Related Party Transactions

9 Months Ended

Sep. 30, 2025

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

We engage in certain business transactions with related parties, including but not limited to asset acquisition 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 a subsidiary of May Realty Holdings, Inc. ("MRHI"), which owns approximately 90.8% of ARL, which in turn owns approximately 78.4% of the Company. Pillar is compensated for advisory services in accordance with an advisory agreement and is compensated for development services in accordance with project specific agreements. 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 $146 and $159 for the three months ended September 30, 2025 and 2024, respectively, and $435 and $495 for the nine months ended September 30, 2025 and 2024, respectively, for office space leased to Pillar and Regis.

Property operating expense includes $90 and $87 for the three months ended September 30, 2025 and 2024, respectively, and $264 and $253 for the nine months ended September 30, 2025 and 2024, respectively, for management fees on commercial properties payable to Regis.

General and administrative expense includes $967 and $879 for the three months ended September 30, 2025 and 2024, respectively, and $2,963 and $2,688 for the nine months ended September 30, 2025 and 2024, respectively, for employee compensation and other reimbursable costs payable to Pillar.

Advisory fees paid to Pillar were $2,151 and $1,944 for the three months ended September 30, 2025 and 2024, respectively, and $6,587 and $5,789 for the nine months ended September 30, 2025 and 2024, respectively. Development fees paid to Pillar were $47 and $525 for the three months ended September 30, 2025 and 2024, respectively, and $1,265 and $1,501 for the nine months ended September 30, 2025 and 2024, 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. The interest rate on the Pillar Receivable is the SOFR on the last day of the preceding quarter. Interest income on the UHF notes and the Pillar Receivable was $2,540 and $2,711 for the three months ended September 30, 2025 and 2024, respectively, and $7,578 and $8,084 for the nine months ended September 30, 2025 and 2024, respectively.