Other Expenses

6 Months Ended

Jun. 30, 2022

Other Income and Expenses [Abstract]

Other Expenses

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 GAAP net income (loss), including realized gains and losses not otherwise recognized in current period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) unrealized gains (losses), (iv) net income (loss) attributable to our legacy portfolio, (v) certain non-cash items, and (vi) incentive management fees.

During the three and six months ended June 30, 2022, we incurred $18.2 million and $36.3 million, respectively, of management fees payable to our manager, compared with $15.6 million and $31.1 million during the same period in 2021. In addition, during the three and six months ended June 30, 2022, we incurred $8.8 million and $14.3 million respectively, of incentive fees payable to our Manager, compared to $6.0 million and $9.6 million during the same period in 2021.

As of June 30, 2022 and December 31, 2021 we had accrued management and incentive fees payable to our Manager of $27.1 million and $28.4 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,
	2022		2021		2022		2021
Professional services	$	2,693	$	2,043	$	5,390	$	3,861
Operating and other costs	1,298		606		2,311		1,301
Subtotal(1)	3,991		2,649		7,701		5,162
Non-cash compensation expenses
Restricted class A common stock earned	8,245		7,895		16,723		15,855
Director stock-based compensation	173		125		345		250
Subtotal	8,418		8,020		17,068		16,105
Total general and administrative expenses	$	12,409	$	10,669	$	24,769	$	21,267

(1)During the three and six months ended June 30, 2022, we recognized an aggregate $227,000 and $544,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and six months ended June 30, 2021, we recognized an aggregate $197,000 and $433,000, respectively, of expenses related to our Multifamily Joint Venture.