Transactions with Related Parties

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Transactions with Related Parties

15. TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to a management agreement, the current term of which expires on December 19, 2016, and will be automatically renewed for a one-year term each anniversary thereafter unless earlier terminated.

As of June 30, 2016, our consolidated balance sheet included $15.8 million of accrued management and incentive fees payable to our Manager. During the three and six months ended June 30, 2016, we paid $13.6 million and $28.0 million, respectively, of management and incentive fees to our Manager, compared to $6.7 million and $12.9 million during the same periods of 2015. In addition, during the three and six months ended June 30, 2016, we reimbursed our Manager for $59,000 and $380,000, respectively, of expenses incurred on our behalf. During the six months ended June 30, 2015, we reimbursed our Manager for $139,000 of expenses incurred on our behalf. We did not reimburse our Manager for any expenses incurred on our behalf during the three months ended June 30, 2015. As of June 30, 2016, our consolidated balance sheet includes $31,000 of preferred distributions payable by CT Legacy Partners to an affiliate of our Manager, compared to $83,000 as of December 31, 2015. During the three and six months ended June 30, 2016, CT Legacy Partners made aggregate preferred distributions of $121,000 and $345,000, respectively, to such affiliate, compared to $389,000 and $841,000 during the same periods of 2015.

As of June 30, 2016, our Manager held 476,203 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $13.2 million. We did not issue any shares of restricted class A common stock to our Manager during the six months ended June 30, 2016. The shares of restricted class A common stock vest ratably in quarterly installments over three years from the date of issuance. During the three and six months ended June 30, 2016, we recorded non-cash expense related to shares granted to our Manager of $2.5 million and $4.6 million, respectively, compared to $1.9 million and $3.3 million during the same periods of 2015. Refer to Note 13 for further discussion of our restricted class A common stock.

On May 8, 2015, a joint venture of CT Legacy Partners, certain affiliates of our Manager, and other non-affiliated parties, which we refer to as the Three-Pack JV, sold a hotel portfolio it owned to an investment vehicle managed by an affiliate of our Manager. We consented to the sale of the hotel portfolio by the Three-Pack JV, which will result in the ultimate liquidation of the Three-Pack JV and distribution of net sale proceeds to CT Legacy Partners in respect of its investment therein. An aggregate of $40.1 million of net sales proceeds has been received to date by CT Legacy Partners, of which $2.4 million was received during the six months ended June 30, 2016. As a result of the sale transaction, employees of our Manager, including certain of our executive officers, received incentive compensation payments totaling $2.7 million under the CT Legacy Partners Management Incentive Awards Plan, of which $2.5 million was paid during 2015, and the remaining $162,000 was paid during the six months ended June 30, 2016. All of the income from the sale of the hotel portfolio and related compensation expense was recorded during 2015. See Note 11 for further discussion of the CT Legacy Partners Management Incentive Awards Plan.

During the three and six months ended June 30, 2016, we incurred $80,000 and $170,000, respectively, of expenses for various administrative and capital market data services to third-party service providers that are affiliates of our Manager, compared to $54,000 and $129,000 during the same periods of 2015.