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Transactions with related parties
 3 Months Ended
Mar. 31, 2024
Transactions with related parties [Abstract]  
Transactions with related parties
Note 16 ‑ Transactions with related parties:

The Company rents office space under a lease with JBB Cherokee Holdings LLC, an entity affiliated by common ownership. Related party lease cost included in the accompanying consolidated statements of income as a component of selling, general and administrative costs is presented in the table below (in thousands).

   
Three months ended March 31,
  
   
2024
    
2023
  
Operating lease costs (related party)
  
$
87
    
$
87
  
Variable lease costs ‑ operating (related party)
  
$
17
    
$
20
  

As of March 31, 2024, the future minimum payments required under operating leases with related parties are as follows (in thousands):

Year ending December 31,
      
2024 (1)
  
$
254
  
2025
    
347
  
2026
    
357
  
2027
    
368
  
2028
    
251
  
Total lease payments
    
1,577
  
Less: imputed interest
    
(204
)
Total lease liability (related party)
  
$
1,373
  

(1)
Remaining payments are for the nine months ending December 31, 2024.

Payments under the office lease agreement, along with costs associated with the office space, totaled approximately $0.1 million during each of the three months ended March 31, 2024 and 2023, which is included in selling, general and administrative costs in the accompanying consolidated statements of income.

During each of the three months ended March 31, 2024 and 2023, the Company incurred fees of $0.4 million and $6,000, respectively, in the aggregate from certain entities affiliated by common ownership for use of facilities related to business development and vendor relations, which is included in selling, general and administrative costs in the accompanying consolidated statements of income. The Company paid fees of $3,000 and $6,000 for use of these facilities during each of the three months ended March 31, 2024 and 2023, respectively.

While the Company typically enters into lot option agreements whereby a deposit is provided to the seller, the Company has in the past, in lieu of providing a deposit, invested a minority interest in certain of the land banking entities with which it contracts. During the three months ended March 31, 2023, the Company purchased 26 lots totaling approximately $2.2 million under lot option agreements with unconsolidated land bank entities in which the Company had a non‑controlling ownership interest. There was no such activity during the three months ended March 31, 2024. The Company has identified these entities as VIEs; however, the Company has not been identified as the primary beneficiary of the VIEs and the entities are not consolidated in the accompanying condensed consolidated financial statements (see Note 10 for information related to VIEs).

The Company has entered into lot option transactions with a former member of the Company’s Board of Managers. During the three months ended March 31, 2023, the Company sold 5 finished lots at cost for approximately $0.3 million to the then member of the Company’s Board of Managers. During the three months ended March 31, 2023, the Company purchased 82 lots totaling $4.6 million related to these lot option agreements.

The Company charters aircraft services from companies that are controlled by a related entity of the Company’s managing member. Expenses incurred and paid to these companies under a dry lease agreement for the use of the aircraft for business travel totaled approximately $0.1 million for the three months ended March 31, 2024 and 2023, which are included in selling, general and administrative costs in the accompanying condensed consolidated statements of income.

Historically, since August 2016, one of the members of Smith Douglas Holdings LLC’s Board of Managers was party to a consulting agreement with Smith Douglas Holdings LLC  pursuant to which he provided services to Smith Douglas Holdings LLC in exchange for (i) an annual fee equal to approximately $0.6 million plus (ii) eligibility to earn an annual bonus, subject to the terms and conditions therein. During each of the three months ended March 31, 2024 and 2023, the member of Smith Douglas Holdings LLC’s Board of Managers earned fees under the consulting agreement of approximately $0.1 million, which are included in selling, general and administrative costs in the accompanying condensed consolidated statements of income. As of December 31, 2023, the Company had a balance due to the member of Smith Douglas Holdings LLC’s Board of Managers under the consulting agreement of approximately $0.7 million, which is included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets. There was no such balance outstanding as of March 31, 2024.

The Company had two uncollateralized notes payable bearing interest at 2.12% and 2.56%, respectively, and other payables to certain related parties for the purchase of airplanes totaling approximately $0.9 million as of December 31, 2023, which are included in accrued expenses and other liabilities in the accompanying 2023 condensed consolidated balance sheet. The notes payable were repaid during the three months ended March 31, 2024.

The Company has related party receivables totaling approximately $0.1 million as of both March 31, 2024 and December 31, 2023 for various expenses paid by the Company on behalf of the related party, which are included in other assets in the accompanying condensed consolidated balance sheets.

As of December 31, 2023, the Company had a balance due to related parties of $11,000 for various expenses paid by the related parties on behalf of the Company, which is included in accrued expenses and other liabilities in the accompanying 2023 condensed consolidated balance sheet. There was no such balance outstanding as of March 31, 2024.