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Related Party Transactions
 6 Months Ended
Jun. 30, 2016
Related Party Transactions  
Related Party Transactions

 

Note 11 — Related Party Transactions

 

Effective January 1, 2016, pursuant to the compensation and services agreement, as amended, with Majestic Property Management Corp., a company wholly-owned by the Company’s vice-chairman, property management fees are paid based on 1.5% and 2.0% of the rental payments (including tenant reimbursements) actually received by the Company from net lease tenants and operating lease tenants, respectively.  The Company does not pay Majestic property management fees with respect to properties managed by third parties.  Pursuant to the compensation and services agreement, the Company paid $672,000 and $1,324,000 (including property management fees of $261,000 and $503,000) for the three and six months ended June 30, 2016, respectively.  For the three and six months ended June 30, 2015, such fees were $634,000 and $1,264,000 (including property management fees of $223,000 and $446,000, respectively).  The three and six months ended June 30, 2016 and 2015 includes overhead fees of $49,000 and $98,000, respectively. Included in Other assets on the consolidated balance sheet at June 30, 2016, is a $21,000 prepayment of management fees to Majestic; such amount was deducted from a fee for a subsequent month.

 

For 2016 and 2015, the Company agreed to pay quarterly fees of $65,625 to the Company’s chairman and $26,250 to the Company’s vice-chairman.

 

Executive officers and others providing services under the compensation and services agreement were awarded shares of restricted stock and restricted stock units under the Company’s stock incentive plans (described in Note 14).  The costs of the plans charged to the Company’s operations applicable to the executive officers and others providing services under the compensation and services agreement amounted to $382,000 and $726,000 for the three and six months ended June 30, 2016, and $312,000 and $622,000 for the three and six months ended June 30, 2015.

 

The fees paid under the compensation and services agreement (except for the property management fees which are included in Real estate expenses), the chairman and vice-chairman fees, the costs of the stock incentive plans, and the rent expense are included in General and administrative expense on the consolidated statements of income.

 

The Company obtains its property insurance in conjunction with Gould and reimburses Gould annually for the Company’s insurance cost relating to its properties. Included in Real estate expenses on the consolidated statements of income is insurance expense of $101,000 and $202,000 for the three and six months ended June 30, 2016, and $57,000 and $114,000 for the three and six months ended June 30, 2015.

 

During the three and six months ended June 30, 2016 and the three and six months ended June 30, 2015, the Company paid an aggregate of $36,000, $88,000, $33,000 and $138,000, respectively, to its joint venture partners or their affiliates for property management and acquisition fees, which are included in Real estate expenses and Real estate acquisition costs on the consolidated statements of income.  Additionally, in the three and six months ended June 30, 2016 and the three and six months ended June 30, 2015, an unconsolidated joint venture of the Company paid fees of $37,000, $72,000, $326,000 and $326,000 to the other partner of the venture, of which $19,000, $36,000, $163,000 and $163,000, respectively, reduced Equity in earnings of unconsolidated joint ventures on the consolidated statements of income.