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RELATED PARTY TRANSACTIONS
 6 Months Ended
Jun. 30, 2013
RELATED PARTY TRANSACTIONS [Abstract]  
RELATED PARTY TRANSACTIONS [TextBlock]

NOTE 6. RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES

 

From time to time, IOT and its related parties have made unsecured advances to each other which include transactions involving the purchase, sale, and financing of property.  In addition, we have a cash management agreement with our advisor.  The agreement provides for excess cash to be invested in and managed by our advisor Pillar, a related party.  The table below reflects the various transactions between IOT, Pillar, and TCI (dollars in thousands):

 

 

 

TCI

 

 

Pillar

 

 

Total

 

Related party receivable, December 31, 2012

 

$

58,534

 

 

$

-

 

 

 

58,534

 

Cash transfers

 

 

-

 

 

 

556

 

 

 

556

 

Advisory fees

 

 

-

 

 

 

(411

)

 

 

(411

)

Net income fee

 

 

-

 

 

 

(104

)

 

 

(104

)

POA fees

 

 

-

 

 

 

(24

)

 

 

(24

)

Cost reimbursements

 

 

-

 

 

 

(118

)

 

 

(118

)

Expenses paid by advisor

 

 

-

 

 

 

(110

)

 

 

(110

)

Financing (mortgage payments)

 

 

-

 

 

 

(692

)

 

 

(692

)

Interest income

 

 

1,192

 

 

 

-

 

 

 

1,192

 

Purchase of obligation

 

 

(903

)

 

 

903

 

 

 

-

 

Related party receivable, June 30, 2013

 

$

58,823

 

 

$

-

 

 

$

58,823

 

 

We have historically engaged in and will continue to engage in certain business transactions with related parties, including but not limited to asset acquisitions and dispositions.  Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities.  Related party transactions may not always be favorable to our business and may include terms, conditions and agreements that are not necessarily beneficial to or in the best interest of our company.