Transactions With Related Parties

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Transactions With Related Parties

17. TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2019, and will be automatically renewed for a one-year term upon such date and each anniversary thereafter unless earlier terminated.

As of September 30, 2019 and December 31, 2018, our consolidated balance sheets included $17.5 million and $18.6 million of accrued management and incentive fees payable to our Manager, respectively. During the three and nine months ended September 30, 2019, we paid aggregate management and incentive fees of $21.0 million and $59.4 million, respectively, to our Manager, compared to $22.4 million and $52.2 million during the same periods of 2018. In addition, during the three and nine months ended September 30, 2019, we reimbursed our Manager for expenses incurred on our behalf of $335,000 and $766,000, respectively, compared to $167,000 and $572,000 during the same periods of 2018.

As of September 30, 2019, our Manager held 606,376 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $19.2 million, and vest in installments over three years from the date of issuance. During the three and nine months ended September 30, 2019, we recorded non-cash expenses related to shares held by our Manager of $3.8 million and $11.5 million, respectively, compared to $3.2 million and $9.6 million during the same periods of 2018. Refer to Note 14 for further details on our restricted class A common stock.

An affiliate of our Manager is the special servicer of the CLO. This affiliate did not earn any special servicing fees related to the CLO during the nine months ended September 30, 2019 or 2018.

During the three and nine months ended September 30, 2019, we incurred $106,000 and $282,000, respectively, of expenses for various administrative, compliance, and capital market data services to third-party service providers that are affiliates of our Manager, compared to $90,000 and $384,000 during the same periods of 2018.

During the nine months ended September 30, 2019 and 2018, we originated two loans and three loans, respectively, whereby each respective borrower engaged an affiliate of our Manager to act as title insurance agent in connection with each transaction. We did not incur any expenses or receive any revenues as a result of these transactions.

In the third quarter of 2019, we originated $214.3 million of a total $437.4 million senior loan to an unaffiliated third-party, which was part of a total financing that included a mezzanine loan originated by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under our loan, including voting rights, so long as any Blackstone-advised investment vehicle controls the mezzanine loan. The senior loan terms, with respect to the mezzanine lender, were negotiated by a third party without our involvement and our 49% interest in the senior loan was made on such market terms.

In the third quarter of 2019, we acquired €125.0 million, and agreed to acquire an incremental €125.0 million, of a total €1.6 billion senior loan to a borrower that is partially owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by third parties without our involvement and our 16% interest in the senior loan was made on such market terms.

In the second quarter of 2019, certain Blackstone-advised investment vehicles acquired an aggregate $55.0 million participation, or 11% of the total Secured Term Loan as a part of a broad syndication lead-arranged by JP Morgan. Blackstone Advisory Partners L.P., an affiliate of our Manager, was engaged as a book-runner for the transaction and received a fee of $500,000 in such capacity. Both of these transactions were on terms equivalent to those of unaffiliated parties.

In the second quarter of 2019, we originated €191.8 million of a total €391.3 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third party without our involvement and our 49% interest in the senior loan was made on such market terms.

In the first quarter of 2019, we originated £240.1 million of a total £490.0 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third party without our involvement and our 49% interest in the senior loan was made on such market terms.    

In the third quarter of 2018, in a fully subscribed offering totaling $1.0 billion, certain Blackstone-advised investment vehicles purchased, in the aggregate, $116.1 million of securitized debt obligations issued by the 2018 Single Asset Securitization.

In the second quarter of 2018, we acquired from an unaffiliated third-party a 50% interest in a $1.0 billion senior loan to a borrower that is partially owned by a Blackstone-advised investment vehicle. In the third quarter of 2018, we contributed this loan to the 2018 Single Asset Securitization and invested in the related subordinate risk retention position. We will forgo all non-economic rights under the loan, including voting rights, so long as Blackstone-advised investment vehicles own the borrower above a certain threshold. Refer to Note 16 for further details on this transaction.

In the first quarter of 2018, we originated €1.0 billion of a total €7.3 billion senior term facility, or the Senior Term Facility, for the acquisition of a portfolio of Spanish real estate assets and a Spanish real estate management and loan servicing company by a joint venture between Banco Santander S.A. and certain Blackstone-advised investment vehicles. These investment vehicles own 51% of the joint venture, and we will forgo all non-economic rights under the Senior Term Facility, including voting rights, so long as Blackstone-advised investment vehicles control the joint venture. The Senior Term Facility was negotiated by the joint venture with third-party investment banks without our involvement, and our 14% interest in the Senior Term Facility was made on such market terms.

In the first quarter of 2018, we originated a $330.0 million senior loan, the proceeds of which were used by the borrower to repay an existing loan owned by a Blackstone-advised investment vehicle.