Transactions with Related Parties

9 Months Ended

Sep. 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 September 30, 2016, our consolidated balance sheet included $13.7 million of accrued management and incentive fees payable to our Manager. During the three and nine months ended September 30, 2016, we paid $15.8 million and $43.8 million, respectively, of management and incentive fees to our Manager, compared to $8.1 million and $21.0 million during the same periods of 2015. In addition, during the three and nine months ended September 30, 2016, we reimbursed our Manager for $82,000 and $462,000, respectively, of expenses incurred on our behalf. During the nine months ended September 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 September 30, 2015. As of September 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 nine months ended September 30, 2016, CT Legacy Partners made aggregate preferred distributions of $146,000 and $491,000, respectively, to such affiliate, compared to $216,000 and $1.1 million during the same periods of 2015.

As of September 30, 2016, our Manager held 391,871 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $10.9 million. We did not issue any shares of restricted class A common stock to our Manager during the nine months ended September 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 nine months ended September 30, 2016, we recorded non-cash expense related to shares granted to our Manager of $2.5 million and $7.1 million, respectively, compared to $1.6 million and $4.9 million during the same periods of 2015. Refer to Note 13 for further discussion of our restricted class A common stock.

During the three months ended September 30, 2016, we originated a loan to a borrower who engaged an affiliate of our Manager to act as title insurance agent in connection with the transaction. The borrower paid the title insurance agent a fee of $196,000 for its services. We did not incur any expenses or receive any revenues as a result of this transaction.

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 nine months ended September 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 nine months ended September 30, 2016. See Note 11 for further discussion of the CT Legacy Partners Management Incentive Awards Plan.

During the three and nine months ended September 30, 2016, we incurred $112,000 and $282,000, respectively, of expenses for various administrative and capital market data services to third-party service providers that are affiliates of our Manager, compared to $178,000 and $307,000 during the same periods of 2015.