Other Expenses

6 Months Ended

Jun. 30, 2019

Other Income and Expenses [Abstract]

Other Expenses

12. OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our outstanding equity balance, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.

During the three and six months ended June 30, 2019, we incurred $13.3 million and $26.4 million, respectively, of management fees payable to our Manager, compared to $11.1 million and $22.2 million during the same periods in 2018. In addition, during the three and six months ended June 30, 2019, we incurred $7.7 million and $14.4 million, respectively, of incentive fees payable to our Manager, compared to $11.3 million and $15.7 million during the same periods in 2018.

As of June 30, 2019 and December 31, 2018 we had accrued management and incentive fees payable to our Manager of $21.0 million and $18.6 million, respectively.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Professional services(1)	$	1,249	$	1,139	$	2,439	$	2,361
Operating and other costs(1)		894		830		1,249		1,339
Subtotal		2,143		1,969		3,688		3,700
Non-cash compensation expenses
Restricted class A common stock earned		7,629		6,653		15,272		13,504
Director stock-based compensation		125		125		250		250
Subtotal		7,754		6,778		15,522		13,754
Total general and administrative expenses	$	9,897	$	8,747	$	19,210	$	17,454
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(1) During the three and six months ended June 30, 2019, we recognized an aggregate $164,000 and $333,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and six months ended June 30, 2018, we recognized an aggregate $124,000 and $225,000, respectively, of expenses related to our Multifamily Joint Venture.