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

In the condensed consolidated statements of cash flows, distributions and equity in net income are presented net as cash flows from operating activities. Cumulative distributions received exceeding cumulative equity in earnings represent returns of investments and are classified as cash flows from investing activities in the condensed consolidated statements of cash flows.

At March 31, 2019, we have non-controlling equity investments or commitments in four jointly-owned LLCs/LPs which own MOBs. As of March 31, 2019, we accounted for these LLCs/LPs on an unconsolidated basis pursuant to the equity method since they are not variable interest entities which we are the primary beneficiary nor do we have a controlling voting interest. The majority of these entities are joint-ventures between us and non-related parties that hold minority ownership interests in the entities. Each entity is generally self-sustained from a cash flow perspective and generates sufficient cash flow to meet its operating cash flow requirements and service the third-party debt (if applicable) that is non-recourse to us. Although there is typically no ongoing financial support required from us to these entities since they are cash-flow sufficient, we may, from time to time, provide funding for certain purposes such as, but not limited to, significant capital expenditures, leasehold improvements and debt financing. Although we are not obligated to do so, if approved by us at our sole discretion, additional cash fundings are typically advanced as equity or member loans. These entities maintain property insurance on the properties.

The following property table represents the four LLCs in which we own a noncontrolling interest and were accounted for under the equity method as of March 31, 2019:


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

(a.)	This LLC has a third-party term loan, which is non-recourse to us, of $8.2 million outstanding as of March 31, 2019.

(b.)	This building is on the campus of a UHS hospital and has tenants that include subsidiaries of UHS. This LP has a third-party term loan, which is non-recourse to us, of $13.9 million outstanding as of March 31, 2019.

(c.)	We have committed to invest up to $2.5 million in equity and debt financing, of which $2.1 million has been funded as of March 31, 2019. This LP has a third-party term loan, which is non-recourse to us, of $5.0 million outstanding as of March 31, 2019.

Below are the condensed combined statements of income (unaudited) for the LLCs/LPs accounted for under the equity method during the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
	2019		2018
	(amounts in thousands)
Revenues	$	2,460	$	2,462
Operating expenses		1,012		958
Depreciation and amortization		398		457
Interest, net		322		328
Net income	$	728	$	719
Our share of net income	$	430	$	429

Below are the condensed combined balance sheets (unaudited) for the four above-mentioned LLCs that were accounted for under the equity method as of March 31, 2019 and December 31, 2018:

	March 31, 2019			December 31, 2018
	(amounts in thousands)
Net property, including construction in progress	$	31,432		$	31,818
Other assets		6,951			3,251
Total assets	$	38,383		$	35,069

Other liabilities	$	6,005		$	2,717
Mortgage notes payable, non-recourse to us		27,103			27,256
Equity		5,275			5,096
Total liabilities and equity	$	38,383		$	35,069

Investments in LLCs before amounts included in
accrued expenses and other liabilities	$	4,944		$	5,019
Amounts included in accrued expenses and other liabilities		(1,933	)		(2,258	)
Our share of equity in LLCs, net	$	3,011		$	2,761

As of March 31, 2019, and December 31, 2018, aggregate principal amounts due on mortgage notes payable by unconsolidated LLCs, which are accounted for under the equity method and are non-recourse to us, are as follows (amounts in thousands):

	Mortgage Loan Balance (a.)
Name of LLC/LP	3/31/2019		12/31/2018		Maturity Date
FTX MOB Phase II (5.00% fixed rate mortgage loan)	$	5,032	$	5,067	October, 2020
Grayson Properties (5.034% fixed rate mortgage loan)		13,860		13,929	September, 2021
Brunswick Associates (3.64% fixed rate mortgage loan)		8,211		8,260	December, 2024
	$	27,103	$	27,256

(a.)	All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity.

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