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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2023
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

NOTE 10 — RELATED PARTY TRANSACTIONS

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Compensation and Services Agreement

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Pursuant to the compensation and services agreement with Majestic Property Management Corp. (“Majestic”), Majestic provides the Company with certain (i) executive, administrative, legal, accounting, clerical, property management, property acquisition, consulting (i.e., sale, leasing, brokerage, and mortgage financing), and construction supervisory services (collectively, the “Services”) and (ii) facilities and other resources. Majestic is wholly owned by the Company’s vice chairman and it provides compensation to several of the Company’s executive officers.

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NOTE 10 — RELATED PARTY TRANSACTIONS (CONTINUED)

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During 2023, 2022, and 2021, in consideration for the Services, the Company paid Majestic $3,317,000, $3,067,000 and $3,111,000, respectively. Included in these fees are $1,510,000 in 2023, $1,346,000 in 2022 and $1,365,000 in 2021 of property management services. The amounts paid for property management services are 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. During 2023, 2022 and 2021, the Company also paid Majestic, pursuant to the compensation and services agreement, $317,000, $317,000 and $295,000, respectively, for the Company’s share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies.

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Executive officers and all others providing services to the Company under the compensation and services agreement were awarded shares of restricted stock and restricted stock units (“RSUs”) under the Company’s stock incentive plans. During 2023, 2022 and 2021, the related expense charged to the Company’s operations was $2,499,000, $2,572,000 and $2,590,000, respectively.

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The amounts paid under the compensation and services agreement (except for the property management services 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.

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Joint Venture Partners and Affiliates

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During 2023, 2022 and 2021, the Company paid an aggregate of $90,000, $84,000 and $83,000, respectively, to its consolidated joint venture partner 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.

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During 2023, 2022 and 2021, the Company’s unconsolidated joint ventures paid management fees of $115,000, $131,000 and $118,000, respectively, to the other partner of the ventures, which increased Equity in loss on the consolidated statement of income by $57,000 during 2023 and reduced Equity in earnings on the consolidated statements of income by $66,000 and $59,000 during 2022 and 2021, respectively.

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Other

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During 2023, 2022 and 2021, the Company paid fees of (i) $313,000, $313,000 and $298,000, respectively, to the Company’s chairman and (ii) $125,000, $125,000 and $119,000, respectively, to the Company’s vice chairman. These fees are included in General and administrative expense on the consolidated statements of income.

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At December 31, 2023 and 2022, Gould Investors L.P. (“Gould Investors”), a related party, owned 2,180,931 and 1,998,535 shares of the outstanding common stock of the Company, respectively, or approximately 10.4% and 9.5%, respectively.

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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 $1,093,000, $586,000 and $1,402,000 during 2023, 2022 and 2021, respectively. Included in Real estate expenses on the consolidated statements of income is insurance expense of $893,000, $944,000 and $1,267,000 during 2023, 2022 and 2021, respectively. The balance of the amounts reimbursed to Gould Investors represents prepaid insurance and is included in other assets on the consolidated balance sheets.