RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2013

RELATED PARTY TRANSACTIONS {2}

RELATED PARTY TRANSACTIONS

NOTE 6. RELATED PARTY TRANSACTIONS

The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of March 31, 2013 (dollars in thousands):

	Pillar			ARI			Total
Related party payable, December 31, 2012	$	-		$	(10,057	)	$	(10,057	)
Cash transfers		18,644			-			18,644
Advisory fees		(2,138	)		-			(2,138	)
Net income fee		(56	)		-			(56	)
Fees and commissions		(1,516	)		-			(1,516	)
Cost reimbursements		(603	)		-			(603	)
Interest expense		-			(79	)		(79	)
POA fees		(31	)		-			(31	)
Expenses paid by advisor		(2,008	)		-			(2,008	)
Financing (mortgage payments)		123			-			123
Purchase of obligations		(12,415	)		12,336			(79	)
Related party receivable, March 31, 2013	$	-		$	2,200		$	2,200

During the ordinary course of business, we have related party transactions that include, but are not limited to rent income, interest income, interest expense, general and administrative costs, commissions, management fees, and property expenses. In addition, we have assets and liabilities that include related party amounts. The related party amounts included in assets and liabilities, and the related party revenues and expenses received/paid are shown on the face of the financial statements.

Acquisitions from our parent, ARL, have previously been reflected at the fair value purchase price. Upon discussion with the SEC and in review of the guidance pursuant to ASC 250-10-45-22 to 24, we have adjusted those assets to reflect a basis equal to ARL’s cost basis in the asset at the time of the sale. The related party payables to ARL were reduced for the lower asset price.