Note 7. General and Administrative Expenses

As a result of our Investment Management Business Sale, the operating expenses related to our investment management business have been reclassified to income (loss) from discontinued operations on our consolidated statements of operations. See Note 1 for further discussion of the Investment Management Business Sale. General and administrative expenses included in net income from continuing operations for the years ended December 31, 2012, 2011, and 2010 consisted of the following (in thousands):

	Year Ended December 31,
General and Administrative Expenses	2012		2011		2010
Professional services		$895		$2,210		$906
Operating and other costs		1,955		2,489		1,955
Transaction costs - Investment Management Business Sale (1)		3,870		—		—
Transaction costs - March 2011 Restructuring (1)		—		—		1,700
Subtotal		6,720		4,699		4,561

Non-cash personnel costs
Management incentive awards plan - CT Legacy REIT (2)		2,232		3,054		—
Employee stock-based compensation		1,353		505		138
Subtotal		3,585		3,559		138

Expenses of consolidated securitization vehicles		64		724		1,336
Total		$10,369		$8,982		$6,035


(1)	See Note 1 for discussion of the Investment Management Business Sale and the March 2011 Restructuring.
(2)	Represents the accrual of amounts payable under the CT Legacy REIT management incentive awards during the period. See Note 3 for discussion of the CT Legacy REIT management incentive awards plan.

In conjunction with the Investment Management Business Sale, we entered into a new management agreement with our Manager, pursuant to which our Manager earns a base management fee in an amount equal to the greater of (a) $250,000 per annum and (b) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the management agreement with our Manager. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (a) 20% and (b) the excess of (i) our Core Earnings (as defined in the management agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) and (ii) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period (or the period since the date of the first offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio. During 2012, we incurred $9,000 of management fees payable to our Manager, which are included in general and administrative expenses.