Other Expenses

6 Months Ended

Jun. 30, 2021

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 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) certain non-cash items, and (v) incentive management fees.

During the three and six months ended June 30, 2021, we incurred $15.6 million and $31.1 million, respectively, of management fees payable to our Manager, compared to $14.8 million and $29.2 million during the same period in 2020. In addition, during the three and six months ended June 30, 2021, we incurred $6.0 million and $9.6 million, respectively, of incentive fees payable to our Manager, compared to $5.7 million and $10.5 million during the same period in 2020.

As of June 30, 2021 and December 31, 2020 we had accrued management and incentive fees payable to our Manager of $21.5 million and $19.2 million, respectively. During the three months ended June 30, 2020, we issued 840,696 shares of class A common stock to our Manager in satisfaction of our aggregate $19.3 million of management and incentive fees accrued in the first quarter of 2020.

General and Administrative Expenses

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Professional services(1)	$	2,043	$	1,752	$	3,861	$	3,414
Operating and other costs(1)		606		882		1,301		2,335
Subtotal		2,649		2,634		5,162		5,749
Non-cash compensation expenses
Restricted class A common stock earned		7,895		8,527		15,855		17,079
Director stock-based compensation		125		125		250		250
Subtotal		8,020		8,652		16,105		17,329
Total general and administrative expenses	$	10,669	$	11,286	$	21,267	$	23,078

(1)   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. During the three and six months ended June 30, 2020, we recognized an aggregate $200,000 and $576,000, respectively, of expenses related to our Multifamily Joint Venture.