Other Expenses

6 Months Ended

Jun. 30, 2024

Other Income and Expenses [Abstract]

Other Expenses

OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our Equity, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our GAAP net income (loss), including realized gains and losses not otherwise recognized in current period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) unrealized gains (losses), (iv) net income (loss) attributable to our legacy portfolio, (v) certain non-cash items, and (vi) incentive management fees.

During the three and six months ended June 30, 2024, we incurred $18.7 million and $37.7 million, respectively, of management fees payable to our Manager compared with $18.6 million and $37.2 million, respectively, during the same periods in 2023. During the three and six months ended June 30, 2024, we did not incur any incentive fees payable to our Manager, compared to $14.2 million and $26.7 million, respectively, during the same periods in 2023.

As of June 30, 2024 we had accrued management fees payable to our Manager of $18.7 million. As of December 31, 2023 we had accrued management and incentive fees payable to our Manager of $26.3 million.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Professional services	$	3,817	$	3,291	$	7,957	$	6,570
Operating and other costs	1,881		2,066		3,357		3,997
Subtotal(1)	5,698		5,357		11,314		10,567
Non-cash compensation expenses
Restricted class A common stock earned	7,761		7,492		15,672		14,984
Director stock-based compensation	201		173		402		336
Subtotal	7,962		7,665		16,074		15,320
Total general and administrative expenses	$	13,660	$	13,022	$	27,388	$	25,887

(1)During the three and six months ended June 30, 2024, we recognized an aggregate $320,000 and $543,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and six months ended June 30, 2023, we recognized an aggregate $288,000 and $596,000, respectively, of expenses related to our Multifamily Joint Venture.