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Transactions with Related Parties (Tables)
3 Months Ended
Mar. 31, 2018
Related Party Transactions [Abstract]  
Summary of Related Party Transactions

The following table summarizes the Company’s related party transactions for the three-month periods ended March 31, 2018 and 2017:

 

 

 

Three-month period ended

March 31,

 

 

Payable as of March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Organization and offering expense reimbursement(1)

 

$

121,943

 

 

$

213,351

 

 

$

1,345,495

 

 

$

1,188,317

 

Selling commissions and dealer manager fee(2)

 

 

1,296,032

 

 

 

142,366

 

 

 

 

 

 

 

Advisory fee(3)

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense reimbursement(4)

 

 

1,536

 

 

 

88,899

 

 

 

1,536

 

 

 

109,650

 

Total

 

$

1,419,511

 

 

$

444,616

 

 

$

1,347,031

 

 

$

1,297,967

 

 

(1)

The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Offering, provided that aggregate reimbursements of such costs and expenses shall not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. Offering costs are offset against stockholders’ equity when paid. Unpaid amounts are recorded as deferred offering costs and included in due to related parties in these consolidated balance sheets.

(2)

Inland Securities Corporation, the Company’s dealer manager and an affiliate of the Advisor, receives selling commissions up to 5%, and a dealer manager fee up to 3%, of the Transaction Price for each Class P Share sold in the Offering, the majority of which is paid to third-party broker-dealers.

(3)

The Company pays the Advisor an advisory fee comprised of (1) a fixed component and (2) a performance component. The fixed component of the advisory fee is paid quarterly in arrears in an amount equal to 1/4th of 1.5% of the average aggregate value of the Company’s assets over such quarter, where the value of each asset shall be the value determined in accordance with the Company’s valuation policies or, if such value has not yet been determined, the book value of the asset. The performance component of the advisory fee is calculated and paid annually with respect to the Class P Shares, such that for any year in which the Company’s total return per Class P Share exceeds 7% per annum, the Advisor will receive 20% of the excess total return allocable to the Class P Shares; provided that in no event will the performance component of the advisory fee exceed 15% of the aggregate total return allocable to Class P Shares for such year. The Advisor has waived the advisory fee for the three months ended March 31, 2018 and 2017.

(4)

The Company reimburses the Advisor or its affiliates for out-of-pocket expenses that it incurs in connection with providing services to the Company, provided that the Company does not reimburse overhead costs, including rent and utilities or personnel costs (including salaries, bonuses, benefits and severance payments).