangeable securities entitling the General Partner's stockholders to subscribe for or purchase REIT Shares, or any other securities or property (collectively, the "*Rights*"), with the record date for such Rights issuance falling within the period starting on the date of the Notice of Redemption and ending on the day immediately preceding the Specified Redemption Date, which Rights will not be distributed before the relevant Specified Redemption Date, then the REIT Shares Amount shall also include such Rights that a holder of that number of REIT Shares would be entitled to receive, expressed, where relevant hereunder, in a number of REIT Shares determined by the General Partner.

"*Related Party*" means, with respect to any Person, any other Person to whom ownership of shares of the General Partner's stock by the first such Person would be attributed under Code Section 544 (as modified by Code Section 856(h)(1)(B)) or Code Section 318(a) (as modified by Code Section 856(d)(5)).

"*Rights*" has the meaning set forth in the definition of "*REIT Shares Amount*."

"*Safe Harbors*" has the meaning set forth in Section 11.3C hereof.

"*SEC*" means the Securities and Exchange Commission.

"*Securities Act*" means the Securities Act of 1933, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.

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"*Specified Redemption Date*" means the 60th calendar day after the receipt by the General Partner of a Notice of Redemption subject to adjustment pursuant to Section 15.1B.

"*Subsidiary*" means, with respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person; provided, however, that, with respect to the Partnership, "Subsidiary" means solely a partnership or limited liability company (taxed, for federal income tax purposes, as a partnership or as a Disregarded Entity and not as an association or publicly traded partnership taxable as a corporation) of which the Partnership is a member or any "taxable REIT subsidiary" of the General Partner in which the Partnership owns shares of stock, unless the ownership of shares of stock of a corporation or other entity (other than a "taxable REIT subsidiary") will not jeopardize the General Partner's status as a REIT or any General Partner Affiliate's status as a "qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)), in which event the term "Subsidiary" shall include such corporation or other entity.

"*Substituted Limited Partner*" means a Person who is admitted as a Limited Partner to the Partnership pursuant to the Act and (i) Section 11.4 hereof or (ii) pursuant to any Partnership Unit Designation.

"*Surviving Partnership*" has the meaning set forth in the definition of "*Adjustment Factor*".

"*Tax Items*" has the meaning set forth in Section 6.4A hereof.

"*Tendered Units*" has the meaning set forth in Section 15.1A hereof.

"*Tendering Party*" has the meaning set forth in Section 15.1A hereof.

"*Terminating Capital Transaction*" means any sale or other disposition of all or substantially all of the assets of the Partnership or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the assets of the Partnership, in any case, not in the ordinary course of the Partnership's business.

"*Transfer*" means any sale, assignment, bequest, conveyance, devise, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange, transfer or other disposition or act of alienation, whether voluntary, involuntary or by operation of law; *provided*, *however*, that when the term is used in Article 11 hereof, except as otherwise expressly provided, "Transfer" does not include (a) any Redemption of Partnership Units by the Partnership, or acquisition of Tendered Units by the General Partner, pursuant to Section 15.1 or (b) any redemption of Partnership Units pursuant to any Partnership Unit Designation. The terms "Transferred" and "Transferring" have correlative meanings.

"*Valuation Date*" means the date of receipt by the General Partner of a Notice of Redemption pursuant to Section 15.1 herein, or such other date as specified herein, or, if such date is not a Business Day, the immediately preceding Business Day.

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"*Value*" means, on any Valuation Date with respect to a REIT Share, the average of the daily Market Prices for ten (10) consecutive trading days immediately preceding the Valuation Date. The term "*Market Price*" on any date means, with respect to any class or series of outstanding REIT Shares, the Closing Price for such REIT Shares on such date. The "*Closing Price*" on any date means the last sale price for such REIT Shares, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such REIT Shares, in either case as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such REIT Shares are listed or admitted to trading or, if such REIT Shares are not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the FINRA Automated Quotation System or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if such REIT Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such REIT Shares selected by the Board of Directors of the General Partner or, in the event that no trading price is available for such REIT Shares, the fair market value of the REIT Shares, as determined by the Board of Directors of the General Partner.

In the event that the REIT Shares Amount includes Rights that a holder of REIT Shares would be entitled to receive, then the Value of such Rights shall be determined by the General Partner on the basis of such quotations and other information as it considers appropriate.

#### ARTICLE 2

#### ORGANIZATIONAL MATTERS
Section 2.1 *Formation*

The Partnership is a limited partnership heretofore formed and continued pursuant to the provisions of the Act and upon the terms and subject to the conditions set forth in this Agreement. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Partnership Interest of each Partner shall be personal property for all purposes.

Section 2.2 *Name*

The name of the Partnership is "**MAC Operating Partnership, LP.**" The Partnership's business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words "Limited Partnership," "LP," "L.P.," "Ltd." or similar words or letters shall be included in the Partnership's name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Partners of such change in the next regular communication to the Partners.

Section 2.3 *Principal Office and Resident Agent; Principal Executive Office*

The registered agent and address of the Partnership shall be set forth in the Certificate and designated by the General Partner. The principal office of the Partnership is located at such place as the General Partner may from time to time designate. The Partnership may maintain offices at such other place or places within or outside the **State of Delaware** as the General Partner may from time to time designate.

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Section 2.4 *Power of Attorney*

A. Each Limited Partner and Assignee hereby irrevocably constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:

<sup>(1)</sup> execute, swear to, seal, acknowledge, deliver, file and record in the appropriate public offices: (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments, supplements or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability to the extent provided by applicable law) in the **State of Delaware** and in all other jurisdictions in which the Partnership may conduct business or own property; (b) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (c) all conveyances and other instruments or documents that the General Partner or the Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (d) all conveyances and other instruments or documents that the General Partner or the Liquidator deems appropriate or necessary to reflect the distribution or exchange of assets of the Partnership pursuant to the terms of this Agreement; (e) all instruments relating to the admission, acceptance, withdrawal, removal or substitution of any Partner pursuant to the terms of this Agreement or the Capital Contribution of any Partner; and (f) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges relating to Partnership Interests; and<br>

<sup>(2)</sup> execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement.<br>

Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Section 14.2 hereof or as may be otherwise expressly provided for in this Agreement.

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B. The foregoing power of attorney is hereby declared to be irrevocable and a special power coupled with an interest, in recognition of the fact that each of the Limited Partners and Assignees will be relying upon the power of the General Partner or the Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee and the Transfer of all or any portion of such Person's Partnership Interest and shall extend to such Person's heirs, successors, assigns and personal representatives. Each such Limited Partner and Assignee hereby agrees to be bound by any representation made by the General Partner or the Liquidator, acting in good faith pursuant to such power of attorney; and each such Limited Partner and Assignee hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator, taken in good faith under such power of attorney. Each Limited Partner and Assignee shall execute and deliver to the General Partner or the Liquidator, within fifteen (15) days after receipt of the General Partner's or the Liquidator's request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator (as the case may be) deems necessary to effectuate this Agreement and the purposes of the Partnership. Notwithstanding anything else set forth in this Section 2.4B, no Limited Partner shall incur any personal liability for any action of the General Partner or the Liquidator taken under such power of attorney.

Section 2.5 *Term*

The term of the Partnership commenced on **March 4, 2026**, the date that the Certificate was accepted for record by the **Delaware Division of Corporations** in accordance with the Act, and shall continue indefinitely unless the Partnership is dissolved sooner pursuant to the provisions of Article 13 hereof or as otherwise provided by law.

Section 2.6 *Partnership Interests Are Securities*

All Partnership Interests shall be securities within the meaning of, and governed by, Article 8 of the Uniform Commercial Code of any applicable jurisdiction. The General Partner Interests shall not be securities within the meaning of the Federal securities laws.

#### ARTICLE 3

#### PURPOSE
Section 3.1 *Purpose and Business*

The purpose and nature of the Partnership is to conduct any business, enterprise or activity permitted by or under the Act, including, without limitation, (i) to conduct the business of ownership, construction, reconstruction, development, redevelopment, alteration, improvement, maintenance, operation, sale, leasing, transfer, encumbrance, conveyance and exchange of the Properties, (ii) to acquire and invest in any securities and/or loans relating to the Properties, (iii) to enter into any partnership, joint venture, business trust arrangement, limited liability company or other similar arrangement to engage in any business permitted by or under the Act, or to own interests in any entity engaged in any business permitted by or under the Act, (iv) to conduct the business of providing property and asset management and brokerage services, whether directly or through one or more partnerships, joint ventures, Subsidiaries, business trusts, limited liability companies or similar arrangements, and (v) to do anything necessary or incidental to the foregoing.

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Section 3.2 *Powers*

The Partnership shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, to borrow and lend money and to issue evidence of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, to acquire, own, manage, improve and develop real property and lease, sell, transfer and dispose of real property.

Section 3.3 *Partnership Only for Purposes Specified*

The Partnership shall be a limited partnership formed pursuant to the Act, and this Agreement shall not be deemed to create a company, venture or partnership between or among the Partners or any other Persons with respect to any activities whatsoever other than the activities within the purposes of the Partnership as specified in Section 3.1 hereof; however, to the extent applicable, the Partnership is a "partnership at will" (and is not a partnership formed for a definite term or particular undertaking) within the meaning of the Act. Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, bind, commit or assume any obligation or responsibility on behalf of the Partnership, its properties or any other Partner. No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of any Partner, incurred either before or after the execution and delivery of this Agreement by such Partner, except as to those responsibilities, liabilities, indebtedness or obligations incurred pursuant to and as limited by the terms of this Agreement and the Act.

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Section 3.4 *Representations and Warranties by the Partners*

A. Each Partner that is an individual (including, without limitation, each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants to, and covenants with, each other Partner that (i) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any material agreement by which such Partner or any of such Partner's property is bound, or any statute, regulation, order or other law to which such Partner is subject, (ii) if five percent (5%) or more (by value) of the Partnership's interests are or will be owned by such Partner within the meaning of Code Section 7704(d)(3), such Partner does not, and for so long as it is a Partner will not, own, directly or indirectly, (a) stock of any corporation that is a tenant of (I) the General Partner or any Disregarded Entity with respect to the General Partner, (II) the Partnership or (III) any partnership, venture or limited liability company of which the General Partner, any Disregarded Entity with respect to the General Partner, or the Partnership is a direct or indirect member or (b) an interest in the assets or net profits of any non-corporate tenant of (I) the General Partner or any Disregarded Entity with respect to the General Partner, (II) the Partnership or (III) any partnership, venture, or limited liability company of which the General Partner, any Disregarded Entity with respect to the General Partner, or the Partnership is a direct or indirect member, (iii) such Partner has the legal capacity to enter into this Agreement and perform such Partner's obligations hereunder, and (iv) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms. Notwithstanding the foregoing, a Partner that is an individual shall not be subject to the ownership restrictions set forth in clause (ii) of the immediately preceding sentence to the extent such Partner obtains the written Consent of the General Partner prior to violating any such restrictions. Each Partner that is an individual shall also represent and warrant to the Partnership that such Partner is neither a "foreign person" within the meaning of Code Section 1445(f) nor a foreign partner within the meaning of Code Section 1446(e).

B. Each Partner that is not an individual (including, without limitation, each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants to, and covenants with, each other Partner that (i) all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including, without limitation, that of its general partner(s), committee(s), trustee(s), beneficiaries, directors and/or stockholder(s) (as the case may be) as required, (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its partnership or operating agreement, trust agreement, charter or bylaws (as the case may be) any material agreement by which such Partner or any of such Partner's properties or any of its partners, members, beneficiaries, trustees or stockholders (as the case may be) is or are bound, or any statute, regulation, order or other law to which such Partner or any of its partners, members, trustees, beneficiaries or stockholders (as the case may be) is or are subject, (iii) if five percent (5%) or more (by value) of the Partnership's interests are or will be owned by such Partner within the meaning of Code Section 7704(d)(3), such Partner does not, and for so long as it is a Partner will not, own, directly or indirectly, (a) stock of any corporation that is a tenant of (I) the General Partner or any Disregarded Entity with respect to the General Partner, (II) the Partnership or (III) any partnership, venture or limited liability company of which the General Partner, any General Partner, any Disregarded Entity with respect to the General Partner, or the Partnership is a direct or indirect member or (b) an interest in the assets or net profits of any non-corporate tenant of (I) the General Partner, or any Disregarded Entity with respect to the General Partner, (II) the Partnership or (III) any partnership, venture or limited liability company for which the General Partner, any General Partner, any Disregarded Entity with respect to the General Partner, or the Partnership is a direct or indirect member, and (iv) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms. Notwithstanding the foregoing, a Partner that is not an individual shall not be subject to the ownership restrictions set forth in clause (iii) of the immediately preceding sentence to the extent such Partner obtains the written Consent of the General Partner prior to violating any such restrictions. Each Partner that is not an individual shall also represent and warrant to the Partnership that such Partner is neither a "foreign person" within the meaning of Code Section 1445(f) nor a foreign partner within the meaning of Code Section 1446(e).

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C. Each Partner (including, without limitation, each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or Substituted Limited Partner) represents, warrants and agrees that (i) it has acquired and continues to hold its interest in the Partnership for its own account for investment purposes only and not for the purpose of, or with a view toward, the resale or distribution of all or any part thereof in violation of applicable laws, and not with a view toward selling or otherwise distributing such interest or any part thereof at any particular time or under any predetermined circumstances in violation of applicable laws, (ii) it is an Accredited Investor and is a sophisticated investor, able and accustomed to handling sophisticated financial matters for itself, particularly real estate investments, and that it has a sufficiently high net worth that it does not anticipate a need for the funds that it has invested in the Partnership in what it understands to be a highly speculative and illiquid investment, and (iii) without the Consent of the General Partner, it shall not take any action that would cause (a) the Partnership at any time to have more than 100 partners, including as partners those persons ("*Flow-Through Partners*") indirectly owning an interest in the Partnership through an entity treated as a partnership, Disregarded Entity, S corporation or grantor trust (each such entity, a "*Flow-Through Entity*"), but only if substantially all of the value of such Person's interest in the Flow-Through Entity is attributable to the Flow-Through Entity's interest (direct or indirect) in the Partnership; or (b) the Partnership Interest initially issued to such Partner or its predecessors to be held by more than two partners, including as partners any Flow-Through Partners. Notwithstanding the foregoing, a Partner shall not be subject to the restrictions set forth in clause (ii) of the immediately preceding sentence to the extent such Partner obtains the written Consent of the General Partner after providing evidence satisfactory to the General Partner that the transfer or issuance of the Partnership Interest to such Partner is exempt from registration under the Securities Act or the regulations promulgated thereunder (which evidence may include, at the General Partner's discretion, an opinion of counsel regarding the same at such Partner's cost).

D. The representations and warranties contained in Sections 3.4A, 3.4B and 3.4C hereof shall survive the execution and delivery of this Agreement by each Partner (and, in the case of an Additional Limited Partner or a Substituted Limited Partner, the admission of such Additional Limited Partner or Substituted Limited Partner as a Limited Partner in the Partnership) and the dissolution, liquidation and termination of the Partnership.

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E. Each Partner (including, without limitation, each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or Substituted Limited Partner) hereby acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including, without limitation, financial and descriptive information and documentation, that may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied.

F. Notwithstanding the foregoing, the General Partner may, in its sole and absolute discretion, permit the modification of any of the representations and warranties contained in Sections 3.4A, 3.4B and 3.4C above as applicable to any Partner (including, without limitation any Additional Limited Partner or Substituted Limited Partner or any transferee of either), provided that such representations and warranties, as modified, shall be set forth in either (i) a Partnership Unit Designation applicable to the Partnership Units held by such Partner or (ii) a separate writing addressed to the Partnership and the General Partner.

#### ARTICLE 4

#### CAPITAL CONTRIBUTIONS
Section 4.1 *Capital Contributions of the Partners*

The Partners will make Capital Contributions to the Partnership. Except as provided by law or in Section 4.2, 4.3, or 10.4 hereof, the Partners shall have no obligation or, except with the prior Consent of the General Partner, right to make any additional Capital Contributions or loans to the Partnership. The General Partner shall cause to be maintained in the principal business office of the Partnership, or such other place as may be determined by the General Partner, the books and records of the Partnership, which shall include, among other things, a register containing the name, address, and number, class and series of Partnership Units of each Partner, and such other information as the General Partner may deem necessary or desirable (the "*Register*"). The Register shall not be part of this Agreement. The General Partner shall from time to time update the Register as necessary to accurately reflect the information therein, including as a result of any sales, exchanges or other Transfers, or any redemptions, issuances or similar events involving Partnership Units. Any reference in this Agreement to the Register shall be deemed a reference to the Register as in effect from time to time. Subject to the terms of this Agreement, the General Partner may take any action authorized hereunder in respect of the Register without any need to obtain the consent or approval of any other Partner. No action of any Limited Partner shall be required to amend or update the Register. Except as required by law, no Limited Partner shall be entitled to receive a copy of the information set forth in the Register relating to any Partner other than itself.

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Section 4.2 *Partnership Units*

A. *Generally*. The Partnership initially is authorized to issue two classes of Partnership Units, designated as "Class A Common Units" ("*Class A Common Units*") or Class B Common Units ("*Class B Common Units*"), and having the respective preferences, conversion and other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption set forth herein. Except as expressly provided herein, Class A Common Units and Class B Common Units shall entitle the holders thereof to equal rights under this Agreement. Notwithstanding anything to the contrary in this Agreement, any Partnership Units issued to the General Partner or any Affiliate of the General Partner shall be Class B Common Units, and any Partnership Units acquired by the General Partner or any Affiliate of the General Partner from any Limited Partner pursuant to Sections 8.6 or 15.1 hereof or otherwise, shall automatically be converted to Class B Common Units.

B. *Issuances of Additional Partnership Interests*. Subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, the General Partner is hereby authorized to cause the Partnership to issue additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose, at any time or from time to time, to the Partners (including the General Partner) or to other Persons, and to admit such Persons as Additional Limited Partners, for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partner or any other Person. Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue Partnership Units (i) upon the conversion, redemption or exchange of any Debt, Partnership Units, or other securities issued by the Partnership, (ii) for less than fair market value, (iii) for no consideration, (iv) in connection with any merger of any other Person into the Partnership or (v) upon the contribution of property or assets to the Partnership. Any additional Partnership Interests may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption (including, without limitation, terms that may be senior or otherwise entitled to preference over existing Partnership Units) as shall be determined by the General Partner, in its sole and absolute discretion without the approval of any Limited Partner or any other Person, and set forth in a written document thereafter attached to and made an exhibit to this Agreement, which exhibit shall be an amendment to this Agreement and shall be incorporated herein by this reference (each, a "*Partnership Unit Designation*"), without the approval of any Limited Partner or any other Person. Without limiting the generality of the foregoing, the General Partner shall have authority to specify: (a) the allocations of items of Partnership income, gain, loss, deduction and credit to each such class or series of Partnership Interests; (b) the right of each such class or series of Partnership Interests to share (on a *pari passu*, junior or preferred basis) in Partnership distributions; (c) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; (d) the voting rights, if any, of each such class or series of Partnership Interests; and (e) the conversion, redemption or exchange rights applicable to each such class or series of Partnership Interests. Except as expressly set forth in any Partnership Unit Designation or as may otherwise be required under the Act, a Partnership Interest of any class or series other than a Class A Common Unit or Class B Common Unit shall not entitle the holder thereof to vote on, or consent to, any matter. Upon the issuance of any additional Partnership Interest, the General Partner shall update the Register and the books and records of the Partnership as appropriate to reflect such issuance.

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C. *No Preemptive Rights*. Except as expressly provided in this Agreement or in any Partnership Unit Designation, no Person, including, without limitation, any Partner or Assignee, shall have any preemptive, preferential, participation or similar right or rights to subscribe for or acquire any Partnership Interest.

Section 4.3 *Additional Funds and Capital Contributions*

A. *General*. The General Partner may, at any time and from time to time, determine that the Partnership requires additional funds ("*Additional Funds*") for the acquisition or development of additional Properties, for the redemption of Partnership Units, distributions of cash to the Holders of the Preferred Return Per Class A Unit or for such other purposes as the General Partner may determine, in its sole and absolute discretion. Additional Funds may be obtained by the Partnership, at the election of the General Partner, in any manner provided in, and in accordance with, the terms of this Section 4.3 without the approval of any Limited Partner or any other Person.

B. *Additional Capital Contributions*. The General Partner, on behalf of the Partnership, may obtain any Additional Funds by accepting Capital Contributions from any Partners or other Persons. In connection with any such Capital Contribution (of cash or property), the General Partner is hereby authorized to cause the Partnership from time to time to issue additional Partnership Units (as set forth in Section 4.2 above) in consideration therefor and the Percentage Interests of the General Partner and the Limited Partners shall be adjusted to reflect the issuance of such additional Partnership Units.

C. *Loans by Third Parties*. The General Partner, on behalf of the Partnership, may obtain any Additional Funds by causing the Partnership to incur Debt to any Person (other than the General Partner (but, for this purpose, disregarding any Debt that may be deemed incurred to the General Partner by virtue of clause (iii) of the definition of Debt)) upon such terms as the General Partner determines appropriate, including making such Debt convertible, redeemable or exchangeable for Partnership Units or REIT Shares; *provided*, *however*, that the Partnership shall not incur any such Debt if any Partner would be personally liable for the repayment of such Debt (unless such Partner otherwise agrees).

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D. *General Partner Loans*. The General Partner, on behalf of the Partnership, may obtain any Additional Funds by causing the Partnership to incur Debt to the General Partner if such Debt is on terms and conditions no less favorable to the Partnership than would be available to the Partnership from any third party; *provided*, *however*, that the Partnership shall not incur any such Debt if any Partner would be personally liable for the repayment of such Debt (unless such Partner otherwise agrees).

Section 4.4 *No Interest; No Return*

No Partner shall be entitled to interest on its Capital Contribution or on such Partner's Capital Account. Except as provided herein or by law, no Partner shall have any right to demand or receive the return of its Capital Contribution from the Partnership.

Section 4.5 *Other Contribution Provisions*

In the event that any Partner is admitted to the Partnership and is given a Capital Account in exchange for services rendered to the Partnership, such transaction shall be treated by the Partnership and the affected Partner as if the Partnership had compensated such partner in cash and such Partner had contributed the cash that the Partner would have received to the capital of the Partnership. In addition, with the Consent of the General Partner, one or more Partners may enter into agreements with the Partnership with the respect to property or other assets which have the effect of providing a guarantee of certain obligations of the Partnership (and/or a wholly owned Subsidiary of the Partnership).

#### ARTICLE 5

#### DISTRIBUTIONS
Section 5.1 *Requirement and Characterization of Distributions*

Subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation and except as provided in Section 5.6, the General Partner shall be required to cause the Partnership to distribute Available Cash, on a quarterly basis, to the Holders as of any Partnership Record Date: (i) first, with respect to any Partnership Units that are entitled to any preference in distribution, in accordance with the rights of Holders of such class(es) of Partnership Units (and, within each such class, among the Holders of each such class, pro rata in proportion to their respective Percentage Interests of such class on such Partnership Record Date); (ii) second, to the holders of Class A Common Units, pro rata in accordance with each such Holder's Preferred Return Per Class A Unit with respect to all Class A Common Units held by such Holder, less the aggregate amount previously distributed with respect to such Holder's Class A Common Units pursuant to this Section 5.1(ii); and (iii) third, to the Holders of Class B Common Units, pro rata in proportion to the total number of Class B Common Units held by them on such Partnership Record Date. Notwithstanding the foregoing, to the extent the General Partner makes a distribution to all holders of its outstanding REIT stock and the Partnership does not have Available Cash sufficient to cause the Preferred Return Per Class A Unit to return to zero, the General Partner may cause the Partnership to incur Debt to the General Partner in accordance with Section 4.3(D) and 5.6 hereof.

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Section 5.2 *Distributions in Kind*

Except as expressly provided herein, no right is given to any Holder to demand and receive property other than cash as provided in this Agreement. The General Partner may determine, in its sole and absolute discretion, to make a distribution in kind of Partnership assets to the Holders, and such assets shall be distributed in such a fashion as to ensure that the fair market value is distributed and allocated in accordance with Articles 5, 6 and 13 hereof; *provided*, *however*, that the General Partner shall not make a distribution in kind to any Holder unless the Holder has been given 90 days prior written notice of such distribution.

Section 5.3 *Amounts Withheld*

All amounts withheld pursuant to the Code or any provisions of any state, local or non-United States tax law and Section 10.4 hereof with respect to any allocation, payment or distribution to any Holder shall be treated as amounts paid or distributed to such Holder pursuant to Section 5.1 hereof for all purposes under this Agreement.

Section 5.4 *Distributions upon Liquidation*

Notwithstanding the other provisions of this Article 5, net proceeds from a Terminating Capital Transaction, and any other amounts distributed after the occurrence of a Liquidating Event, shall be distributed to the Holders in accordance with Section 13.2 hereof.

Section 5.5 *Distributions to Reflect Additional Partnership Units*

In the event that the Partnership issues additional Partnership Units pursuant to the provisions of Article 4 hereof, subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, the General Partner is hereby authorized to make such revisions to this Article 5 and to Articles 6, 11 and 12 hereof as it determines are necessary or desirable to reflect the issuance of such additional Partnership Units, including, without limitation, making preferential distributions to Holders of certain classes of Partnership Units.

Section 5.6 *Restricted Distributions*

Notwithstanding any provision to the contrary contained in this Agreement, neither the Partnership nor the General Partner, on behalf of the Partnership, shall make a distribution to any Holder if such distribution would violate the Act or other applicable law.

#### ARTICLE 6

#### ALLOCATIONS
Section 6.1 *Timing and Amount of Allocations of Net Income and Net Loss*

Net Income and Net Loss of the Partnership shall be determined and allocated with respect to each Partnership Year as of the end of each such year, provided that the General Partner may in its discretion allocate Net Income and Net Loss for a shorter period as of the end of such period (and, for purposes of this Article 6, references to the term "Partnership Year" may include such shorter periods). Except as otherwise provided in this Article 6, and subject to Section 11.6C hereof, an allocation to a Holder of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss.

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Section 6.2 *General Allocations*

Except as otherwise provided in this Article 6 and Section 11.6C hereof, Net Income and Net Loss for any Partnership Year shall be allocated to each of the Holders as follows:

<br> A. Net Income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *First,* 100% to the holders of Class A Common Units in accordance with their respective Percentage Interests in an amount equal to the excess of such holder's cumulative distributions pursuant to Section 5.1(ii) to the last day of the current Partnership year or other period, or to the date of redemption or exchange with the General Partner to the extent such units are redeemed or exchanged during such period, over the Cumulative Net Income previously allocated to such holder pursuant to this Section 6.2A; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Second, 100% to the holders of Class B Common Units in accordance with their respective Percentage Interests.

B. Net Losses. Except as provided in Section 6.3A, Net Loss for any Partnership year or other period shall be allocated to the holders of Class B Common Units in accordance with their Percentage Interests.

C. Allocations to Reflect Issuance of Additional Partnership Interests. In the event that the Partnership issues additional Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Section 4.2 or 4.3, the General Partner shall make such revisions to this Section 6.2 or to Section 12.2C or 13.2A as it determines are necessary to reflect the terms of the issuance of such additional Partnership Interests, including making preferential allocations to certain classes of Partnership Interests, subject to the terms of any Partnership Unit Designation with respect to Partnership Interests then outstanding.

Section 6.3 *Regulatory Allocation Provisions*

Notwithstanding the foregoing provisions of this Article 6:

<br> A. Regulatory Allocations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Minimum Gain Chargeback*. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding the provisions of Section 6.2 hereof, or any other provision of this Article 6, if there is a net decrease in Partnership Minimum Gain during any Partnership Year, each Holder shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Holder's share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3A(i) is intended to qualify as a "minimum gain chargeback" within the meaning of Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Partner Minimum Gain Chargeback*. Except as otherwise provided in Regulations Section 1.704-2(i)(4) or in Section 6.3A(i) hereof, if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership Year, each Holder who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Holder's share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3A(ii) is intended to qualify as a "chargeback of partner nonrecourse debt minimum gain" within the meaning of Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Nonrecourse Deductions and Partner Nonrecourse Deductions*. Any Nonrecourse Deductions for any Partnership Year shall be specially allocated to the Holders in accordance with their interests in the Partnership as determined by the General Partner. Any Partner Nonrecourse Deductions for any Partnership Year shall be specially allocated to the Holder(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Qualified Income Offset*. If any Holder unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be specially allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of such Holder as quickly as possible, provided that an allocation pursuant to this Section 6.3A(iv) shall be made if and only to the extent that such Holder would have an Adjusted Capital Account Deficit after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3A(iv) were not in the Agreement. It is intended that this Section 6.3A(iv) qualify and be construed as a "qualified income offset" within the meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) *Gross Income Allocation*. In the event that any Holder has a deficit Capital Account at the end of any Partnership Year that is in excess of the sum of (1) the amount (if any) that such Holder is obligated to restore to the Partnership upon complete liquidation of such Holder's Partnership Interest and (2) the amount that such Holder is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Holder shall be specially allocated items of Partnership income and gain in the amount of such excess to eliminate such deficit as quickly as possible, provided that an allocation pursuant to this Section 6.3A(v) shall be made if and only to the extent that such Holder would have a deficit Capital Account in excess of such sum after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3A(v) and Section 6.3A(iv) hereof were not in the Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) *Limitation on Allocation of Net Loss*. To the extent that any allocation of Net Loss would cause or increase an Adjusted Capital Account Deficit as to any Holder, such allocation of Net Loss shall be reallocated among the other Holders of Partnership Units in accordance with their interests in the Partnership as determined by the General Partner, subject to the limitations of this Section 6.3A(vi).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) *Section 754 Adjustment*. To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Holder in complete liquidation of its interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Holders in accordance with their interests in the Partnership as determined by the General Partner in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holder(s) to whom such distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) *Curative Allocations*. The allocations set forth in Sections 6.3A(i), (ii), (iii), (iv), (v), (vi) and (vii) hereof (the "*Regulatory Allocations*") are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Sections 6.1 and 6.2 hereof, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Holders so that to the extent possible without violating the requirements giving rise to the Regulatory Allocations, the net amount of such allocations of other items and the Regulatory Allocations to each Holder shall be equal to the net amount that would have been allocated to each such Holder if the Regulatory Allocations had not occurred.

B. Allocation of Excess Nonrecourse Liabilities. For purposes of determining a Holder's proportional share of the "excess nonrecourse liabilities" of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), each Holder's respective interest in Partnership profits shall be equal to such Holder's interest in the Partnership as determined by the General Partner*.*

Section 6.4 *Tax Allocations*

A. In General. Except as otherwise provided in this Section 6.4, for income tax purposes under the Code and the Regulations, each Partnership item of income, gain, loss and deduction (collectively, "*Tax Items*") shall be allocated among the Holders in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to Section 6.2 hereof.

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B. Section 704(c) Allocations. Notwithstanding Section 6.4A hereof, Tax Items with respect to Property that is contributed to the Partnership with an initial Gross Asset Value that varies from its basis in the hands of the contributing Partner immediately preceding the date of contribution shall be allocated among the Holders for income tax purposes pursuant to Regulations promulgated under Code Section 704(c) so as to take into account such variation. The Partnership shall account for such variation under any method approved under Code Section 704(c) and the applicable Regulations as chosen by the General Partner. In the event that the Gross Asset Value of any Partnership asset is adjusted pursuant to subsection (b) of the definition of "Gross Asset Value" (provided in Article 1 hereof), subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Code Section 704(c) and the applicable Regulations and using the method chosen by the General Partner. Allocations pursuant to this Section 6.4B are solely for purposes of Federal, state and local income taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Net Income, Net Loss, or any other items or distributions pursuant to any provision of this Agreement.

#### ARTICLE 7

#### MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 *Management*

A. Except as otherwise expressly provided in this Agreement, including any Partnership Unit Designation, all management powers over the business and affairs of the Partnership are and shall be exclusively vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. No General Partner may be removed by the Partners, with or without cause, except with the Consent of the General Partner. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or that are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to the other provisions hereof including, without limitation, Section 3.2 and Section 7.3, and the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, shall have full and exclusive power and authority, without the consent or approval of any Limited Partner, to do or authorize all things deemed necessary or desirable by it to conduct the business and affairs of the Partnership, to exercise or direct the exercise of all of the powers of the Partnership and a general partner under the Act and this Agreement and to effectuate the purposes of the Partnership including, without limitation:

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<sup>(1)</sup> the making of any expenditures, the lending or borrowing of money or selling of assets (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to the Holders in such amounts as will permit the General Partner to prevent the imposition of any federal income tax on the General Partner (including, for this purpose, any excise tax pursuant to Code Section 4981), to make distributions to its stockholders and payments to any taxing authority sufficient to permit the General Partner to maintain REIT status or otherwise to satisfy the REIT Requirements), the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness (including the securing of same by deed to secure debt, mortgage, deed of trust or other lien or encumbrance on the Partnership's assets) and the incurring of any obligations to conduct the activities of the Partnership;<br>

<br> (2) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

<br> (3) the taking of any and all acts to ensure that the Partnership will not be classified as a "publicly traded partnership" under Code Section 7704;

<sup>(4)</sup> subject to Section 11.2 hereof, the acquisition, sale, transfer, exchange or other disposition of any, all or substantially all of the assets (including the goodwill) of the Partnership (including, but not limited to, the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Partnership) or the merger, consolidation, reorganization or other combination of the Partnership with or into another entity;<br>

<sup>(5)</sup> the mortgage, pledge, encumbrance or hypothecation of any assets of the Partnership, the assignment of any assets of the Partnership in trust for creditors or on the promise of the assignee to pay the debts of the Partnership, the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms that the General Partner sees fit, including, without limitation, the financing of the operations and activities of the General Partner, the Partnership or any of the Partnership's Subsidiaries, the lending of funds to other Persons (including, without limitation, the General Partner and/or the Partnership's Subsidiaries) and the repayment of obligations of the Partnership, its Subsidiaries and any other Person in which the Partnership has an equity investment, and the making of capital contributions to and equity investments in the Partnership's Subsidiaries;<br>

<br> (6) the management, operation, leasing, landscaping, repair, alteration, demolition, replacement or improvement of any Property;

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<sup>(7)</sup> the negotiation, execution and performance of any contracts, including leases (including ground leases), easements, management agreements, rights of way and other property-related agreements, conveyances or other instruments to conduct the Partnership's operations or implement the General Partner's powers under this Agreement, including contracting with contractors, developers, consultants, governmental authorities, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation, as applicable, out of the Partnership's assets;<br>

<sup>(8)</sup> the distribution of Partnership cash or other Partnership assets in accordance with this Agreement, the holding, management, investment and reinvestment of cash and other assets of the Partnership, and the collection and receipt of revenues, rents and income of the Partnership;<br>

<sup>(9)</sup> the selection and dismissal of employees of the Partnership (if any) (including, without limitation, employees having titles or offices such as "president," "vice president," "secretary" and "treasurer"), and agents, outside attorneys, accountants, consultants and contractors of the Partnership and the determination of their compensation and other terms of employment or hiring;<br>

<br> (10) the maintenance of such insurance (including, without limitation, directors and officers insurance) for the benefit of the Partnership and the Partners (including, without limitation, the General Partner);

<sup>(11)</sup> the formation of, or acquisition of an interest in, and the contribution of property to, any further limited or general partnerships, limited liability companies, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to, any Subsidiary and any other Person in which the General Partner has an equity investment from time to time);<br>

<sup>(12)</sup> the control of any matters affecting the rights and obligations of the Partnership, including the settlement, compromise, submission to arbitration or any other form of dispute resolution, or abandonment, of any claim, cause of action, liability, debt or damages, due or owing to or from the Partnership, the commencement or defense of suits, legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, and the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expense, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;<br>

<br> (13) the undertaking of any action in connection with the Partnership's direct or indirect investment in any Subsidiary or any other Person (including, without limitation, the contribution or loan of funds by the Partnership to such Persons);

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<sup>(14)</sup> the determination of the fair market value of any Partnership property distributed in kind using such reasonable method of valuation as the General Partner may adopt; *provided*, *however*, that such methods are otherwise consistent with the requirements of this Agreement;<br>

<br> (15) the enforcement of any rights against any Partner pursuant to representations, warranties, covenants and indemnities relating to such Partner's contribution of property or assets to the Partnership;

<sup>(16)</sup> the exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;<br>

<sup>(17)</sup> the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;<br>

<br> (18) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest, pursuant to contractual or other arrangements with such Person;

<sup>(19)</sup> the making, execution and delivery of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases, confessions of judgment or any other legal instruments or agreements in writing;<br>

<br> (20) the issuance of additional Partnership Units in connection with Capital Contributions by Additional Limited Partners and additional Capital Contributions by Partners pursuant to Article 4 hereof;

<br> (21) an election to dissolve the Partnership pursuant to Section 13.1B hereof;

<br> (22) the distribution of cash to acquire Common Units held by a Limited Partner in connection with a Redemption under Section 15.1 hereof;

<br> (23) an election to acquire Tendered Units in exchange for REIT Shares;

<sup>(24)</sup> the maintenance of the Register from time to time to reflect accurately at all times the Capital Contributions and Percentage Interests of the Partners as the same are adjusted from time to time to reflect redemptions, Capital Contributions, the issuance of Partnership Units, the admission of any Additional Limited Partner or any Substituted Limited Partner or otherwise, which shall not be deemed an amendment to this Agreement, as long as the matter or event being reflected in the Register otherwise is authorized by this Agreement;<br>

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<br> (25) the registration of any class of securities of the Partnership under the Securities Act or the Exchange Act, and the listing of any debt securities of the Partnership on any exchange; and

<sup>(26)</sup> the taking of such other action, execution, acknowledgement, swearing to or delivering of such other documents and instruments, and performance of any and all other acts that the General Partner deems necessary or appropriate such that the General Partner shall continue to satisfy the REIT Requirements and avoid any federal income or excise tax liability.<br>

B. Each of the Limited Partners agrees that, except as provided in Section 7.3 hereof and subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, the General Partner is authorized to execute and deliver any affidavit, agreement, certificate, consent, instrument, notice, power of attorney, waiver or other writing or document in the name and on behalf of the Partnership and to otherwise exercise any power of the General Partner under this Agreement and the Act on behalf of the Partnership without any further act, approval or vote of the Partners or any other Persons, notwithstanding any other provision of the Act or any applicable law, rule or regulation and, in the absence of any specific corporate action on the part of the General Partner to the contrary, the taking of any action or the execution of any such document or writing by an officer of the General Partner, in the name and on behalf of the General Partner, in its capacity as the general partner of the Partnership, shall conclusively evidence (1) the approval thereof by the General Partner, in its capacity as the general partner of the Partnership, (2) the General Partner's determination that such action, document or writing is necessary, advisable, appropriate, desirable or prudent to conduct the business and affairs of the Partnership, exercise the powers of the Partnership under this Agreement and the Act or effectuate the purposes of the Partnership, or any other determination by the General Partner required by this Agreement in connection with the taking of such action or execution of such document or writing, and (3) the authority of such officer with respect thereto.

<br> C. At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance on the Properties and (ii) liability insurance for the Indemnitees hereunder.

D. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain working capital and other reserves in such amounts as the General Partner, in its sole and absolute discretion, determines from time to time.

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E. The determination as to any of the following matters, made by or at the direction of the General Partner consistent with this Agreement and the Act, shall be final and conclusive and shall be binding upon the Partnership and every Limited Partner: the amount of assets at any time available for distribution or the redemption of Common Units; the amount and timing of any distribution; any determination to redeem Tendered Units; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); the amount of any Partner's Capital Account, Adjusted Capital Account or Adjusted Capital Account Deficit; the amount of Net Income, Net Loss or Depreciation for any period; any special allocations of Net Income or Net Loss pursuant to Sections 6.3 or 6.4; the Gross Asset Value of any Partnership asset; the Value of any REIT Share; the timing and amount of any adjustment to the Adjustment Factor; any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or distributions, qualifications or terms or conditions of redemption of any class or series of Partnership Interest; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Partnership or of any Partnership Interest; the number of authorized or outstanding Units of any class or series; any matter relating to the acquisition, holding and disposition of any assets by the Partnership; or any other matter relating to the business and affairs of the Partnership or required or permitted by applicable law, this Agreement or otherwise to be determined by the General Partner.

Section 7.2 *Certificate of Limited Partnership*

The General Partner may file amendments to and restatements of the Certificate and do all the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the **State of Delaware** and each other state, the District of Columbia or any other jurisdiction, in which the Partnership may elect to do business or own property. Subject to the terms of Section 8.5A hereof, the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability to the extent provided by applicable law) in the **State of Delaware** and any other state, or the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.

Section 7.3 *Restrictions on General Partner's Authority*

<br> A. The General Partner may not take any action in contravention of an express prohibition or limitation of this Agreement without the Consent of the Class A Limited Partners, and may not, without limitation:

<br> (1) take any action that would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement; or

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<br> (2) perform any act that would subject a Limited Partner to liability as a general partner in any jurisdiction or any other liability except as provided herein or under the Act.

<br> B. Except as provided in Section 7.3C hereof, the General Partner shall not, without the prior Consent of the Partners, amend, modify or terminate this Agreement.

C. Notwithstanding Section 7.3B and 14.2 hereof but subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, the General Partner shall have the power, without the Consent of the Partners or the consent or approval of any Limited Partner or any other Person (including any Class A Limited Partner), to amend this Agreement as may be required to facilitate or implement any of the following purposes:

<br> (1) to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;

<sup>(2)</sup> to reflect the admission, substitution or withdrawal of Partners, the Transfer of any Partnership Interest or the termination of the Partnership in accordance with this Agreement and to update the Register in connection with such admission, substitution, withdrawal or Transfer;<br>

<sup>(3)</sup> to reflect a change that is of an inconsequential nature or does not adversely affect the Limited Partners in any material respect, or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with law or with other provisions, or make other changes with respect to matters arising under this Agreement that will not be inconsistent with law or with the provisions of this Agreement;<br>

<sup>(4)</sup> to set forth or amend the designations, preferences, conversion and other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption of the Holders of any additional Partnership Interests issued pursuant to Article 4 (including any changes contemplated by Section 5.5 above);<br>

<br> (5) to satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a Federal or state agency or contained in Federal or state law;

<sup>(6)</sup> (a) to reflect such changes as are reasonably necessary for the General Partner to maintain its status as a REIT or to satisfy the REIT Requirements or (b) to reflect the Transfer of all or any part of a Partnership Interest among the General Partner and any Disregarded Entity with respect to the General Partner;<br>

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<br> (7) to modify either or both of the manner in which items of Net Income or Net Loss are allocated pursuant to Article 6 or the manner in which Capital Accounts are adjusted, computed, or maintained;

<br> (8) to reflect the issuance of additional Partnership Interests in accordance with Section 4.2; and

<br> (9) to reflect any other modification to this Agreement as is reasonably necessary for the business or operations of the Partnership or the General Partner and which does not violate Section 7.3D.

D. Notwithstanding Sections 7.3B, 7.3C (other than as set forth below in this Section 7.3D) and 14.2 hereof, this Agreement shall not be amended, and no action may be taken by the General Partner, without the Consent of each Partner adversely affected thereby, if such amendment or action would (i) convert a Limited Partner Interest in the Partnership into Class B Common Units (except as a result of the General Partner acquiring such Limited Partner Interest), (ii) adversely modify in any material respect the limited liability of a Limited Partner, (iii) alter the rights of any Partner to receive the distributions to which such Partner is entitled pursuant to Article 5 hereof, (iv) alter or modify the Redemption rights, Cash Amount or REIT Shares Amount as set forth in Section 15.1 hereof, or amend or modify any related definitions (except, in any case, as permitted pursuant to clause (6) of Section 7.3C hereof), (v) alter or modify Section 11.2 hereof (except as permitted pursuant to clause (11) of Section 7.3C hereof), or (vi) amend this Section 7.3D (except as permitted pursuant to clause (6) of Section 7.3C hereof). Further, no amendment may alter the restrictions on the General Partner's authority set forth elsewhere in this Section 7.3 without the Consent specified therein. Any such amendment or action consented to by any Partner shall be effective as to that Partner, notwithstanding the absence of such consent by any other Partner. For the avoidance of doubt, nothing in this Section 7.3D shall affect the General Partner's rights to cause the Partnership to issue additional Partnership Interests and to determine the designations, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of such Partnership Interests.

Section 7.4 *Reimbursement of the General Partner*

A. The General Partner shall not be compensated for its services as General Partner of the Partnership except as provided in this Agreement (including the provisions of Articles 5 and 6 hereof regarding distributions, payments and allocations to which the General Partner may be entitled in its capacity as the General Partner).

B. To the extent practicable, Administrative Expenses shall be billed directly to and paid by the Partnership and, subject to Section 15.12 hereof, if and to the extent any reimbursements to the General Partner or any of its Affiliates by the Partnership pursuant to this Section 7.4 constitute gross income to such Person (as opposed to the repayment of advances made by such Person on behalf of the Partnership), such amounts shall be treated as "guaranteed payments" within the meaning of Code Section 707(c) and shall not be treated as distributions for purposes of computing the Partners' Capital Accounts.

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Section 7.5 *Outside Activities of the General Partner*

The General Partner and its Affiliates shall be permitted to purchase, own, operate, manage and otherwise deal with and profit from any property, real, personal or mixed, not owned by the Partnership for their own account and benefit, whether or not competitive with the business and affairs of the Partnership, and neither the Partnership, any Limited Partner, or any other Person shall have any right, claim, interest or cause of action therein or as a result thereof. Without limiting the generality of the above, nothing in this Agreement shall obligate the General Partner or its Affiliates to first offer the Partnership an opportunity to invest in any investment which has been offered to or found by the General Partner or its Affiliates, whether or not such investment is of a nature that may be invested in by the Partnership or would compete directly or indirectly with the business of the Partnership. The Limited Partners hereby acknowledge that Affiliates of the General Partner currently own a variety of real estate investments and may in the future acquire additional real estate investments that may be competitive with the business of the Partnership. Any Partnership Interests acquired by the General Partner, whether pursuant to the exercise by a Limited Partner of its right to Redemption, or otherwise, shall be automatically converted into Class B Common Units comprised of an identical number of Partnership Units with the same terms as the class or series so acquired.

Section 7.6 *Transactions with Affiliates*

A. The Partnership may lend or contribute funds to, and borrow funds from, Persons in which the Partnership has an equity investment, and such Persons may borrow funds from, and lend or contribute funds to, the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner. The foregoing authority: (i) shall not create any right or benefit in favor of any Person, and (ii) is subject to any applicable limitations under any applicable Federal securities laws.

B. Except as provided in Section 7.5 hereof, the Partnership may transfer assets to joint ventures, limited liability companies, partnerships, corporations, business trusts or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law.

<br> C. The General Partner and its Affiliates may sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, on terms and conditions established by the General Partner in its sole and absolute discretion.

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Section 7.7 *Indemnification*

A. To the fullest extent permitted by applicable law, the Partnership shall indemnify each Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including, without limitation, attorneys' fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership ("*Actions*") as set forth in this Agreement in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise; *provided*, *however*, that the Partnership shall not indemnify an Indemnitee (i) if the act or omission of the Indemnitee was material to the matter giving rise to the Action and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) in the case of any criminal proceeding, if the Indemnitee had reasonable cause to believe that the act or omission was unlawful; or (iii) for any transaction for which such Indemnitee actually received an improper personal benefit in violation or breach of any provision of this Agreement; and *provided*, *further*, that no payments pursuant to this Agreement shall be made by the Partnership to indemnify or advance funds to any Indemnitee (x) with respect to any Action initiated or brought voluntarily by such Indemnitee (and not by way of defense) unless (I) approved or authorized by the General Partner or (II) incurred to establish or enforce such Indemnitee's right to indemnification under this Agreement, and (y) in connection with one or more Actions or claims brought by the Partnership or involving such Indemnitee if such Indemnitee is found liable to the Partnership on any portion of any claim in any such Action.

B. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness. It is the intention of this Section 7.7 that the Partnership indemnify each Indemnitee to the fullest extent permitted by law and this Agreement. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in Section 7.7A. The termination of any proceeding by conviction of an Indemnitee or upon a plea of *nolo contendere* or its equivalent by an Indemnitee, or an entry of an order of probation against an Indemnitee prior to judgment, does not create a presumption that such Indemnitee acted in a manner contrary to that specified in Section 7.7A with respect to the subject matter of such proceeding. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, and neither the General Partner nor any other Holder shall have any obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the Partnership to fund its obligations under this Section 7.7.

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C. To the fullest extent permitted by law, expenses incurred by an Indemnitee who is a party to a proceeding or otherwise subject to or the focus of or is involved in any Action shall be paid or reimbursed by the Partnership as incurred by the Indemnitee in advance of the final disposition of the Action upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 7.7A has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

D. The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee unless otherwise provided in a written agreement with such Indemnitee or in the writing pursuant to which such Indemnitee is indemnified.

E. The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of any of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

F. Any liabilities which an Indemnitee incurs as a result of acting on behalf of the Partnership or the General Partner (whether as a fiduciary or otherwise) in connection with the operation, administration or maintenance of any employee benefit plan or any related trust or funding mechanism (whether such liabilities are in the form of excise taxes assessed by the IRS, penalties assessed by the U.S. Department of Labor, restitutions to such a plan or trust or other funding mechanism or to a participant or beneficiary of such plan, trust or other funding mechanism, or otherwise) shall be treated as liabilities or judgments or fines under this Section 7.7, unless such liabilities arise as a result of (i) an act or omission of such Indemnitee that was material to the matter giving rise to the Action and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) in the case of any criminal proceeding, an act or omission that such Indemnitee had reasonable cause to believe was unlawful, or (iii) any transaction in which such Indemnitee actually received an improper personal benefit in violation or breach of any provision of this Agreement.

<br> G. In no event may an Indemnitee subject any of the Holders to personal liability by reason of the indemnification provisions set forth in this Agreement.

H. An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

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I. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 7.7 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Partnership's liability to any Indemnitee under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

J. Any obligation or liability whatsoever of the General Partner which may arise at any time under this Agreement or any other instrument, transaction, or undertaking contemplated hereby shall be satisfied, if at all, out of the assets of the General Partner or the Partnership only. No such obligation or liability shall be personally binding upon, nor shall resort for the enforcement thereof be had to, any of the General Partner's directors, stockholders, officers, employees, or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise.

K. It is the intent of the parties that any amounts paid by the Partnership to the General Partner pursuant to this Section 7.7 shall be treated as "guaranteed payments" within the meaning of Code Section 707(c) and shall not be treated as distributions for purposes of computing the Partners' Capital Accounts.

Section 7.8 *Liability of the General Partner*

A. To the maximum extent permitted under the Act, the only duties that the General Partner owes to the Partnership, any Partner or any other Person (including any creditor of any Partner or assignee of any Partnership Interest), fiduciary or otherwise, are to perform its contractual obligations as expressly set forth in this Agreement consistently with the obligation of good faith and fair dealing, and to act with the fiduciary duties of care and loyalty which have been, in accordance with the Act, modified as set forth in this Section 7.8. The General Partner, in its capacity as such, shall have no other duty, fiduciary or otherwise, to the Partnership, any Partner or any other Person (including any creditor of any Partner or any assignee of Partnership Interest). The provisions of this Agreement other than this Section 7.8 shall create contractual obligations of the General Partner only, and no such provision shall be interpreted to expand or modify the fiduciary duties of the General Partner under the Act.

B. The Limited Partners agree that (i) the General Partner is acting for the benefit of the Partnership, the Limited Partners and the General Partner's stockholders collectively and (ii) in the event of a conflict between the interests of the Partnership or any Partner, on the one hand, and the separate interests of the General Partner or its stockholders, on the other hand, the General Partner may give priority to the separate interests of the General Partner or the stockholders of the General Partner (including, without limitation, with respect to tax consequences to Limited Partners, Assignees or the General Partner's stockholders). In the event of such a conflict, any action or failure to act on the part of the General Partner that gives priority to the separate interests of the General Partner or its stockholders that does not violate the contract rights of the Limited Partners expressly set forth in this Agreement does not violate the duty of loyalty or any other duty owed by the General Partner to the Partnership and/or the Partners or violate the obligation of good faith and fair dealing.

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C. Subject to its obligations and duties as General Partner set forth in this Agreement and applicable law, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its employees or agents. The General Partner shall not be responsible to the Partnership or any Partner for any misconduct or negligence on the part of any such employee or agent appointed by it in good faith.

D. Any obligation or liability whatsoever of the General Partner which may arise at any time under this Agreement or any other instrument, transaction, or undertaking contemplated hereby shall be satisfied, if at all, out of the assets of the General Partner or the Partnership only. No such obligation or liability shall be personally binding upon, nor shall resort for the enforcement thereof be had to, any of the General Partner's directors, stockholders, officers, employees, or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise. Notwithstanding anything to the contrary set forth in this Agreement, none of the directors or officers of the General Partner shall be directly liable or accountable in damages or otherwise to the Partnership, any Partners, or any Assignees by reason of their service as such. This Agreement is executed by the officers of the General Partner solely as officers of the same and not in their own individual capacities.

E. Notwithstanding anything herein to the contrary, except for liability for fraud, willful misconduct or gross negligence on the part of the General Partner, or pursuant to any express indemnities given to the Partnership by the General Partner pursuant to any other written instrument, the General Partner shall not have any personal liability whatsoever, to the Partnership or to the other Partners, for any action or omission taken in its capacity as the General Partner or for the debts or liabilities of the Partnership or the Partnership's obligations hereunder, except pursuant to Section 15.1. Without limitation of the foregoing, and except for liability for fraud, willful misconduct or gross negligence, or pursuant to Section 15.1 or any such express indemnity, no property or assets of the General Partner, other than its interest in the Partnership, shall be subject to levy, execution or other enforcement procedures for the satisfaction of any judgment (or other judicial process) in favor of any other Partner(s) and arising out of, or in connection with, this Agreement.

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F. In exercising its authority under this Agreement, the General Partner may, but shall be under no obligation to, take into account the tax consequences to any Partner of any action taken (or not taken) by it, and any action or failure to act on the part of the General Partner that does not take into account any such tax consequences that does not result in a violation of the contract rights of the Limited Partners expressly set forth in this Agreement does not violate the duty of loyalty or any other duty owed by the General Partner to the Partnership and/or the Partners or violate the obligation of good faith and fair dealing. The General Partner and the Partnership shall not have any liability to any Partner under any circumstances as a result of any income tax liability incurred by such Partner as a result of an action (or inaction) by the General Partner pursuant to its authority under this Agreement.

G. Whenever in this Agreement the General Partner is permitted or required to make a decision in its "sole and absolute discretion," "sole discretion" or "discretion" or under a grant of similar authority or latitude, the General Partner shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest or factors affecting the Partnership or the Partners or any of them, and any such decision or determination made by the General Partner that does not consider such interests or factors affecting the Partnership of the Partners, or any of them, that does not result in a violation of the contract rights of the Limited Partners expressly set forth in this Agreement, does not violate the duty of loyalty or any other duty owed by the General Partner to the Partnership and/or the Partners or violate the obligation of good faith and fair dealing. If any question should arise with respect to the operation of the Partnership, which is not otherwise specifically provided for in this Agreement or the Act, or with respect to the interpretation of this Agreement, the General Partner is hereby authorized to make a final determination with respect to any such question and to interpret this Agreement in such a manner as it shall deem, in its sole discretion, to be fair and equitable, and its determination and interpretations so made shall be final and binding on all parties. The General Partner's "sole and absolute discretion," "sole discretion" and "discretion" under this Agreement shall be exercised consistently with the duty of care and the obligation of good faith and fair dealing under the Act (as modified by the Agreement).

H. The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. In performing its duties under this Agreement and the Act, the General Partner shall be entitled to rely on the provisions of this Agreement and on any information, opinion, report or statement, including any financial statement or other financial data or the records or books of account of the Partnership or any subsidiary of the Partnership, prepared or presented by any officer, employee or agent of the General Partner, any agent of the Partnership or any such subsidiary, or by any lawyer, certified public accountant, appraiser or other Person engaged by the General Partner, the Partnership or any such subsidiary as to any matter within such Person's professional or expert competence, and any act taken or omitted to be taken in reliance upon any such information, opinion, report or statement as to matters that the General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such information, opinion, report or statement.

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I. Notwithstanding any other provision of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of the General Partner to continue to qualify as a REIT, (ii) for the General Partner otherwise to satisfy the REIT Requirements, (iii) for the General Partner to avoid incurring any taxes under Code Section 857 or Code Section 4981, or (iv) for any General Partner Affiliate to continue to qualify as a "qualified REIT subsidiary"(within the meaning of Code Section 856(i)(2)) or "taxable REIT subsidiary"(within the meaning of Code Section 856(l)), is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners and does not violate the duty of loyalty or any other duty or obligation, fiduciary or otherwise, of the General Partner to the Partnership or any other Partner.

J. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner's and its officers' and directors' liability to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

Section 7.9 *Title to Partnership Assets*

Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively with other Partners or Persons, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner or such nominee or Affiliate for the use and benefit of the Partnership in accordance with the provisions of this Agreement. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.

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Section 7.10 *Reliance by Third Parties*

Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority, without the consent or approval of any other Partner, or Person, to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and take any and all actions on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if it were the Partnership's sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing. In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expediency of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

#### ARTICLE 8

#### RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 *Limitation of Liability*

No Limited Partner shall have any liability under this Agreement except for intentional harm or gross negligence on the part of such Limited Partner or as expressly provided in this Agreement (including, without limitation, Section 10.4 hereof) or under the Act.

Section 8.2 *Management of Business*

Subject to the rights and powers of the General Partner hereunder, no Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any officer, director, member, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, member, employee, partner, agent, representative, or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.

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Section 8.3 *Outside Activities of Limited Partners*

Subject to any agreements entered into pursuant to Section 7.6 hereof and any other agreements entered into by a Limited Partner or any of its Affiliates with the General Partner, the Partnership or a Subsidiary (including, without limitation, any employment agreement), any Limited Partner and any Assignee, officer, director, employee, agent, trustee, Affiliate, member or stockholder of any Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities that are in direct or indirect competition with the Partnership or that are enhanced by the activities of the Partnership. Neither the Partnership nor any Partner shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee. Subject to such agreements, none of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person, and such Person shall have no obligation pursuant to this Agreement, subject to Section 7.6 hereof and any other agreements entered into by a Limited Partner or its Affiliates with the General Partner, the Partnership or a Subsidiary, to offer any interest in any such business ventures to the Partnership, any Limited Partner, or any such other Person, even if such opportunity is of a character that, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such Person. In deciding whether to take any actions in such capacity, the Limited Partners and their respective Affiliates shall be under no obligation to consider the separate interests of the Partnership or its subsidiaries and to the maximum extent permitted by applicable law shall have no fiduciary duties or similar obligations to the Partnership or any other Partners, or to any subsidiary of the Partnership, and shall not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by the other Partners in connection with such acts except for liability for fraud, willful misconduct or gross negligence.

Section 8.4 *Return of Capital*

Except pursuant to the rights of Redemption set forth in Section 15.1 hereof or in any Partnership Unit Designation, no Limited Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon dissolution of the Partnership as provided herein. Except to the extent provided in Article 5 and Article 6 hereof or otherwise expressly provided in this Agreement or in any Partnership Unit Designation, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions or as to profits, losses or distributions.

Section 8.5 *Rights of Limited Partners Relating to the Partnership*

A. In addition to other rights provided by this Agreement or by the Act, and except as limited by Section 8.5C hereof, the General Partner shall deliver to each Limited Partner a copy of any information mailed or electronically delivered to all of the common stockholders of the General Partner as soon as practicable after such mailing.

B. The Partnership shall notify any Limited Partner that is a Qualifying Party, on request, of the then current Adjustment Factor and any change made to the Adjustment Factor shall be set forth in the quarterly report required by Section 9.3B hereof immediately following the date such change becomes effective.

C. Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners (or any of them), for such period of time as the General Partner determines in its sole and absolute discretion to be reasonable, any information that (i) the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or the General Partner or (ii) the Partnership or the General Partner is required by law or by agreement to keep confidential.

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D. Upon written request by any Limited Partner, the General Partner shall cause the ownership of Partnership Units by such Limited Partner to be evidenced by a certificate for units in such form as the General Partner may determine with respect to any class of Partnership Units issued from time to time under this Agreement. Any officer of the General Partner may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Partnership alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the Person claiming the certificate to be lost, destroyed, stolen or mutilated. Unless otherwise determined by an officer of the General Partner, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Partnership a bond in such sums as the General Partner may direct as indemnity against any claim that may be made against the Partnership.

Section 8.6 *Partnership Right to Call Partnership Units*

Notwithstanding any other provision of this Agreement, on and after the date on which the aggregate Percentage Interests of the Common Units held by Limited Partners are less than one percent (1%) of the aggregate percentage Interests of all Partners holding Common Units, the Partnership shall have the right, but not the obligation, from time to time and at any time to redeem any and all outstanding Common Units by treating any Holder thereof as a Tendering Party who has delivered a Notice of Redemption pursuant to Section 15.1 hereof for the amount of Common Units to be specified by the General Partner, by notice to such Holder that the Partnership has elected to exercise its rights under this Section 8.6. Such notice given by the General Partner to a Holder pursuant to this Section 8.6 shall be treated as if it were a Notice of Redemption delivered to the General Partner by such Holder. For purposes of this Section 8.6, (a) the General Partner may treat any Holder (whether or not otherwise a Qualifying Party) as a Qualifying Party that is a Tendering Party and (b) the provisions of Sections 15.1F(2) and 15.1F(3) hereof shall not apply, but the remainder of Section 15.1 hereof shall apply, mutatis mutandis.

Section 8.7 *Rights as Objecting Partner*

No Limited Partner and no Holder of a Partnership Interest shall be entitled to exercise any of the rights of an objecting stockholder provided for under Act or Maryland General Corporation Law or any successor statute in connection with a merger of the Partnership.

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#### ARTICLE 9

#### BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 *Records and Accounting*

A. The General Partner shall keep or cause to be kept at the principal place of business of the Partnership those records and documents, if any, required to be maintained by the Act and any other books and records deemed by the General Partner to be appropriate with respect to the Partnership's business, including, without limitation, all books and records necessary to provide to the Limited Partners any information, lists and copies of documents required to be provided pursuant to Section 8.5A, Section 9.3 or Article 13 hereof. Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on any information storage device, provided that the records so maintained are convertible into clearly legible written form within a reasonable period of time.

B. The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles, or on such other basis as the General Partner determines to be necessary or appropriate. To the extent permitted by sound accounting practices and principles, the Partnership and the General Partner may operate with integrated or consolidated accounting records, operations and principles.

Section 9.2 *Partnership Year*

For purposes of this Agreement, "Partnership Year" means the fiscal year of the Partnership, which shall be the same as the fiscal year of the General Partner. The tax year shall be the calendar year unless otherwise required by the Code.

Section 9.3 *Reports*

A. As soon as practicable, but in no event later than one hundred five (105) days after the close of each Partnership Year, the General Partner shall cause to be mailed to each Limited Partner of record as of the close of the Partnership Year, financial statements of the Partnership, or of the General Partner if such statements are prepared solely on a consolidated basis with the General Partner, for such Partnership Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized firm of independent public accountants selected by the General Partner.

B. As soon as practicable, but in no event later than sixty (60) days after the close of each calendar quarter (except the last calendar quarter of each year), the General Partner shall cause to be mailed to each Limited Partner of record as of the last day of the calendar quarter, a report containing unaudited financial statements of the Partnership for such calendar quarter, or of the General Partner if such statements are prepared solely on a consolidated basis with the General Partner, and such other information as may be required by applicable law or regulation or as the General Partner determines to be appropriate.

C. The General Partner shall have satisfied its obligations under Section 9.3A and Section 9.3B by posting or making available the reports required by this Section 9.3 on the website maintained from time to time by the Partnership or the General Partner, provided that such reports are able to be printed or downloaded from such website.

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#### ARTICLE 10

#### TAX MATTERS
Section 10.1 *Preparation of Tax Returns*

The General Partner shall arrange for the preparation and timely filing of all returns with respect to Partnership income, gains, deductions, losses and other items required of the Partnership for Federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by Limited Partners for Federal and state income tax and any other tax reporting purposes. The Limited Partners shall promptly provide the General Partner with such information relating to the Contributed Properties as is readily available to the Limited Partners, including tax basis and other relevant information, as may be reasonably requested by the General Partner from time to time.

Section 10.2 *Tax Elections*

Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code, including, but not limited to, the election under Code Section 754. The General Partner shall have the right to seek to revoke any such election (including, without limitation, any election under Code Section 754) upon the General Partner's determination in its sole and absolute discretion that such revocation is in the best interests of the Partners.

Section 10.3 *Tax Administrative Matters*

A. Effective as of the date that the BBA Partnership Audit Rules are first applicable to the Partnership, the General Partner shall be designated the "partnership representative" as defined in Section 6223 of the Code, as amended by the Budget Act (the "Partnership Representative") and the Partnership Representative from time to time shall name the designated individual under Prop. Reg. § 301.6223-1(b)(3)(i) (or comparable concept or position under other applicable law) for each of the Partnership's taxable years, and shall have the power to remove any designated individual. The Partnership Representative is authorized and required to represent the Partnership (at the Partnership's expense) in all disputes, controversies or proceedings with the Internal Revenue Service, and, in its sole discretion, is authorized to make any available election with respect to the BBA Partnership Audit Rules and take any action it deems necessary or appropriate to comply with the requirements of the Code and to conduct the Partnership's affairs with respect to the BBA Partnership Audit Rules. Each Partner and former Partner will cooperate fully with the Partnership Representative with respect to any such disputes, controversies or proceedings with the Internal Revenue Service, including providing the Partnership Representative with any information reasonably requested to comply with and make elections under the BBA Partnership Audit Rules. The Partnership Representative may be replaced from time to time by the General Partner.

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B. If the Partnership Representative determines in its sole discretion, (i) the Partnership Representative may cause the Partnership to elect out of the BBA Partnership Audit Rules under Code Section 6221(b) (as amended by the Budget Act), (ii) the Partnership Representative may cause the Partnership to push out the final partnership adjustments to the Partners as described in Code Section 6226(a) (as amended by the Budget Act), or (iii) the Partnership Representative may cause the liability to be paid at the Partnership level.

C. Each Partner agrees to indemnify and hold harmless the Partnership from and against any liability with respect to such Partner's proportionate share of any tax liability (including related interest and penalties) imposed at the Partnership level in connection with a Partnership-level tax audit of a taxable period during which such Partner was a Partner of the Partnership, regardless of whether such Partner is a partner of the Partnership in the year in which such tax is actually imposed on the Partnership or becomes payable by the Partnership as a result of such audit. The General Partner shall reasonably determine a Partner's proportionate share of any such tax liability, taking into account the relevant facts and any information provided by such Partner that would reduce such liability. The Partnership may offset a Partner's share of any such tax liabilities against any Distribution. If not offset against a Distribution, the General Partner may deliver a written demand for payment to such Partner to pay the Partnership in immediately available funds the amount that the General Partner determines is needed by the Partnership to discharge those obligations and to otherwise pay and reimburse, indemnify and hold the Partnership harmless with respect to such tax liability. If such a Partner fails to timely make the full amount of the required payment to the Partnership as directed by the General Partner, such Partner shall pay the Partnership interest at the Default Rate, on the amount under this Section 10.3 that such Partner fails to timely pay. Any amount paid by (or any Distribution retained from) a Partner under this Section 10.3 will not be treated as a Capital Contribution or otherwise added to the Partner's Capital Account, except to the extent (if at all) the General Partner determines that characterization or treatment is necessary or appropriate.

D. A Partner's cooperation and indemnification obligations pursuant to this Section 10.3 shall survive the termination of a Partner's participation in the Partnership and the termination, dissolution and winding up of the Partnership. A Partner's obligations under this Section 10.3 will survive the liquidation, termination or other Transfer of all or any portion of the Partner's Units and the dissolution, liquidation, winding up and termination of the Partnership. The Partnership, the General Partner and the other Partners may pursue and enforce all rights and remedies that they may have against a Partner (including any former Partner) under this Agreement, including instituting a proceeding to collect any payments they are owed under this Section 10.3 with interest at the Default Rate, and exercising any other remedies they may have under this Agreement or applicable law.

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E. The Partners specifically acknowledge, without limiting the general applicability of this Section 10.3, that the General Partner or the Partnership Representative shall not be liable, responsible or accountable in damages or otherwise to the Partnership or any Partner with respect to any action taken by him in this capacity. All out of pocket expenses incurred by the General Partner or the Partnership Representative in this capacity shall be considered expenses of the Partnership for which the General Partner or the Partnership Representative shall be entitled to full reimbursement.

Section 10.4 *Withholding*

Each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Limited Partner any amount of Federal, state, local or foreign taxes that the General Partner determines the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Limited Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Code Section 1441, Code Section 1442, Code Section 1445 or Code Section 1446. Any amount withheld with respect to a Limited Partner pursuant to this Section 10.4 shall be treated as paid or distributed, as applicable, to such Limited Partner for all purposes under this Agreement. Any amount paid on behalf of or with respect to a Limited Partner, in excess of any such withheld amount, shall constitute a loan by the Partnership to such Limited Partner, which loan shall be repaid by such Limited Partner within thirty (30) days after the affected Limited Partner receives written notice from the General Partner that such payment must be made, provided that the Limited Partner shall not be required to repay such deemed loan if either (i) the Partnership withholds such payment from a distribution that would otherwise be made to the Limited Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the Available Cash of the Partnership that would, but for such payment, be distributed to the Limited Partner. Any amounts payable by a Limited Partner hereunder shall bear interest at the Default Rate from the date such amount is due (i.e., thirty (30) days after the Limited Partner receives written notice of such amount) until such amount is paid in full.

Section 10.5 *Organizational Expenses*

The General Partner may cause the Partnership to elect to deduct expenses, if any, incurred by it in organizing the Partnership ratably over a 180-month period as provided in Section 709 of the Code.

#### ARTICLE 11

#### PARTNER TRANSFERS AND WITHDRAWALS
Section 11.1 *Transfer*

A. No part of the interest of a Partner shall be subject to the claims of any creditor, to any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement.

B. No Partnership Interest shall be Transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11. Any Transfer or purported Transfer of a Partnership Interest not made in accordance with this Article 11 shall be null and void *ab initio*.

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C. No Transfer of any Partnership Interest may be made to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan constitutes a Nonrecourse Liability, without the Consent of the General Partner; *provided*, *however*, that, as a condition to such Consent, the lender may be required to enter into an arrangement with the Partnership and the General Partner to redeem or exchange for the REIT Shares Amount any Partnership Units in which a security interest is held by such lender simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code (provided that, for purpose of calculating the REIT Shares Amount in this Section 11.1C, "*Tendered Units*" shall mean all such Partnership Units in which a security interest is held by such lender).

Section 11.2 *Transfer of General Partner's Partnership Interest*

A. Subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, the General Partner may not Transfer all or any portion of its Partnership Interest (whether by sale, disposition, statutory merger or consolidation, liquidation or otherwise) unless: (i) coincident with such Transfer, the transferee is admitted as a General Partner pursuant to Section 12.1 hereof; (ii) the transferee assumes, by operation of law or express agreement, all of the obligations of the transferor General Partner under this Agreement with respect to such Transferred Partnership Interest; and (iii) the transferee has executed such instruments as may be necessary to effectuate such admission and to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement with respect to the Partnership Interest so acquired and the admission of such transferee as a General Partner.

B. Except in connection with Transfers permitted in this Article 11 and as otherwise provided in Section 12.1 in connection with the Transfer of the General Partner's entire Partnership Interest, the General Partner may not voluntarily withdraw as a general partner of the Partnership without the Consent of the Class A Limited Partners.

Section 11.3 *Limited Partners' Rights to Transfer*

A. *General*. Except as provided in Section 11.1C hereof, each Limited Partner shall have the right to Transfer all or any portion of its Partnership Interest to any Person, without the Consent of the General Partner but subject to the provisions of Section 11.4 hereof and to satisfaction of each of the following conditions:

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<sup>(1)</sup> *General Partner Right of First Refusal*. The transferor Limited Partner (or the Partner's estate in the event of the Partner's death) shall give written notice of the proposed Transfer to the General Partner, which notice shall state (i) the identity and address of the proposed transferee and (ii) the amount and type of consideration proposed to be received for the Transferred Partnership Units. The General Partner shall have ten (10) Business Days upon which to give the transferor Limited Partner notice of its election to acquire the Partnership Units on the terms set forth in such notice. If it so elects, it shall purchase the Partnership Units on such terms within ten (10) Business Days after giving notice of such election; *provided*, *however*, that in the event that the proposed terms involve a purchase for cash, the General Partner may at its election deliver in lieu of all or any portion of such cash a note from the General Partner payable to the transferor Limited Partner at a date as soon as reasonably practicable, but in no event later than one hundred eighty (180) days after such purchase, and bearing interest at an annual rate equal to the total dividends declared with respect to one (1) REIT Share for the twelve (12) preceding months of the General Partner, divided by the Value as of the closing of such purchase; and *provided*, *further*, that such closing may be deferred to the extent necessary to effect compliance with the Hart-Scott-Rodino Act, if applicable, and any other applicable requirements of law. If it does not so elect, the transferor Limited Partner may Transfer such Partnership Units to a third party, on terms no more favorable to the transferee than the proposed terms, subject to the other conditions of this Section 11.3.<br>

<sup>(2)</sup> *Accredited Investor*. Any Transfer of a Partnership Interest shall be made only to a single Accredited Investor; *provided*, *however*, that, for such purposes, all Accredited Investors that are Affiliates, or that comprise investment accounts or funds managed by a single Accredited Investor and its Affiliates, shall be considered together to be a single Accredited Investor; and *provided*, *further*, that each Transfer meeting the minimum Transfer restriction of Section 11.3A(4) hereof may be to a separate Accredited Investor.<br>

<sup>(3)</sup> *Opinion of Counsel*. The transferor Limited Partner shall deliver or cause to be delivered to the General Partner an opinion of counsel reasonably satisfactory to it to the effect that the proposed Transfer may be effected without registration under the Securities Act and will not otherwise violate the registration provisions of the Securities Act and the regulations promulgated thereunder or violate any state securities laws or regulations applicable to the Partnership or the Partnership Interests Transferred; *provided*, *however*, that the General Partner may, in its sole discretion, waive this condition upon the request of the transferor Limited Partner. If, in the opinion of such counsel, such Transfer would require the filing of a registration statement under the Securities Act or would otherwise violate any Federal or state securities laws or regulations applicable to the Partnership or the Partnership Units, the General Partner may prohibit any Transfer otherwise permitted under this Section 11.3 by a Limited Partner of Partnership Interests.<br>

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<sup>(4)</sup> *Minimum Transfer Restriction*. Any Transferring Partner must Transfer not less than the lesser of (i) five hundred (500) Partnership Units or (ii) all of the remaining Partnership Units owned by such Transferring Partner, without, in each case, the Consent of the General Partner; *provided*, *however*, that, for purposes of determining compliance with the foregoing restriction, all Partnership Units owned by Affiliates of a Limited Partner shall be considered to be owned by such Limited Partner.<br>

<sup>(5)</sup> *Exception for Permitted Transfers*. The conditions of Sections 11.3A(1) through 11.3A(4) hereof shall not apply in the case of a Transfer of all or part of a Limited Partner's Interest to any Family Member (including a Transfer by a Family Member that is an inter vivos or testamentary trust (whether revocable or irrevocable) to a Family Member that is a beneficiary of such trust), any Charity, any Controlled Entity or any Affiliate (any Transfer permitted by this paragraph is hereinafter referred to as a "*Permitted Transfer*").<br>

It is a condition to any Transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such Transferred Partnership Interest, and no such Transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Partner are assumed by a successor corporation by operation of law) shall relieve the transferor Partner of its obligations under this Agreement without the Consent of the General Partner. Notwithstanding the foregoing, any transferee of any Transferred Partnership Interest shall be subject to any restrictions on ownership and transfer of stock of the General Partner contained in the Charter that may limit or restrict such transferee's ability to exercise its Redemption rights, including, without limitation, the Ownership Limit. Any transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the obligations of the transferor hereunder. Unless admitted as a Substituted Limited Partner, no transferee, whether by a voluntary Transfer, by operation of law or otherwise, shall have any rights hereunder, other than the rights of an Assignee as provided in Section 11.5 hereof.

B. *Incapacity*. If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator or receiver of such Limited Partner's estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of settling or managing the estate, and such power as the Incapacitated Limited Partner possessed to Transfer all or any part of its interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.

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C. *Adverse Tax Consequences*. Notwithstanding anything to the contrary in this Agreement, the General Partner shall have the authority (but shall not be required) to take any steps it determines are necessary or appropriate in its sole and absolute discretion to prevent the Partnership from being taxable as a corporation for Federal income tax purposes. In furtherance of the foregoing, except with the Consent of the General Partner, no Transfer by a Limited Partner of its Partnership Interests (including any Redemption, any acquisition of Partnership Units by the General Partner or any acquisition of Partnership Units by the Partnership) may be made to or by any Person if such Transfer could (i) result in the Partnership being treated as an association taxable as a publicly traded partnership or corporation; (ii) be treated as effectuated through an "established securities market" or a "secondary market (or the substantial equivalent thereof)" within the meaning of Code Section 7704 and the Regulations promulgated thereunder, (iii) result in the Partnership being unable to qualify for one or more of the "safe harbors" set forth in Regulations Section 1.7704-1 (or such other guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as "readily tradable on a secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code) (the "*Safe Harbors*") or (iv) based on the advice of counsel to the Partnership or the General Partner, adversely affect the ability of the General Partner to continue to qualify as a REIT or subject the General Partner to any additional taxes under Code Section 857 or Code Section 4981.

Section 11.4 *Admission of Substituted Limited Partners*

A. No Limited Partner shall have the right to substitute a transferee (including any transferees pursuant to Transfers permitted by Section 11.3 hereof) as a Limited Partner in its place. A transferee of a Limited Partner Interest may be admitted as a Substituted Limited Partner only with the Consent of the General Partner. The failure or refusal by the General Partner to permit a transferee of any such interests to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership or the General Partner. Subject to the foregoing, an Assignee shall not be admitted as a Substituted Limited Partner until and unless it furnishes to the General Partner (i) evidence of acceptance, in form and substance satisfactory to the General Partner, of all the terms, conditions and applicable obligations of this Agreement, (ii) a counterpart signature page to this Agreement executed by such Assignee and (iii) such other documents and instruments as the General Partner may require in its sole discretion to effect such Assignee's admission as a Substituted Limited Partner.

B. Concurrently with, and as evidence of, the admission of a Substituted Limited Partner, the General Partner shall update the Register and the books and records of the Partnership to reflect the name, address and number and class and/or series of Partnership Units of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and number of Partnership Units of the predecessor of such Substituted Limited Partner.

<br> C. A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement.

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Section 11.5 *Assignees*

If the General Partner does not Consent to the admission of any permitted transferee under Section 11.3 hereof as a Substituted Limited Partner, as described in Section 11.4 hereof, or in the event that any Partnership Interest is deemed to have been Transferred notwithstanding the restrictions set forth in this Article 11, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a Limited Partner Interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses and other items of income, gain, loss, deduction and credit of the Partnership attributable to the Partnership Interest assigned to such transferee and the rights to Transfer the Partnership Interest provided in this Article 11, but shall not be deemed to be a holder of a Partnership Interest for any other purpose under this Agreement (other than as expressly provided in Section 15.1 hereof with respect to a Qualifying Party that becomes a Tendering Party), and shall not be entitled to effect a Consent or vote with respect to such Partnership Interest on any matter presented to the Partners for approval (such right to Consent or vote, to the extent provided in this Agreement or under the Act, fully remaining with the transferor Limited Partner). In the event that any such transferee desires to make a further Transfer of any such Partnership Interest, such transferee shall be subject to all the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make a Transfer of a Limited Partner Interest.

Section 11.6 *General Provisions*

A. No Limited Partner may withdraw from the Partnership other than as a result of: (i) a Permitted Transfer of all of such Limited Partner's Partnership Interest in accordance with this Article 11 with respect to which the transferee becomes a Substituted Limited Partner; (ii) pursuant to a redemption (or acquisition by the General Partner) of all of its Partnership Interest pursuant to a Redemption under Section 15.1 hereof and/or pursuant to any Partnership Unit Designation or (iii) the acquisition by the General Partner of all of such Limited Partner's Partnership Interest, whether or not pursuant to Section 15.1B hereof.

B. Any Limited Partner who shall Transfer all of its Partnership Units in a Transfer (i) permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of its rights to effect a redemption of all of its Partnership Units pursuant to a Redemption under Section 15.1 hereof and/or pursuant to any Partnership Unit Designation or (iii) to the General Partner, whether or not pursuant to Section 15.1B hereof, shall cease to be a Limited Partner.

C. If any Partnership Unit is Transferred in compliance with the provisions of this Article 11, or is redeemed by the Partnership, or acquired by the General Partner pursuant to Section 15.1 hereof, on any day other than the first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items of income, gain, loss, deduction and credit attributable to such Partnership Unit for such Partnership Year shall be allocated to the transferor Partner or the Tendering Party (as the case may be) and, in the case of a Transfer other than a Redemption, to the transferee Partner, by taking into account their varying interests during the Partnership Year in accordance with Code Section 706(d), using the "interim closing of the books" method or another permissible method selected by the General Partner in its sole and absolute discretion. Solely for purposes of making such allocations, unless the General Partner decides in its sole and absolute discretion to use another method permitted under the Code, each of such items for the calendar month in which a Transfer occurs shall be allocated to the transferee Partner and none of such items for the calendar month in which a Transfer or a Redemption occurs shall be allocated to the transferor Partner, or the Tendering Party (as the case may be) if such Transfer occurs on or before the fifteenth (15th) day of the month, otherwise such items shall be allocated to the transferor. All distributions of Available Cash attributable to such Partnership Unit with respect to which the Partnership Record Date is before the date of such Transfer, assignment or Redemption shall be made to the transferor Partner or the Tendering Party (as the case may be) and, in the case of a Transfer other than a Redemption, all distributions of Available Cash thereafter attributable to such Partnership Unit shall be made to the transferee Partner.

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D. In addition to any other restrictions on Transfer herein contained, in no event may any Transfer of a Partnership Interest by any Partner (including any Redemption, any acquisition of Partnership Units by the General Partner or any other acquisition of Partnership Units by the Partnership) be made: (i) to any Person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) except with the Consent of the General Partner, of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) in the event that such Transfer could cause either the General Partner or any General Partner Affiliate to cease to comply with the REIT Requirements or to cease to qualify as a "qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)); (v) if such Transfer could, based on the advice of legal counsel to the Partnership or the General Partner, cause the Partnership to cease to be classified as a partnership for federal income tax purposes (except as a result of the Redemption (or acquisition by the General Partner) of all Common Units held by all Limited Partners); (vi) if such Transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a "party-in-interest" (as defined in ERISA Section 3(14)) or a "disqualified person" (as defined in Code Section 4975(c)); (vii) if such Transfer could, based on the advice of legal counsel to the Partnership or the General Partner, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.3-101; (viii) if such Transfer requires the registration of such Partnership Interest pursuant to any applicable Federal or state securities laws; (ix) except with the Consent of the General Partner, if such Transfer could (1) be treated as effectuated through an "established securities market" or a "secondary market" (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code and the Regulations promulgated thereunder, (2) cause the Partnership to become a "publicly traded partnership," as such term is defined in Sections 469(k)(2) or 7704(b) of the Code, (3) be in violation of Section 3.4C(iii) or (4) cause the Partnership to fail one or more of the Safe Harbors; (x) if such Transfer causes the Partnership (as opposed to the General Partner) to become a reporting company under the Exchange Act; or (xii) if such Transfer subjects the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended. The General Partner shall, in its sole discretion, be permitted to take all action necessary to prevent the Partnership from being classified as a "publicly traded partnership" under Code Section 7704.

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<br> E. Transfers pursuant to this Article 11 may only be made on the first day of a fiscal quarter of the Partnership, unless the General Partner otherwise Consents.

#### ARTICLE 12

#### ADMISSION OF PARTNERS
Section 12.1 *Admission of Successor General Partner*

A successor to all of the General Partner's Class B Common Units pursuant to a Transfer permitted by Section 11.2 hereof who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective immediately upon such Transfer. Upon any such Transfer and the admission of any such transferee as a successor General Partner in accordance with this Section 12.1, the transferor General Partner shall be relieved of its obligations under this Agreement and shall cease to be a general partner of the Partnership without any separate Consent of the Class A Limited Partners or the consent or approval of any other Partners. Any such successor General Partner shall carry on the business and affairs of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission of such Person as a General Partner. Upon any such Transfer, the transferee shall become the successor General Partner for all purposes herein, and shall be vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the General Partner. Concurrently with, and as evidence of, the admission of a successor General Partner, the General Partner shall update the Register and the books and records of the Partnership to reflect the name, address and number and classes and/or series of Partnership Units of such successor General Partner. In the event that the General Partner withdraws from the Partnership, or transfers its entire Partnership Interest, in violation of this Agreement, or otherwise dissolves or terminates or ceases to be the general partner of the Partnership, a Majority in Interest of the Partners may elect to continue the Partnership by selecting a successor general partner in accordance with Section 13.1A hereof.

Section 12.2 *Admission of Additional Limited Partners*

A. A Person (other than an existing Partner) who makes a Capital Contribution to the Partnership in exchange for Partnership Units and in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance, in form and substance satisfactory to the General Partner, of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.4 hereof, (ii) a counterpart signature page to this Agreement executed by such Person and (iii) such other documents or instruments as the General Partner may require in its sole and absolute discretion in order to effect such Person's admission as an Additional Limited Partner. Concurrently with, and as evidence of, the admission of an Additional Limited Partner, the General Partner shall update the Register and the books and records of the Partnership to reflect the name, address and number and classes and/or series of Partnership Units of such Additional Limited Partner.

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B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the Consent of the General Partner. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the Consent of the General Partner to such admission and the satisfaction of all the conditions set forth in Section 12.2A.

C. If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items of income, gain, loss, deduction and credit allocable among Holders for such Partnership Year shall be allocated among such Additional Limited Partner and all other Holders by taking into account their varying interests during the Partnership Year in accordance with Code Section 706(d), using the "interim closing of the books" method or another permissible method selected by the General Partner. Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of any Additional Limited Partner occurs shall be allocated among all the Holders including such Additional Limited Partner, in accordance with the principles described in Section 11.6C hereof. All distributions of Available Cash with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees other than the Additional Limited Partner, and all distributions of Available Cash thereafter shall be made to all the Partners and Assignees including such Additional Limited Partner.

D. Any Additional Limited Partner admitted to the Partnership that is an Affiliate of the General Partner shall be deemed to be a "General Partner Affiliate" hereunder and shall be reflected as such on <u>the Register</u> and the books and records of the Partnership.

Section 12.3 *Amendment of Agreement and Certificate of Limited Partnership*

For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to update the Register, amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.4 hereof.

Section 12.4 *Limit on Number of Partners*

Unless otherwise permitted by the General Partner in its sole and absolute discretion, no Person shall be admitted to the Partnership as an Additional Limited Partner if the effect of such admission would be to cause the Partnership to have a number of Partners that would cause the Partnership to become a reporting company under the Exchange Act.

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Section 12.5 *Admission*

A Person shall be admitted to the Partnership as a limited partner of the Partnership or a general partner of the Partnership only upon strict compliance, and not upon substantial compliance, with the requirements set forth in this Agreement for admission to the Partnership as a Limited Partner or a General Partner.

#### ARTICLE 13

#### DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 *Dissolution*

The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General Partner, any successor General Partner shall continue the business and affairs of the Partnership without dissolution. However, the Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following (each a "*Liquidating Event*"):

A. an event of withdrawal, as defined in Section 10-402(2) – (9) of the Act (including, without limitation, bankruptcy), or the withdrawal in violation of this Agreement, of the last remaining General Partner unless, within ninety (90) days after the withdrawal, a Majority in Interest of the Partners remaining agree in writing, in their sole and absolute discretion, to continue the Partnership and to the appointment, effective as of the date of such withdrawal, of a successor General Partner;

<br> B. an election to dissolve the Partnership made by the General Partner in its sole and absolute discretion, with or without the Consent of the Partners;

<br> C. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act; or

<br> D. the Redemption or other acquisition by the Partnership or the General Partner of all Partnership Units other than Partnership Units held by the General Partner.

Section 13.2 *Winding Up*

A. Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Holders. After the occurrence of a Liquidating Event, no Holder shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership's business and affairs. The General Partner (or, in the event that there is no remaining General Partner or the General Partner has dissolved, become bankrupt within the meaning of the Act or ceased to operate, any Person elected by a Majority in Interest of the Partners (the General Partner or such other Person being referred to herein as the "*Liquidator*")) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership's liabilities and property, and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include shares of stock in the General Partner) shall be applied and distributed in the following order:

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<br> (1) First, to the satisfaction of all of the Partnership's debts and liabilities to creditors other than the Holders (whether by payment or the making of reasonable provision for payment thereof);

<sup>(2)</sup> Second, to the satisfaction of all of the Partnership's debts and liabilities to the General Partner (whether by payment or the making of reasonable provision for payment thereof), including, but not limited to, amounts due as reimbursements under Section 7.4 hereof;<br>

<br> (3) Third, to the satisfaction of all of the Partnership's debts and liabilities to the other Holders (whether by payment or the making of reasonable provision for payment thereof); and

<sup>(4)</sup> Fourth, to the Partners in accordance with their positive Capital Account balances, determined after taking into account all Capital Account adjustments for all prior periods and the Partnership taxable year during which the liquidation occurs (other than those made as a result of the liquidating distribution set forth in this Section 13.2A(4)).<br>

The General Partner shall not receive any additional compensation for any services performed pursuant to this Article 13 other than reimbursement of its expenses as set forth in Section 7.4.

B. Notwithstanding the provisions of Section 13.2A hereof that require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership, the Liquidator determines that an immediate sale of part or all of the Partnership's assets would be impractical or would cause undue loss to the Holders, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Holders as creditors) and/or distribute to the Holders, in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2A hereof, undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Holders, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.

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C. If any Holder has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation occurs), except as otherwise agreed to by such Holder, such Holder shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever.

<br> D. In the sole and absolute discretion of the General Partner or the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Holders pursuant to this Article 13 may be:

<sup>(1)</sup> distributed to a trust established for the benefit of the General Partner and the Holders for the purpose of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership and/or Partnership activities. The assets of any such trust shall be distributed to the Holders, from time to time, in the discretion of the General Partner, in the same proportions and amounts as would otherwise have been distributed to the Holders pursuant to this Agreement; or<br>

<sup>(2)</sup> withheld or escrowed to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership, provided that such withheld or escrowed amounts shall be distributed to the Holders in the manner and order of priority set forth in Section 13.2A hereof as soon as practicable.<br>

<br> E. The provisions of Section 7.8 hereof shall apply to any Liquidator appointed pursuant to this Article 13 as though the Liquidator were the General Partner of the Partnership.

Section 13.3 *Deemed Contribution and Distribution*

Notwithstanding any other provision of this Article 13, in the event that the Partnership is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the Partnership's Property shall not be liquidated, the Partnership's liabilities shall not be paid or discharged and the Partnership's affairs shall not be wound up. Instead, for federal income tax purposes the Partnership shall be deemed to have contributed all of its assets and liabilities to a new partnership in exchange for an interest in the new partnership; and immediately thereafter, distributed Partnership Units to the Partners in the new partnership in accordance with their respective Capital Accounts in liquidation of the Partnership, and the new partnership is deemed to continue the business of the Partnership. Nothing in this Section 13.3 shall be deemed to have constituted a Transfer to an Assignee as a Substituted Limited Partner without compliance with the provisions of Section 11.4 or Section 13.3 hereof.

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Section 13.4 *Rights of Holders*

Except as otherwise provided in this Agreement and subject to the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, (a) each Holder shall look solely to the assets of the Partnership for the return of its Capital Contribution, (b) no Holder shall have the right or power to demand or receive property other than cash from the Partnership and (c) no Holder shall have priority over any other Holder as to the return of its Capital Contributions, distributions or allocations.

Section 13.5 *Notice of Dissolution*

In the event that a Liquidating Event occurs or an event occurs that would, but for an election or objection by one or more Partners pursuant to Section 13.1 hereof, result in a dissolution of the Partnership, the General Partner or Liquidator shall, within thirty (30) days thereafter, provide written notice thereof to each Holder and, in the General Partner's or Liquidator's sole and absolute discretion or as required by the Act, to all other parties with whom the Partnership regularly conducts business (as determined in the sole and absolute discretion of the General Partner or Liquidator), and the General Partner or Liquidator may, or, if required by the Act, shall, publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the sole and absolute discretion of the General Partner or Liquidator).

Section 13.6 *Cancellation of Certificate of Limited Partnership*

Upon the completion of the liquidation of the Partnership cash and property as provided in Section 13.2 hereof, the Partnership shall be terminated, a certificate of cancellation shall be filed with the **Delaware Division of Corporations**, all qualifications of the Partnership as a foreign limited partnership or association in jurisdictions other than the **State of Delaware** shall be cancelled, and such other actions as may be necessary to terminate the Partnership shall be taken.

Section 13.7 *Reasonable Time for Winding-Up*

A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2 hereof, in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between and among the Partners during the period of liquidation; provided, however, reasonable efforts shall be made to complete such winding-up within twenty-four (24) months after the adoption of a plan of liquidation of the General Partner, as provided in Section 562(b)(1)(B) of the Code, if necessary, in the sole and absolute discretion of the General Partner.

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#### ARTICLE 14

#### PROCEDURES FOR ACTIONS AND CONSENTS

#### OF PARTNERS; AMENDMENTS; MEETINGS
Section 14.1 *Procedures for Actions and Consents of Partners*

The actions requiring Consent of any Partner or Partners pursuant to this Agreement, including Section 7.3 hereof, or otherwise pursuant to applicable law, are subject to the procedures set forth in this Article 14.

Section 14.2 *Amendments*

Amendments to this Agreement may be proposed by the General Partner or by Limited Partners holding twenty-five percent (25%) or more of the Partnership Interests held by Limited Partners and, except as set forth in Section 7.3B and Section 7.3C and subject to Section 7.3D and the rights of any Holder of any Partnership Interest set forth in a Partnership Unit Designation, shall be approved by the Consent of the Partners. Following such proposal, the General Partner shall submit to the Partners entitled to vote thereon any proposed amendment that, pursuant to the terms of this Agreement, requires the consent, approval or vote of such Partners. The General Partner shall seek the consent, approval or vote of the Partners entitled to vote thereon on any such proposed amendment in accordance with Section 14.3 hereof. Upon obtaining any such Consent, or any other Consent required by this Agreement, and without further action or execution by any other Person, including any Limited Partner, (i) any amendment to this Agreement may be implemented and reflected in a writing executed solely by the General Partner, and (ii) the Limited Partners shall be deemed a party to and bound by such amendment of this Agreement. For the avoidance of doubt, notwithstanding anything to the contrary in this Agreement, this Agreement may not be amended without the Consent of the General Partner.

Section 14.3 *Actions and Consents of the Partners*

A. Meetings of the Partners may be called only by the General Partner to transact any business that the General Partner determines. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners entitled to act at the meeting not less than seven (7) days nor more than sixty (60) days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. Unless approval by a different number or proportion of the Partners is required by this Agreement, the affirmative vote of Partners holding a majority of the Percentage Interests held by the Partners entitled to act on any proposal shall be sufficient to approve such proposal at a meeting of the Partners. Whenever the vote, consent or approval of Partners is permitted or required under this Agreement, such vote, consent or approval may be given at a meeting of Partners or may be given at a meeting of Partners or in accordance with the procedure prescribed in Section 14.3B hereof.

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B. Any action requiring the Consent of any Partner or group of Partners pursuant to this Agreement or that is required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a consent in writing or by electronic transmission setting forth the action so taken or consented to is given by Partners whose affirmative vote would be sufficient to approve such action or provide such Consent at a meeting of the Partners. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as the affirmative vote of such Partners at a meeting of the Partners. Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified. For purposes of obtaining a Consent in writing or by electronic transmission, the General Partner may require a response within a reasonable specified time, but not less than fifteen (15) days, and failure to respond in such time period shall constitute a Consent that is consistent with the General Partner's recommendation with respect to the proposal; *provided*, *however*, that an action shall become effective at such time as requisite Consents are received even if prior to such specified time.

C. Each Partner entitled to act at a meeting of the Partners may authorize any Person or Persons to act for it by proxy on all matters in which a Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Each proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy (or there is receipt of a proxy authorizing a later date). Every proxy shall be revocable at the pleasure of the Partner executing it, such revocation to be effective upon the Partnership's receipt of written notice of such revocation from the Partner executing such proxy, unless such proxy states that it is irrevocable and is coupled with an interest.

D. The General Partner may set, in advance, a record date for the purpose of determining the Partners (i) entitled to Consent to any action, (ii) entitled to receive notice of or vote at any meeting of the Partners or (iii) in order to make a determination of Partners for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than ninety (90) days and, in the case of a meeting of the Partners, not less than five (5) days, before the date on which the meeting is to be held or Consent is to be given. If no record date is fixed, the record date for the determination of Partners entitled to notice of or to vote at a meeting of the Partners shall be at the close of business on the day on which the notice of the meeting is sent, and the record date for any other determination of Partners shall be the effective date of such Partner action, distribution or other event. When a determination of the Partners entitled to vote at any meeting of the Partners has been made as provided in this section, such determination shall apply to any adjournment thereof.

E. Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate in its sole and absolute discretion. Without limitation, meetings of Partners may be conducted in the same manner as meetings of the General Partner's stockholders and may be held at the same time as, and as part of, the meetings of the General Partner's stockholders.

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#### ARTICLE 15

#### GENERAL PROVISIONS
Section 15.1 *Redemption Rights of Qualifying Parties*

A. A Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem all or a portion of the Common Units held by such Tendering Party (Common Units that have in fact been tendered for redemption being hereafter referred to as "*Tendered Units")* in exchange (a "*Redemption*") for the sum of the Cash Amount and the excess of such Holder's Preferred Return Per Class A Unit with respect to the Class A Units being tendered over the aggregate amount previously distributed with respect to such Tendered Common Units pursuant to Section 5.1(ii) hereof payable on the Specified Redemption Date. Any Redemption shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the Qualifying Party when exercising the Redemption right (the "*Tendering Party*"). The Partnership's obligation to effect a Redemption, however, shall not arise or be binding against the Partnership until the earlier of (i) the date the General Partner notifies the Tendering Party that the General Partner declines to acquire some or all of the Tendered Units under Section 15.1B hereof following receipt of a Notice of Redemption and (ii) the Business Day following the Cut-Off Date. In the event of a Redemption, the Cash Amount shall be delivered as a certified or bank check payable to the Tendering Party or, in the General Partner's sole and absolute discretion, in immediately available funds, in each case, on or before the Specified Redemption Date; *provided*, *however*, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 60 Business Days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount.

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B. Notwithstanding the provisions of Section 15.1A hereof, on or before the close of business on the Cut-Off Date, the General Partner may, in the General Partner's sole and absolute discretion but subject to the Ownership Limit, elect to acquire some or all (such percentage being referred to as the "*Applicable Percentage*") of the Tendered Units from the Tendering Party in exchange for REIT Shares. If the General Partner elects to acquire some or all of the Tendered Units pursuant to this Section 15.1B, the General Partner shall give written notice thereof to the Tendering Party on or before the close of business on the Cut-Off Date. If the General Partner elects to acquire any of the Tendered Units for REIT Shares, the General Partner shall issue and deliver such REIT Shares to the Tendering Party pursuant to the terms of this Section 15.1B, in which case (1) the General Partner shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party's exercise of its Redemption right with respect to such Tendered Units and (2) such transaction shall be treated, for federal income tax purposes, as a transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for the REIT Shares Amount. If the General Partner so elects, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage; *provided, however*, that if the General Partner makes an election under this Section 15.1B to issue REIT Shares, the Specified Redemption Date for the Tendered Units to be exchanged for REIT Shares shall be the 10th Business Day after the date the General Partner gives notice of its election; *provided, further,* that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 50 Business Days to the extent required for such issuance not to violate any black-out period on trading imposed by the General Partner or other General Partner policies then in effect and applicable to employees of the General Partner. The Tendering Party shall submit (i) such information, certification or affidavit as the General Partner may reasonably require in connection with the application of the Ownership Limit to any such acquisition and (ii) such written representations, investment letters, legal opinions or other instruments necessary, in the General Partner's view, to effect compliance with the Securities Act. In the event of a purchase of the Tendered Units by the General Partner pursuant to this Section 15.1B, the Tendering Party shall no longer have the right to cause the Partnership to effect a Redemption of such Tendered Units and, upon notice to the Tendering Party by the General Partner given on or before the close of business on the Cut-Off Date that the General Partner has elected to acquire some or all of the Tendered Units pursuant to this Section 15.1B, the obligation of the Partnership to effect a Redemption of the Tendered Units as to which the General Partner's notice relates shall not accrue or arise, but does not affect the obligation under Section 15.1.A. with respect to the other Tendered Units. A number of REIT Shares equal to the product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares and, if applicable, Rights, free of any pledge, lien, encumbrance or restriction, other than the Ownership Limit, the Securities Act and relevant state securities or "blue sky" laws. Neither any Tendering Party whose Tendered Units are acquired by the General Partner pursuant to this Section 15.1B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the General Partner to register, qualify or list any REIT Shares owned or held by such Person, whether or not such REIT Shares are issued pursuant to this Section 15.1B, with the SEC, with any state securities commissioner, department or agency, under the Securities Act or the Exchange Act or with any stock exchange; *provided*, *however*, that this limitation shall not be in derogation of any registration or similar rights granted pursuant to any other written agreement between the General Partner and any such Person. Notwithstanding any delay in such delivery, the Tendering Party shall be deemed the owner of such REIT Shares and Rights for all purposes, including, without limitation, rights to vote or consent, receive dividends, and exercise rights, as of the Specified Redemption Date. REIT Shares issued upon an acquisition of the Tendered Units by the General Partner pursuant to this Section 15.1B may contain such legends regarding restrictions under the Securities Act and applicable state securities laws as the General Partner determines to be necessary or advisable in order to ensure compliance with such laws. Notwithstanding the foregoing, the Tendering Party shall have no right to receive any distribution paid with respect to Tendered Common Units if the record date for such distribution is on or after the Specified Redemption Date. Upon the closing of exchange of REIT Shares pursuant to this Section 15.1.B., the Partnership shall distribute an amount equal to the excess of such Holder's Preferred Return Per Class A Unit with respect to Class A Units being exchanged over the aggregate amount previously distributed with respect to such Tendered Common Units pursuant to Section 5.1(ii) hereof through the date of exchange. Notwithstanding the foregoing, the Tendering Party shall have no right, with respect to receive any distribution paid with respect to Tendered Common Units if the record date for such distribution is on or after the Specified Redemption Date.

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C. Notwithstanding the provisions of Section 15.1A and 15.1B hereof, the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited by the Charter and shall have no rights to require the Partnership to redeem Common Units if the acquisition of such Common Units by the General Partner pursuant to Section 15.1B hereof would cause any Person to violate the Ownership Limit. To the extent that any attempted Redemption or acquisition of the Tendered Units by the General Partner pursuant to Section 15.1B hereof would be in violation of this Section 15.1C, it shall be null and void *ab initio*, and the Tendering Party shall not acquire any rights or economic interests in REIT Shares otherwise issuable by the General Partner under Section 15.1B hereof or cash otherwise payable under Section 15.1A hereof.

<br> D. If the General Partner does not elect to acquire the Tendered Units pursuant to Section 15.1B hereof:

<sup>(1)</sup> The Partnership may elect to raise funds for the payment of the Cash Amount either (a) by requesting that the General Partner contribute to the Partnership funds from the proceeds of a registered public offering by the General Partner of REIT Shares sufficient to purchase the Tendered Units (which the General Partner may agree to conduct in its sole discretion) or (b) from any other sources (including, but not limited to, the sale of any Property and the incurrence of additional Debt) available to the Partnership. Any such contribution shall entitle the General Partner to additional Class B Common Units.<br>

<sup>(2)</sup> If the Cash Amount is not paid on or before the Specified Redemption Date, interest shall accrue with respect to the Cash Amount from the day after the Specified Redemption Date to and including the date on which the Cash Amount is paid at a rate equal to the base rate on corporate loans at large United States money center commercial banks, as published from time to time in the Wall Street Journal (but not higher than the maximum lawful rate).<br>

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<br> E. Notwithstanding the provisions of Section 15.1B hereof, the General Partner shall not, under any circumstances, elect to acquire any Tendered Units in exchange for REIT Shares if such exchange would be prohibited under the Charter.

F. Notwithstanding anything herein to the contrary (but subject to Section 15.1C hereof), with respect to any Redemption (or any tender of Common Units for Redemption if the Tendered Units are acquired by the General Partner pursuant to Section 15.1B hereof) pursuant to this Section 15.1:

<br> (1) All Common Units acquired by the General Partner pursuant to Section 15.1B hereof shall automatically, and without further action required, be converted into and deemed to be a Partnership Interest comprised of the same number of Class B Common Units.

<sup>(2)</sup> Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less than one thousand (1,000) Common Units or, if such Tendering Party holds (as a Limited Partner or, economically, as an Assignee) less than one thousand (1,000) Common Units, all of the Common Units held by such Tendering Party, without, in each case, the Consent of the General Partner.<br>

<sup>(3)</sup> If (i) a Tendering Party surrenders its Tendered Units during the period after the Partnership Record Date with respect to a distribution and before the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such Partnership distribution, and (ii) the General Partner elects to acquire any of such Tendered Units in exchange for REIT Shares pursuant to Section 15.1B, such Tendering Party shall pay to the General Partner on the Specified Redemption Date an amount in cash equal to the portion of the Partnership distribution in respect of the Tendered Units exchanged for REIT Shares, insofar as such distribution relates to the same period for which such Tendering Party would receive a distribution in respect of such REIT Shares.<br>

<sup>(4)</sup> The consummation of such Redemption (or an acquisition of Tendered Units by the General Partner pursuant to Section 15.1B hereof, as the case may be) shall be subject to the expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Act.<br>

<sup>(5)</sup> The Tendering Party shall continue to own (subject, in the case of an Assignee, to the provisions of Section 11.5 hereof) all Common Units subject to any Redemption, and be treated as a Limited Partner or an Assignee, as applicable, with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 15.1A hereof or transferred to the General Partner and paid for, by the issuance of the REIT Shares, pursuant to Section 15.1B hereof on the Specified Redemption Date. Until a Specified Redemption Date and an acquisition of the Tendered Units by the General Partner pursuant to Section 15.1B hereof, the Tendering Party shall have no rights as a stockholder of the General Partner with respect to the REIT Shares issuable in connection with such acquisition.<br>

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<br> G. In connection with an exercise of Redemption rights pursuant to this Section 15.1, except as otherwise Consented to by the General Partner, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:

<sup>(1)</sup> A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) to the best of their knowledge any Related Party and (b) representing that, after giving effect to the Redemption or an acquisition of the Tendered Units by the General Partner pursuant to Section 15.1B hereof, neither the Tendering Party nor to the best of their knowledge any Related Party will own REIT Shares in violation of the Ownership Limit;<br>

<sup>(2)</sup> A written representation that neither the Tendering Party nor to the best of their knowledge any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption or an acquisition of the Tendered Units by the General Partner pursuant to Section 15.1B hereof on the Specified Redemption Date; and<br>

<sup>(3)</sup> An undertaking to certify, at and as a condition of the closing of (i) the Redemption or (ii) the acquisition of Tendered Units by the General Partner pursuant to Section 15.1B hereof on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and to the best of its knowledge any Related Party remain unchanged from that disclosed in the affidavit required by Section 15.1G(1) or (b) after giving effect to the Redemption or the acquisition of Tendered Units by the General Partner pursuant to Section 15.1B hereof, neither the Tendering Party nor, to the best of its knowledge, any other Person shall own REIT Shares in violation of the Ownership Limit.<br>

Section 15.2 *Addresses and Notice*

Any notice, demand, request or report required or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written or electronic communication (including by telecopy, facsimile, electronic mail or commercial courier service) to the Partner, or Assignee at the address set forth in <u>the Register</u> or such other address of which the Partner shall notify the General Partner in accordance with this Section 15.2.

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Section 15.3 *Titles and Captions*

All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to "Articles" or "Sections" are to Articles and Sections of this Agreement.

Section 15.4 *Pronouns and Plurals*

Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

Section 15.5 *Further Action*

The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 15.6 *Binding Effect*

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

Section 15.7 *Waiver*

A. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

B. The restrictions, conditions and other limitations on the rights and benefits of the Limited Partners contained in this Agreement, and the duties, covenants and other requirements of performance or notice by the Limited Partners, are for the benefit of the Partnership and, except for an obligation to pay money to the Partnership, may be waived or relinquished by the General Partner, in its sole and absolute discretion, on behalf of the Partnership in one or more instances from time to time and at any time; *provided*, *however*, that any such waiver or relinquishment may not be made if it would have the effect of (i) creating liability for any other Limited Partner, (ii) causing the Partnership to cease to qualify as a limited partnership, (iii) reducing the amount of cash otherwise distributable to the Limited Partners (other than any such reduction that affects all of the Limited Partners holding the same class or series of Partnership Units on a uniform or pro rata basis, if approved by a Majority in Interest of the Partners holding such class or series of Partnership Units), (iv) resulting in the classification of the Partnership as an association or publicly traded partnership taxable as a corporation or (v) violating the Securities Act, the Exchange Act or any state "blue sky" or other securities laws; and *provided*, *further*, that any waiver relating to compliance with the Ownership Limit or other restrictions in the Charter shall be made and shall be effective only as provided in the Charter.

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Section 15.8 *Counterparts*

This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

Section 15.9 *Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial*

A. This Agreement shall be construed and enforced in accordance with and governed by the laws of the **State of Delaware**, without regard to the principles of conflicts of law. In the event of a conflict between any provision of this Agreement and any non-mandatory provision of the Act, the provisions of this Agreement shall control and take precedence.

B. Each Partner hereby (i) submits to the non-exclusive jurisdiction of any state or federal court sitting in the **State of Delaware**, with respect to any dispute arising out of this Agreement or any transaction contemplated hereby to the extent such courts would have subject matter jurisdiction with respect to such dispute, (ii) irrevocably waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of any state or federal court sitting in the **State of Delaware**, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper, (iii) agrees that notice or the service of process in any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be properly served or delivered if delivered to such Partner at such Partner's last known address as set forth in the Partnership's books and records, and (iv) irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.

Section 15.10 *Entire Agreement*

This Agreement contains all of the understandings and agreements between and among the Partners with respect to the subject matter of this Agreement and the rights, interests and obligations of the Partners with respect to the Partnership. Notwithstanding the immediately preceding sentence, the Partners hereby acknowledge and agree that the General Partner, without the approval of any Limited Partner, may enter into side letters or similar written agreements with Limited Partners that are not Affiliates of the General Partner, executed contemporaneously with the admission of such Limited Partner to the Partnership, affecting the terms hereof, as negotiated with such Limited Partner and which the General Partner in its sole discretion deems necessary, desirable or appropriate. The parties hereto agree that any terms, conditions or provisions contained in such side letters or similar written agreements with a Limited Partner shall govern with respect to such Limited Partner notwithstanding the provisions of this Agreement.

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Section 15.11 *Invalidity of Provisions*

If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

Section 15.12 *Limitation to Preserve REIT Status*

Notwithstanding anything else in this Agreement, to the extent that the amount to be paid, credited or reimbursed (and for purposes of clarification, excluding distributions to the General Partner on account of its Class B Units including pursuant to Article 5 or Section 13.2A(4)) by the Partnership to any REIT Partner or its officers, directors, employees or agents, whether as a reimbursement, fee, expense or indemnity (a "*REIT Payment*"), would constitute gross income to the REIT Partner for purposes of Code Section 856(c)(2) or Code Section 856(c)(3), then, notwithstanding any other provision of this Agreement, the amount of such REIT Payments, as selected by the General Partner in its discretion from among items of potential distribution, reimbursement, fees, expenses and indemnities, shall be reduced for any Partnership Year so that the REIT Payments, as so reduced, for or with respect to such REIT Partner shall not exceed the lesser of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) an amount equal to the excess, if any, of (a) four percent (4%) of the REIT Partner's total gross income (but excluding the amount of any REIT Payments and any amounts excluded from gross income pursuant to Section 856(c) of the Code) for the Partnership Year that is described in subsections (A) through (I) of Code Section 856(c)(2) over (b) the amount of gross income (within the meaning of Code Section 856(c)(2)) derived by the REIT Partner from sources other than those described in subsections (A) through (I) of Code Section 856(c)(2) (but not including the amount of any REIT Payments or any amounts excluded from gross income pursuant to Section 856(c) of the Code); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) an amount equal to the excess, if any, of (a) twenty-four percent (24%) of the REIT Partner's total gross income (but excluding the amount of any REIT Payments and any amounts excluded from gross income pursuant to Section 856(c) of the Code) for the Partnership Year that is described in subsections (A) through (I) of Code Section 856(c)(3) over (b) the amount of gross income (within the meaning of Code Section 856(c)(3)) derived by the REIT Partner from sources other than those described in subsections (A) through (I) of Code Section 856(c)(3) (but not including the amount of any REIT Payments or any amounts excluded from gross income pursuant to Section 856(c) of the Code);

*provided, however*, that REIT Payments in excess of the amounts set forth in clauses (i) and (ii) above may be made if the General Partner, as a condition precedent, obtains an opinion of tax counsel that the receipt of such excess amounts should not adversely affect the REIT Partner's ability to qualify as a REIT. To the extent that REIT Payments may not be made in a Partnership Year as a consequence of the limitations set forth in this Section 15.12, such REIT Payments shall carry over and shall be treated as arising in the following Partnership Year if such carry over does not adversely affect the REIT Partner's ability to qualify as a REIT, provided, however, that any such REIT Payment shall not be carried over more than three Partnership Years, and any such remaining payments shall no longer be due and payable. The purpose of the limitations contained in this Section 15.12 is to prevent any REIT Partner from failing to qualify as a REIT under the Code by reason of such REIT Partner's share of items, including distributions, reimbursements, fees, expenses or indemnities, receivable directly or indirectly from the Partnership, and this Section 15.12 shall be interpreted and applied to effectuate such purpose.

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Section 15.13 *No Partition*

No Partner nor any successor-in-interest to a Partner shall have the right while this Agreement remains in effect to have any property of the Partnership partitioned, or to file a complaint or institute any proceeding at law or in equity to have such property of the Partnership partitioned, and each Partner, on behalf of itself and its successors and assigns hereby waives any such right. It is the intention of the Partners that the rights of the parties hereto and their successors-in-interest to Partnership property, as among themselves, shall be governed by the terms of this Agreement, and that the rights of the Partners and their respective successors-in-interest shall be subject to the limitations and restrictions as set forth in this Agreement.

Section 15.14 *No Third-Party Rights Created Hereby*

The provisions of this Agreement are solely for the purpose of defining the interests of the Holders, inter se; and no other Person, firm or entity (i.e., a party who is not a signatory hereto or a permitted successor to such signatory hereto) shall have any right, power, title or interest by way of subrogation or otherwise, in and to the rights, powers, title and provisions of this Agreement. No creditor or other third party having dealings with the Partnership (other than as expressly provided herein with respect to Indemnitees) shall have the right to enforce the right or obligation of any Partner to make Capital Contributions or loans to the Partnership or to pursue any other right or remedy hereunder or at law or in equity. None of the rights or obligations of the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may any such rights or obligations be sold, transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or any of the Partners.

Section 15.15 *No Rights as Stockholders*

Nothing contained in this Agreement shall be construed as conferring upon the Holders of Partnership Units any rights whatsoever as stockholders of the General Partner, including without limitation any right to receive dividends or other distributions made to stockholders of the General Partner or to vote or to consent or receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the General Partner or any other matter.

*[Remainder of Page Left Blank Intentionally]*

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IN WITNESS WHEREOF, this Agreement of Limited Partnership of MAC Operating Partnership, LP has been executed as of the date first written above.

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| | | | |
|:---|:---|:---|:---|
| **GENERAL PARTNER**: | **GENERAL PARTNER**: | **LIMITED PARTNER**: | **LIMITED PARTNER**: |
| MACKENZIE APARTMENT COMMUNITIES, INC. | MACKENZIE APARTMENT COMMUNITIES, INC. | MACKENZIE APARTMENT COMMUNITIES, INC. | MACKENZIE APARTMENT COMMUNITIES, INC. |
| By: | /s/ Chip Patterson | By: | /s/ Chip Patterson |
|  | Chip Patterson, Chairman and Secretary |  | &nbsp;&nbsp;&nbsp; Chip Patterson, Chairman and Secretary |
|  |  | MACKENZIE REALTY OPERATING PARTNERSHIP, LP | MACKENZIE REALTY OPERATING PARTNERSHIP, LP |
|  |  | By: | /s/ Chip Patterson |
|  |  |  | &nbsp;&nbsp;&nbsp; Chip Patterson, Chairman and Secretary of its General Partner |

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#### EXHIBIT A

#### NOTICE OF REDEMPTION

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| | |
|:---|:---|
| To: | **[General Partner]** |

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#### [Address]
The undersigned Limited Partner or Assignee hereby irrevocably tenders for Redemption Common Units in **MAC Operating Partnership, LP**, in accordance with the terms of the Agreement of Limited Partnership, dated as of May **[_________]**, 20__ as amended (the "*Agreement*"), and the Redemption rights referred to therein. The undersigned Limited Partner or Assignee:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) undertakes (i) to surrender such Common Units and any certificate therefor at the closing of the Redemption and (ii) to furnish to the General Partner, prior to the Specified Redemption Date, the documentation, instruments and information required under Section 15.1A and Section 15.1G of the Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) directs that the certified check representing the Cash Amount, or the REIT Shares Amount, as applicable, deliverable upon the closing of such Redemption be delivered to the address specified below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) represents, warrants, certifies and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the undersigned Limited Partner or Assignee is a Qualifying Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the undersigned Limited Partner or Assignee has, and at the closing of the Redemption will have, good, marketable and unencumbered title to such Common Units, free and clear of the rights or interests of any other Person or entity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the undersigned Limited Partner or Assignee has, and at the closing of the Redemption will have, the full right, power and authority to tender and surrender such Common Units as provided herein, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the undersigned Limited Partner or Assignee has obtained the consent or approval of all persons and entities, if any, having the right to consent to or approve such tender and surrender; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) acknowledges that he will continue to own such Class A Common Units until and unless either (1) such Common Units are acquired by the General Partner pursuant to Section 15.1B of the Agreement or (2) such redemption transaction closes.

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All capitalized terms used herein and not otherwise defined shall have the same meaning ascribed to them respectively in the Agreement.

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| | |
|:---|:---|
| Dated:<br>| Name of Limited Partner or Assignee: |
| | (Signature of Limited Partner or Assignee) |
| | (Street Address) |
| | (City) (State) (Zip Code) |

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| | |
|:---|:---|
|  | Signature Medallion Guaranteed by: |
| Issue Check Payable to: | |
| Please insert social security or identifying number: | |

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## Exhibit 31.1

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EXHIBIT 31.1Section 302 Certification

of Robert Dixon (President and Chief Executive Officer)

#### CERTIFICATION
I, Robert Dixon, certify that:

<br> 1. I have reviewed this quarterly report on Form 10-Q of MacKenzie Realty Capital, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

<br> a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

<br> b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | /s/ Robert Dixon |
|  |  | Robert Dixon |
|  |  | President and Chief Executive Officer |

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2<br>

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## Exhibit 31.2

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EXHIBIT 31.2Section 302 Certification

of Angche Sherpa (Treasurer and Chief Financial Officer)

#### CERTIFICATION
I, Angche Sherpa, certify that:

<br> 1. I have reviewed this quarterly report on Form 10-Q of MacKenzie Realty Capital, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

<br> a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

<br> b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | /s/ Angche Sherpa |
|  |  | Angche Sherpa |
|  |  | Treasurer and Chief Financial Officer |

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2<br>

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## Exhibit 32.1

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EXHIBIT 32.1Section 1350 Certification

of Robert Dixon (President and Chief Executive Officer)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MacKenzie Realty Capital, Inc. (the "<u>Company</u>") on Form 10-Q for the quarter ended March 31, 2026, as filed with the United States Securities and Exchange Commission on the date hereof (the "<u>Report</u>"), I, Robert Dixon, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | /s/ Robert Dixon |
|  |  | Robert Dixon |
|  |  | President and Chief Executive Officer |

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## Exhibit 32.2

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EXHIBIT 32.2Section 1350 Certification

of Angche Sherpa (Treasurer and Chief Financial Officer)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MacKenzie Realty Capital, Inc. (the "<u>Company</u>") on Form 10-Q for the quarter ended March 31, 2026, as filed with the United States Securities and Exchange Commission on the date hereof (the "<u>Report</u>"), I, Angche Sherpa, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | /s/ Angche Sherpa |
|  |  | Angche Sherpa |
|  |  | Treasurer and Chief Financial Officer |

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