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RELATED-PARTY TRANSACTIONS | 6 Months Ended
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Jun. 30, 2019
Related Party Transactions [Abstract] |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Asset Management and Other Fees to Related Parties In December 2015, CIM Urban and CIM Investment Advisors, LLC, an affiliate of CIM REIT and CIM Group, entered into an investment management agreement, pursuant to which CIM Urban engaged CIM Investment Advisors, LLC to provide certain services to CIM Urban (the “Investment Management Agreement”). CIM Investment Advisors, LLC changed its name to CIM Capital, LLC in December 2018, and, on January 1, 2019, assigned its duties under the Investment Management Agreement to its four wholly-owned subsidiaries: CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager. The "Operator" refers to CIM Investment Advisors, LLC from December 10, 2015 to December 31, 2018 and to CIM Capital, LLC and its four wholly-owned subsidiaries on and after January 1, 2019. CIM Urban pays asset management fees to the Operator on a quarterly basis in arrears. The fee is calculated as a percentage of the daily average adjusted fair value of CIM Urban's assets:
Daily Average Adjusted Fair Value of CIM Urban's Assets |  |
Quarterly Fee Percentage
From Greater of |  |  | To and Including |  |
(in thousands) |  |
$ | — |  |  | $ | 500,000 |  |  | 0.2500%
500,000 |  |  | 1,000,000 |  |  | 0.2375%
1,000,000 |  |  | 1,500,000 |  |  | 0.2250%
1,500,000 |  |  | 4,000,000 |  |  | 0.2125%
4,000,000 |  |  | 20,000,000 |  |  | 0.1000%
The Operator earned asset management fees of $2,919,000 and $4,460,000 for the three months ended June 30, 2019 and 2018, respectively, and $7,245,000 and $8,875,000 for the six months ended June 30, 2019 and 2018, respectively. At June 30, 2019 and December 31, 2018, asset management fees of $2,929,000 and $4,540,000, respectively, were due to the Operator. CIM Management, Inc. and certain of its affiliates (collectively, the "CIM Management Entities"), all affiliates of CIM REIT and CIM Group, provide property management, leasing, and development services to CIM Urban. The CIM Management Entities earned property management fees, which are included in rental and other property operating expenses, totaling $607,000 and $1,083,000 for the three months ended June 30, 2019 and 2018, respectively, and $1,612,000 and $2,205,000 for the six months ended June 30, 2019 and 2018, respectively. CIM Urban also reimbursed the CIM Management Entities $1,406,000 and $1,533,000 for the three months ended June 30, 2019 and 2018, respectively, and $3,036,000 and $3,267,000 for the six months ended June 30, 2019 and 2018, respectively, for onsite management costs incurred on behalf of CIM Urban, which are included in rental and other property operating expenses. The CIM Management Entities earned leasing commissions of $556,000 and $30,000 for the three months ended June 30, 2019 and 2018, respectively, and $578,000 and $219,000 for the six months ended June 30, 2019 and 2018, respectively, which were capitalized to deferred charges. In addition, the CIM Management Entities earned construction management fees of $69,000 and $86,000 for the three months ended June 30, 2019 and 2018, respectively, and $169,000 and $441,000 for the six months ended June 30, 2019 and 2018, respectively, which were capitalized to investments in real estate. At June 30, 2019 and December 31, 2018, fees payable and expense reimbursements due to the CIM Management Entities of $2,577,000 and $3,202,000, respectively, are included in due to related parties. Also included in due to related parties as of June 30, 2019 and December 31, 2018, were $20,000 and $315,000, respectively, due to the CIM Management Entities and certain of its affiliates. On March 11, 2014, CIM Commercial and its subsidiaries entered into a master services agreement (the "Master Services Agreement") with CIM Service Provider, LLC (the "Administrator"), an affiliate of CIM Group, pursuant to which the Administrator has agreed to provide, or arrange for other service providers to provide, management and administration services to CIM Commercial and its subsidiaries. Pursuant to the Master Services Agreement, we appointed an affiliate of CIM Group as the administrator of Urban Partners GP, LLC. Under the Master Services Agreement, CIM Commercial pays a base service fee (the "Base Service Fee") to the Administrator initially set at $1,000,000 per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears. The Administrator earned a Base Service Fee of $276,000 and $269,000 for the three months ended June 30, 2019 and 2018, respectively, and $552,000 and $539,000 for the six months ended June 30, 2019 and 2018, respectively. In addition, pursuant to the terms of the Master Services Agreement, the Administrator may receive compensation and or reimbursement for performing certain services for CIM Commercial and its subsidiaries that are not covered under the Base Service Fee. During the six months ended June 30, 2019 and 2018, such services performed by the Administrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, and from and after September 2018, operational and on-going support in connection with our offering of Series A Preferred Units. The Administrator's compensation is based on the salaries and benefits of the employees of the Administrator and or its affiliates who performed these services (allocated based on the percentage of time spent on the affairs of CIM Commercial and its subsidiaries). We expensed $488,000 and $697,000 for the three months ended June 30, 2019 and 2018, respectively, and $1,058,000 and $1,555,000 for the six months ended June 30, 2019 and 2018, respectively, for such services which are included in asset management and other fees to related parties. At June 30, 2019 and December 31, 2018, $1,022,000 and $1,490,000 was due to the Administrator, respectively, for such services. On January 1, 2015, we entered into a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC ("CIM SBA"), an affiliate of CIM Group, and our subsidiary, PMC Commercial Lending, LLC. The agreement provides that CIM SBA will provide personnel and resources to us and that we will reimburse CIM SBA for the costs and expenses of providing such personnel and resources. For the three months ended June 30, 2019 and 2018, we incurred expenses related to services subject to reimbursement by us under this agreement of $551,000 and $639,000, respectively, which are included in asset management and other fees to related parties for lending segment costs, and $54,000 and $78,000, respectively, for corporate services, which are included in asset management and other fees to related parties. For the six months ended June 30, 2019 and 2018, we incurred expenses related to such services of $1,188,000 and $1,240,000, respectively, which are included in asset management and other fees to related parties for lending segment costs, and $131,000 and $145,000, respectively, for corporate services, which are included in asset management and other fees to related parties. In addition, we deferred personnel costs of $44,000 and $88,000 for the three months ended June 30, 2019 and 2018, respectively, and $50,000 and $136,000 for the six months ended June 30, 2019 and 2018, respectively, associated with services provided for originating loans. At June 30, 2019 and December 31, 2018, $612,000 and $1,347,000, respectively, was due to CIM SBA for costs and expenses of providing such personnel and resources. On May 10, 2018, the Company executed a wholesaling agreement (the "Wholesaling Agreement") with International Assets Advisors, LLC ("IAA") and CCO Capital, LLC ("CCO Capital"). IAA was the exclusive dealer manager for the Company’s public offering of Series A Preferred Units until May 31, 2019. CCO Capital is a registered broker dealer and is under common control with the Operator and the Administrator. Under the Wholesaling Agreement, among other things, CCO Capital, in its capacity as the wholesaler for the offering, assisted IAA with the sale of Series A Preferred Units. In exchange for such services, IAA paid CCO Capital a fee equal to 2.75% of the selling price of each Series A Preferred Unit for which a sale was completed, reduced by any applicable fee reallowances payable to soliciting dealers pursuant to separate soliciting dealer agreements between IAA and soliciting dealers. The foregoing fee was reduced, and could have been exceeded, by a fixed monthly payment by CCO Capital to IAA for IAA’s services in connection with periodic closings and settlements for the offering. On May 31, 2019, the Company, IAA and CCO Capital entered into an Amendment, Assignment and Assumption Agreement (the “Assignment Agreement”), pursuant to which CCO Capital assumed all of the rights and obligations of IAA under the dealer manager agreement, dated as of June 28, 2016, as amended, by and between the Company and IAA. As a result of the Assignment Agreement, CCO Capital became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Units effective as of May 31, 2019. In connection with the execution of the Assignment Agreement, the Company terminated the Wholesaling Agreement effective as of May 31, 2019. At June 30, 2019 and December 31, 2018, $386,000 and $200,000, respectively, was included in deferred costs for CCO Capital fees, of which $133,000 and $138,000, respectively, was included in due to related parties. CCO Capital incurred issuance-specific costs of $102,000, which were allocated to the Series A Preferred Stock for each of the three and six months ended June 30, 2019. Other On October 1, 2015, an affiliate of CIM Group entered into a 5-year lease renewal with respect to a property owned by the Company, which lease was amended to a month-to-month term in February 2019. We recorded rental and other property income related to this tenant of $28,000 and $27,000 for the three months ended June 30, 2019 and 2018, respectively, and $55,000 and $54,000 for the six months ended June 30, 2019 and 2018, respectively. On May 15, 2019, CIM Group entered into an approximately eleven-year lease for approximately 32,000 rentable square feet with respect to a property owned by the Company. For each of the three and six months ended June 30, 2019, we recorded rental and other property income related to this tenant of $206,000. The lease was amended on August 7, 2019 to reduce the rentable square feet to approximately 30,000 rentable square feet.

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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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