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RELATED PARTY TRANSACTIONS | 12 Months Ended
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Dec. 31, 2019
RELATED PARTY TRANSACTIONS |
RELATED PARTY TRANSACTIONS | NOTE 10—RELATED PARTY TRANSACTIONS Compensation and Services Agreement Pursuant to the compensation and services agreement with Majestic Property Management Corp. (“Majestic”), Majestic provides the Company with the services of executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services with respect to mortgage financings and construction supervisory services (collectively, the “Services”). Majestic is wholly-owned by the Company’s vice-chairman and certain of the Company’s executive officers are officers of, and are compensated by, Majestic. The amount the Company pays Majestic for the Services is approved each year by the Company’s Compensation and/or Audit Committees and the independent directors. In consideration for the Services, the Company paid Majestic $2,826,000 in 2019, $2,745,000 in 2018 and $2,673,000 in 2017. Included in these fees are $1,307,000 in 2019, $1,226,000 in 2018 and $1,154,000 in 2017, of property management costs. The amounts paid for property management services is 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 with respect to properties managed by third parties. The Company also paid Majestic, pursuant to the compensation and services agreement $216,000 in each of 2019, 2018 and 2017 for the Company’s share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. The Company does not pay Majestic for such services except as described in this paragraph. Executive officers and others providing services to the Company under the compensation and services agreement were awarded shares of restricted stock and RSUs under the Company’s stock incentive plans (described in Note 12). The related expense charged to the Company’s operations was $1,973,000, $1,765,000 and $1,539,000 in 2019, 2018 and 2017, respectively. The amounts paid under the compensation and services agreement (except for the property management costs which are included in Real estate expenses) and the costs of the stock incentive plans are included in General and administrative expense on the consolidated statements of income for 2019, 2018 and 2017. Joint Venture Partners and Affiliates During 2019, 2018 and 2017, the Company paid an aggregate of $82,000, $107,000 and $143,000, respectively, to its consolidated joint venture partners or their affiliates (none of whom are officers, directors, or employees of the Company) for property management services, which are included in Real estate expenses on the consolidated statements of income. The Company’s unconsolidated joint ventures paid management fees of $117,000, $169,000 and $175,000 to the other partner of the ventures, which reduced Equity in earnings on the consolidated statements of income by $59,000, $85,000 and $88,000 during 2019, 2018 and 2017, respectively. In addition, in 2019, in connection with the purchase of a property in Rincon, Georgia, the Company paid an unconsolidated joint venture partner a $64,000 brokerage commission which is capitalized to the real estate assets acquired (see Note 4). Other During 2019, 2018 and 2017, the Company paid fees of (i) $289,000, $276,000 and $276,000, respectively, to the Company's chairman and (ii) $116,000, $110,000 and $110,000, respectively, to the Company’s vice-chairman. These fees are included in General and administrative expense on the consolidated statements of income. At December 31, 2019 and 2018, Gould Investors L.P. (“Gould Investors”), a related party, owned 1,785,976 shares of the outstanding common stock of the Company, or approximately 9.0% and 9.2%, respectively. NOTE 10—RELATED PARTY TRANSACTIONS (Continued) The Company obtains its property insurance in conjunction with Gould Investors and reimburses Gould Investors annually for the Company’s insurance cost relating to its properties. Amounts reimbursed to Gould Investors were $1,025,000, $912,000 and $790,000 during 2019, 2018 and 2017, respectively. Included in Real estate expenses on the consolidated statements of income is insurance expense of $927,000, $877,000 and $757,000 during 2019, 2018 and 2017, respectively. The balance of the amounts reimbursed to Gould Investors represents prepaid insurance and is included in Other assets on the consolidated balance sheets.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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