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Agreements and Transactions with Related Parties
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Agreements and Transactions with Related Parties Agreements and Transactions with Related Parties
Advisory Agreements and Partnership Agreements with the Managed Programs and NLOP

We currently have advisory arrangements with CESH, pursuant to which we earn fees and are entitled to receive reimbursement for certain fund management expenses. Upon completion of the CPA:18 Merger on August 1, 2022 (Note 4), our advisory agreements with CPA:18 – Global were terminated, and we ceased earning revenue from CPA:18 – Global. The NLOP Advisory Agreements are described in Note 3.

The following tables present a summary of revenue earned, reimbursable costs, and distributions of Available Cash received/accrued from the Managed Programs, NLOP, and Watermark Lodging Trust, Inc. (“WLT”) (a former affiliate) for the periods indicated, included in the consolidated financial statements (in thousands):
 Years Ended December 31,
 202320222021
Asset management revenue (a)
$2,184 $8,467 $15,363 
Other advisory income and reimbursements (a)
667 — — 
Reimbursable costs from affiliates (a)
368 2,518 4,035 
Distributions of Available Cash (b)
— 8,746 7,345 
Interest income on loans to affiliates (c)
— 112 120 
$3,219 $19,843 $26,863 
Years Ended December 31,
202320222021
NLOP$1,912 $— $— 
CESH1,307 1,989 3,713 
CPA:18 – Global— 17,854 22,867 
WLT (reimbursed transition services)— — 283 
 $3,219 $19,843 $26,863 
__________
(a)Amounts represent revenues from contracts under ASC 606.
(b)Included within Earnings (losses) from equity method investments in the consolidated statements of income.
(c)Included within Non-operating income in the consolidated statements of income.
The following table presents a summary of amounts due from affiliates, which are included within Other assets, net in the consolidated financial statements (in thousands):
December 31,
20232022
Asset management fees receivable$1,349 $386 
Accounts receivable768 329 
Reimbursable costs59 204 
$2,176 $919 

Performance Obligations and Significant Judgments

The fees earned pursuant to our advisory agreements are considered variable consideration. For the agreements that include multiple performance obligations, including asset management services, revenue is allocated to each performance obligation based on estimates of the price that we would charge for each promised service if it were sold on a standalone basis.

Judgment is applied in assessing whether there should be a constraint on the amount of fees recognized, such as amounts in excess of certain threshold limits with respect to the contract price or any potential clawback provisions included in certain of our arrangements. We exclude fees subject to such constraints to the extent it is probable that a significant reversal of those amounts will occur.

Asset Management Revenue

Under the advisory agreement with CESH, we earn asset management revenue at a rate of 1.0% based on its gross assets at fair value, paid in cash. Under the advisory agreement with NLOP, we earn an asset management fee of approximately $7.5 million annually, which will be proportionately reduced following the disposition of a portfolio property.

The performance obligation for asset management services is satisfied over time as services are rendered. The time-based output method is used to measure progress over time, as this is representative of the transfer of the services. We are compensated for our services on a monthly or quarterly basis. However, these services represent a series of distinct daily services under ASC 606, Revenue from Contracts with Customers. Accordingly, we satisfy the performance obligation and resolve the variability associated with our fees on a daily basis. We apply the practical expedient and, as a result, do not disclose variable consideration attributable to wholly or partially unsatisfied performance obligations as of the end of the reporting period.

In providing asset management services, we are reimbursed for certain costs. Direct reimbursement of these costs does not represent a separate performance obligation. Payment for asset management services is typically due on the first business day following the month of the delivery of the service.

Other Advisory Income and Reimbursements

Under the advisory agreement with NLOP, we earn a base administrative amount of approximately $4.0 million annually, for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other administrative matters, paid in cash.

Reimbursable Costs from Affiliates

CESH reimburses us in cash for certain personnel and overhead costs that we incur on its behalf, based on actual expenses incurred.

Distributions of Available Cash

We were entitled to receive distributions of up to 10% of the Available Cash (as defined in CPA:18 – Global’s partnership agreement) from the operating partnership of CPA:18 – Global, payable quarterly in arrears. After completion of the CPA:18 Merger on August 1, 2022 (Note 4), we no longer receive distributions of Available Cash from CPA:18 – Global.
Back-End Fees and Interests in the Managed Programs

Under our advisory arrangements with CESH, we may also receive compensation in connection with providing a liquidity event for its investors. Such back-end fees or interests include or may include interests in disposition proceeds. There can be no assurance as to whether or when any back-end fees or interests will be realized. Pursuant to the terms of the definitive merger agreement, in connection with the closing of the CPA:18 Merger, we waived certain back-end fees that we would have been entitled to receive from CPA:18 – Global upon its liquidation pursuant to the terms of our advisory agreement and partnership agreement with CPA:18 – Global (Note 4).

Other Transactions with Affiliates

Loans to Affiliates

From time to time, our board of directors (our “Board”) has approved the making of secured and unsecured loans or lines of credit from us to certain of the Managed Programs, at our sole discretion, generally for the purpose of facilitating acquisitions or for working capital purposes. In July 2022, CPA:18 – Global repaid the $16.0 million principal outstanding balance on its line of credit in full. The loan agreement with CPA:18 – Global was terminated upon completion of the CPA:18 Merger on August 1, 2022. No such line of credit with CESH existed during the reporting period.

Other

At December 31, 2023, we owned interests in eight jointly owned investments in real estate, with the remaining interests held by third parties. We consolidate four such investments and account for the remaining four investments under the equity method of accounting (Note 9). In addition, we owned limited partnership units of CESH at that date. We elected to account for our investment in CESH under the fair value option (Note 9).