Note 11 — Related Party Transactions and Arrangements

The Advisor, individual members of the Advisor, and employees or former employees of the Advisor hold interests in the OP. See Note 15 — Non-Controlling Interests.

Realty Capital Securities, LLC (the "Former Dealer Manager") served as the dealer manager of the IPO, which was ongoing from September 2010 to December 2013, and, together with its affiliates, continued to provide the Company with various services through December 31, 2015. RCS Capital Corporation, the parent company of the Former Dealer Manager and certain of its affiliates that provided services to the Company, filed for Chapter 11 bankruptcy protection in January 2016, prior to which it was also under common control with AR Global, parent of the Sponsor.

Viceroy Hotel

The following table details revenues from related parties at the Viceroy Hotel. The Company did not have any receivables from related parties as of March 31, 2016 or December 31, 2015.



	Three Months Ended March 31,
(In thousands)	2016		2015
Hotel revenues	$	13	$	22

Advisor and its Affiliates

The Company pays to the Advisor an asset management fee equal to 0.50% per annum of the cost of assets up to $3.0 billion and 0.40% per annum of the cost of assets above $3.0 billion. The asset management fee is payable in the form of cash, OP units, and shares of restricted common stock of the Company, or a combination thereof, at the Advisor’s election. The Company has paid this fee in cash since the Listing.

Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee equal to: (i) for non-hotel properties, 4.0% of gross revenues from properties managed, plus market-based leasing commissions; and (ii) for hotel properties, a market-based fee equal to a percentage of gross revenues. The Company also reimburses the Property Manager for property-level expenses. The Property Manager may subcontract the performance of its property management and leasing services duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services. If the Company contracts directly with third parties for such services, the Company will pay them customary market fees and pay the Property Manager an oversight fee equal to 1.0% of the gross revenues of the applicable property.

The Company reimburses the Advisor for costs and expenses paid or incurred by the Advisor and its affiliates in connection with providing services to the Company (including reasonable salaries and wages, benefits and overhead of all employees directly involved with the performance of such services), although the Company will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives a separate fee. Prior to June 2015, reimbursement of costs and expenses was subject to the limitation that the Company would not reimburse the Advisor for any amount by which the Company's total operating expenses (as defined in the Advisory Agreement (defined below) during the applicable time) for the four preceding fiscal quarters exceeded the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt or other similar non cash reserves and excluding any gain from the sale of assets for that period (the "2%/25% Limitation"). The Company amended and restated its advisory agreement on June 26, 2015 (as amended from time to time, the "Advisory Agreement"), which, among other things, removed the 2%/25% Limitation. Total reimbursement of costs and expenses for the three months ended March 31, 2016 was $0.7 million. The Company did not reimburse the Advisor for costs and expenses incurred during the three months ended March 31, 2015.

If the Company acquires additional properties, the Company will reimburse the Advisor for expenses incurred by the Advisor or its affiliates for services provided by third parties and acquisition expenses incurred by the Advisor or its affiliates on their own behalf or directly from third parties, but is not obligated to pay to the Advisor or any of its affiliates additional fees.

The predecessor to the parent of the Sponsor was party to a services agreement with RCS Advisory Services, LLC, a subsidiary of the parent company of the Former Dealer Manager ("RCS Advisory"), pursuant to which RCS Advisory and its affiliates provided the Company and certain other companies sponsored by the Sponsor with services (including, without limitation, transaction management, compliance, due diligence, event coordination and marketing services, among others) on a time and expenses incurred basis or at a flat rate based on services performed. The predecessor to the parent of the Sponsor instructed RCS Advisory to stop providing such services in November 2015 and no services have since been provided by RCS Advisory.

The Company was also party to a transfer agency agreement with American National Stock Transfer, LLC, a subsidiary of the parent company of the Former Dealer Manager ("ANST"), pursuant to which ANST provided the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services), and supervisory services overseeing the transfer agency services performed by DST Systems, Inc., a third-party transfer agent ("DST"). The Sponsor received written notice from ANST on February 10, 2016 that it would wind down operations by the end of the month and would withdraw as the transfer agent effective February 29, 2016. DST continued to provide the Company with transfer agency services and, on March 10, 2016, the Company entered into a definitive agreement with DST to provide the Company directly with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services). For the three months ended March 31, 2016, these services are included in general and administrative expenses on the consolidated statements of operations and comprehensive income (loss) during the period in which the service was provided.

The following table details amounts incurred, waived and contractually due in connection with the operations related services described above as of and for the periods presented:



	Three Months Ended March 31,								Payable (Receivable) as of
	2016				2015				March 31,			December 31,
(In thousands)	Incurred		Waived		Incurred		Waived		2016			2015
Asset management fees	$	3,074	$	—	$	3,144	$	—	$	(1	)	$	(7	)
Transfer agent and other professional fees	693		—		184		—		201			99
Property management fees	—		485		—		536		—			—
Total related party operational fees and reimbursements	$	3,767	$	485	$	3,328	$	536	$	200		$	92

In order to improve operating cash flows and the ability to pay dividends from operating cash flows, the Advisor agreed to waive certain fees, including property management fees, during the three months ended March 31, 2016 and 2015. Because the Advisor waived these fees, cash flow from operations that would have been paid to the Advisor was available to pay dividends to stockholders. The fees that were waived were not deferrals and accordingly, will not be paid to the Advisor in any subsequent periods.

For substantial assistance in connection with the sale of properties, the Company may pay the Advisor a property disposition fee not to exceed the lesser of 2.0% of the contract sale price of the property and 50% of the competitive real estate commission paid if a third party broker is also involved; provided, however that in no event may the property disposition fee paid to the Advisor when added to real estate commissions paid to unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a competitive real estate commission. For purposes of the foregoing, "competitive real estate commission" means a real estate brokerage commission for the purchase or sale of a property which is reasonable, customary and competitive in light of the size, type and location of the property. The Company incurred and paid $0.2 million in property disposition fees during the three months ended March 31, 2016. No such fees were incurred or paid during the three months ended March 31, 2015.