Related Party Transactions and Arrangements

Cole Capital

Through February 1, 2018, the Company was contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective Board of Directors of each of the Cole REITs an approach for providing investors with liquidity. In addition, the Company was responsible for raising capital for certain Cole REITs, advised them regarding offerings, managed relationships with participating broker-dealers and financial advisors, and provided assistance in connection with compliance matters relating to the offerings. The Company received compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. As discussed in Note 4 —Discontinued Operations, on February 1, 2018, the Company completed the sale of Cole Capital. The assets and liabilities transferred pursuant to the Cole Capital Purchase and Sale Agreement and related financial results are reflected in the consolidated balance sheets and consolidated statements of operations as discontinued operations for all periods presented. As a result of the sale of Cole Capital, the Cole REITs are no longer affiliated with the Company.

The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and unconsolidated joint ventures for the years ended December 31, 2018, 2017 and 2016 (in thousands).



	Year Ended December 31,
	2018 ⁽¹⁾		2017		2016
Offering-related fees and reimbursements
Selling commissions ⁽²⁾	$	407	$	7,746	$	19,943
Dealer manager and distribution fees ⁽³⁾	431		5,021		8,300
Reimbursement revenue	189		3,329		8,283
Offering-related fees and reimbursements	1,027		16,096		36,526

Transaction service fees and reimbursements
Acquisition fees	119		11,049		9,513
Financing coordination fee	—		100		220
Reimbursement revenues	215		2,780		2,800
Transaction service fees and reimbursements	334		13,929		12,533

Management fees and reimbursements
Asset and property management fees and leasing fees ⁽⁴⁾	161		220		220
Advisory and performance fee revenue	5,023		57,765		51,099
Reimbursement revenues	1,429		18,449		17,587
Management fees and reimbursements	6,613		76,434		68,906

Interest income on Affiliate Lines of Credit	28		262		453

Total related party revenues	$	8,002	$	106,721	$	118,418

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(1)	Represents the revenue earned during the period from January 1, 2018 through January 31, 2018, unless otherwise noted.


(2)	The Company reallowed 100% of selling commissions to participating broker-dealers from January 1, 2018 through January 31, 2018 and during the years ended December 31, 2017 and 2016.


(3)	During the years ended December 31, 2018, 2017 and 2016, the Company reallowed $0.2 million, $2.1 million and $3.2 million, respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker-dealers as a marketing and due diligence expense reimbursement.


(4)	Represents asset and property management fees and leasing fees related to properties owned through the Company’s unconsolidated joint ventures for the years ended December 31, 2018, 2017 and 2016.

Investment in the Cole REITs

On February 1, 2018, the Company sold certain of its equity investments, recognizing a gain of $0.6 million, which is included in other income, net in the accompanying consolidated statement of operations for the year ended December 31, 2018, to the Cole Purchaser, retaining interests in CCIT II, CCIT III and CCPT V. As of December 31, 2018 and 2017, the Company owned aggregate equity investments of $7.8 million and $3.3 million, respectively, in the Cole REITs. During the year ended December 31, 2018, the Company recognized a gain of $5.1 million related to the change in fair value from the carrying value at December 31, 2017, which is included in other income, net in the accompanying consolidated statement of operations. Prior to the sale of Cole Capital, the Company accounted for these investments using the equity method of accounting, which required the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company recorded its proportionate share of net income or loss from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statement of operations for the years ended December 31, 2017 and 2016. During the years ended December 31, 2017 and 2016, the Company recognized a net loss of $0.5 million and $1.3 million from the Cole REITs, respectively.

Due to Cole REITs

As of December 31, 2017, due to affiliates was $0.1 million, related to amounts due to the Cole REITs, which is included in due to affiliates in the accompanying consolidated balance sheet.

Due from Cole REITs

As of December 31, 2017, $4.4 million was expected to be collected from affiliates, excluding any outstanding balances from a line of credit with one of the Cole REITs, discussed below, related to services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements.

On September 23, 2016, the Company entered into a $30.0 million revolving line of credit with Cole Corporate Income Operating Partnership III, LP, the operating partnership of CCIT III, as modified on March 28, 2017 (the “Subordinate Promissory Note”). The Subordinate Promissory Note matured September 30, 2018 and no amounts were outstanding as of December 31, 2018. As of December 31, 2017, $1.6 million was outstanding, which is included in due from affiliates, net in the accompanying consolidated balance sheet.