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Related Party Transactions
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
The table below outlines fees and expense reimbursements incurred that are payable by the Company to the Advisor and Hines Private Wealth Solutions LLC. (the "Dealer Manager"), Hines and its affiliates for the periods indicated below (in thousands):
Incurred
Three Months Ended June 30,Six Months Ended June 30,Unpaid as of
Type and Recipient2024202320242023June 30, 2024December 31, 2023
Selling Commissions- Dealer Manager (1)
$502 $848 $847 $1,958 $— $— 
Dealer Manager Fee- Dealer Manager (1)
31 90 55 190 — — 
Distribution & Stockholder Servicing Fees- Dealer Manager (1)
(38)1,940 (160)4,537 54,395 59,103 
Organization and Offering Costs- the Advisor2,414 2,699 4,155 4,013 702 778 
Asset Management Fees- the Advisor (2)
8,414 7,498 16,696 15,001 2,624 2,860 
Other- the Advisor (3)
1,511 1,110 3,121 2,160 1,967 2,688 
Property Management Fees- Hines and its affiliates1,821 1,631 3,611 3,219 549 440 
Development and Construction Management Fees- Hines and its affiliates (4)
1,780 505 2,129 612 1,482 424 
Leasing Fees- Hines and its affiliates (5)
248 354 551 631 925 1,488 
Expense Reimbursement- Hines and its affiliates (with respect to management and operations of the Company's properties) (6)
4,035 3,648 8,185 7,404 (5,725)(7)(1,856)(7)
Total$20,718 $20,323 $39,190 $39,725 $56,919 $65,925 
(1)Some or all of these fees may be reallowed to participating broker dealers rather than being retained by the Dealer Manager.
(2)The Advisor is paid an asset management fee equal to 0.0625% per month of (a) the value of the Company’s real estate investments and (b) the aggregate proceeds received by the Company or its subsidiary for selling interests in properties in the DST Program to third party investors, net of up-front fees and expense reimbursements payable out of the gross sale proceeds from the sale of such DST Proceeds at the end of each month. The Advisor waived 50% of the asset management fee payable with respect to the DST Program through December 31, 2024. The Advisor is under no obligation to continue this waiver beyond that date. In no event will the asset management fee exceed an amount equal to 1/12th of 1.25% of the Company's net asset value.
(3)Includes amounts the Advisor paid on behalf of the Company such as general and administrative expenses and acquisition-related expenses.  These amounts are generally reimbursed to the Advisor during the month following the period in which they are incurred.
(4)Development and construction management fees are included in the total project costs of the respective properties and are capitalized in construction in progress, which is included in investment property, net, on the Company’s condensed consolidated balance sheets.
(5)Leasing fees are capitalized in deferred leasing costs, net, on the Company’s condensed consolidated balance sheets and amortized over the life of the lease.
(6)Includes amounts with respect to the management and operation of the Company’s properties, such as allocated rent paid to affiliates of our Advisor, equipment, utilities, insurance, travel and entertainment. These amounts are generally reimbursed to Hines and its affiliates during the month following the period in which they are incurred. Reimbursement of third party costs are not included in the incurred amounts.
(7)As of June 30, 2024 and December 31, 2023, the balance included $7.0 million and $3.3 million, respectively, in receivables related to rents collected by the Hines-affiliated property managers at the international student housing properties and UK industrial properties, which were being held in the property manager controlled bank accounts.
DST Program Fees
In connection with the DST Program described in Note 5 – DST Program, Hines Real Estate Exchange LLC (“HREX”), a wholly-owned subsidiary of the Operating Partnership, entered into a dealer manager agreement with the Dealer Manager, pursuant to which the Dealer Manager agreed to conduct the private placements of up to $1.0 billion of beneficial interests in specific DSTs. As compensation for conducting these private placements, HREX will pay the Dealer Manager upfront selling commissions, upfront dealer manager fees and O&O fees of up to 5.0%, 1.0% and 1.25%, respectively, of the gross purchase price per unit of beneficial interest sold in the DST Program. In addition, with respect to Class S DST interests, HREX will pay the Dealer Manager ongoing fees in amounts up to 0.25% of the equity investment per year. All of these fees are funded by the private investors in the DST Program at the time of their investment or through deductions from distributions paid to such investors. The Dealer Manager may re-allow such commissions, ongoing fees and a portion of such dealer manager fees to participating broker dealers. These fees totaled $2.8 million and $5.2 million for the three and six months ended June 30, 2024, respectively, and $1.4 million and $2.3 million for the three and six months ended June 30, 2023,respectively.