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Related Party Transactions
 9 Months Ended
Sep. 30, 2015
Related Party Transactions  
Related Party Transactions

 

Note 11 — Related Party Transactions

 

For 2015, the Company agreed to pay quarterly fees of $633,750 (including overhead expenses of $48,900 and property management fees of $223,125) pursuant to the compensation and services agreement, as amended, with Majestic Property Management Corp., a company wholly-owned by the Company’s vice-chairman.  For the three months ended September 30, 2014, such quarterly fees were $602,500 (including overhead expenses of $46,600 and property management fees of $212,500). The nine months ended September 30, 2015 and 2014 include fees of $1,901,000 and $2,252,000, respectively. The 2015 and 2014 amounts reflect an adjustment to the compensation and services agreement that was effective July 1, 2014.

 

For 2015 and 2014, the Company agreed to pay quarterly fees of $65,625 and $62,500, respectively, to the Company’s chairman and $26,250 and $25,000, respectively, to the Company’s vice-chairman.

 

The chairman and vice-chairman fees and the fees paid under the compensation and services agreement are included in general and administrative expense on the consolidated statements of income, except for the property management fees which are included in real estate expenses on the consolidated statements of income.

 

The Company obtains its property insurance in conjunction with Gould Investors L.P. (“Gould”), a related party and reimburses Gould annually for the Company’s insurance cost relating to its properties. Amounts reimbursed to Gould were $513,000 during the three and nine months ended September 30, 2015 and $400,000 during the three and nine months ended September 30, 2014. Included in real estate expenses on the consolidated statements of income is insurance expense of $121,000 and $235,000 for the three and nine months ended September 30, 2015,  and $86,000 and $186,000 for the three and nine months ended September 30, 2014, respectively.

 

During the nine months ended September 30, 2015, the Company received a $131,000 financing fee for obtaining the mortgage debt for the unconsolidated joint venture that acquired the Manahawkin, New Jersey  property (see Note 7). Fifty percent of this income is included in Other income on the consolidated statements of income and the balance is recorded as a reduction to Investment in unconsolidated joint ventures on the consolidated balance sheets. In conjunction with the acquisition, the joint venture paid an acquisition fee to the other partners of the venture.

 

During the three and nine months ended September 30, 2015 and 2014, the Company paid an aggregate of $64,000, $528,000, $10,000 and $31,000, respectively, to its joint venture partners or their affiliates for property management and acquisition fees, which were included in real estate operating expenses or equity in earnings of unconsolidated ventures on the consolidated statements of income.