Transactions with Related Parties (Tables)

6 Months Ended

Jun. 30, 2023

The following table summarizes the Company’s related party transactions for the three and six months ended June 30, 2023 and 2022. Certain compensation and fees payable to the Business Manager for services provided to the Company are limited to maximum amounts.


		Three Months Ended June 30,				Six Months Ended June 30,				Unpaid amounts (f) as of
		2023		2022		2023		2022		June 30, 2023		December 31, 2022
General and administrative reimbursements	(a)	$	505	$	406	$	942	$	803	$	298	$	241
Loan costs	(b)	$	—	$	10	$	—	$	42	$	—	$	—
Acquisition related costs	(c)	$	—	$	19	$	—	$	19	$	—	$	—

Real estate management fees		$	1,381	$	1,233	$	2,876	$	2,360	$	—	$	—
Property operating expenses			533		356		1,001		679		20		24
Construction management fees			99		15		99		15		36		45
Leasing fees			89		120		156		205		163		132
Total real estate management related costs	(d)	$	2,102	$	1,724	$	4,132	$	3,259	219		$	201

Business management fees	(e)	$	2,300	$	2,549	$	5,016	$	4,793	$	2,301	$	2,713

(a)

The Business Manager and its related parties are entitled to reimbursement for certain general and administrative expenses incurred by the Business Manager or its related parties relating to the Company’s administration. Such costs are included in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Unpaid amounts are included in due to related parties on the consolidated balance sheets.

(b)

The Business Manager and its related parties are entitled to reimbursement for certain legal costs related to securing financing for the Company. Such costs are capitalized as debt issuance costs on the consolidated balance sheets and amortized into interest expense on the consolidated statements of operations and comprehensive income (loss) over the term of the related financing. Unpaid amounts are included in due to related parties in the consolidated balance sheets.

(c)

The Business Manager and its related parties are reimbursed for acquisition and transaction related costs of the Business Manager and its related parties relating to the Company's acquisition activities, regardless of whether the Company acquires the real estate assets. All of the $19 related party acquisition costs incurred during the six months ended June 30, 2022 are capitalized in the accompanying consolidated balance sheets. See Note 4 - "Acquisitions" for further information.

(d)

For each property that is managed by Inland Commercial Real Estate Services LLC (the “Real Estate Manager”) (and its predecessor), the Company pays a monthly real estate management fee of up to 1.9% of the gross income from any single-tenant, net-leased property, and up to 3.9% of the gross income from any other property type. The Real Estate Manager determines, in its sole discretion, the amount of the fee with respect to a particular property, subject to the limitations. For each property that is managed directly by the Real Estate Manager or its affiliates, the Company pays the Real Estate Manager a separate leasing fee. Further, in the event that the Company engages its Real Estate Manager to provide construction management services for a property, the Company pays a separate construction management fee. Leasing fees are included in deferred costs, net and construction

management fees are included in building and other improvements in the consolidated balance sheets. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses and benefits of persons performing services for the Real Estate Manager and its affiliates except for the salaries, bonuses and benefits of persons who also serve as an executive officer of the Real Estate Manager or the Company. Real estate management fees and reimbursable expenses are included in property operating expenses in the consolidated statements of operations and comprehensive income (loss).

(e)

Prior to April 1, 2023, the Company paid the Business Manager an annual business management fee equal to 0.65% of its “average invested assets.” The fee is payable quarterly in an amount equal to 0.1625% of its average invested assets as of the last day of the immediately preceding quarter. Effective April 1, 2023, the Company paid the Business Manager an annual business management fee equal to 0.55% of its "averaged invested assets." The fee is payable quarterly in an amount equal to 0.1375% of its average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties on the consolidated balance sheets.

(f)

In this table, unpaid amounts as of December 31, 2022 does not reflect $879 due to IRPF related to tenant reconciliations for the eight properties acquired during 2022.