Related Party Transactions

12 Months Ended

Dec. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

We engage in certain business transactions with related parties, including but not limited to acquisitions and dispositions of real estate. 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 our best interest.

Pillar and Regis are wholly owned by affiliates of the MRHI, which indirectly owns approximately 90.8% of our common shares. Pillar is compensated for services in accordance with an Advisory Agreement. Regis receives property management fees and leasing commissions in accordance with the terms of its property-level management agreement. In addition, Regis is entitled to receive real estate brokerage commissions in accordance with the terms of a non-exclusive brokerage agreement.

Rental income includes $652, $882 and $931 for the years ended December 31, 2024, 2023 and 2022, respectively, for office space leased to Pillar and Regis.

Property operating expense includes $346, $366 and $433 for the years ended December 31, 2024, 2023 and 2022, respectively, for management fees on commercial properties payable to Regis.

General and administrative expense includes $3,871, $4,006 and $4,191 for the years ended December 31, 2024, 2023 and 2022, respectively, for employee compensation and other reimbursable costs payable to Pillar.

Advisory fees paid to Pillar were $8,225, $10,187 and $8,753 for the years ended December 31, 2024, 2023 and 2022, respectively. Development fees paid to Pillar were $2,236 and $649 for the year ended December 31, 2024 and 2023, respectively.

Notes receivable include amounts held by UHF (See Note 9 – Notes Receivable). UHF is deemed to be a related party due to our significant investment in the performance of the collateral secured by the notes receivable. In addition, we have a related party receivable from Pillar ("Pillar Receivable"), which represents amounts advanced to Pillar net of unreimbursed fees, expenses and costs as provided above. The Pillar Receivable bears interest in accordance with a cash management agreement. On January 1, 2024, an amendment to the cash management agreement changed the interest rate on the Pillar Receivable from prime plus one percent to SOFR. Interest income on the UHF notes and the Pillar Receivable was $8,985, $13,260 and $15,600 for the years ended December 31, 2024, 2023 and 2022, respectively. Accrued interest on the UHF notes of $1,855 and $2,012 is included in other assets at December 31, 2024 and 2023, respectively.