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Note 13- Related Party Transactions
6 Months Ended
Jun. 30, 2022
Related Party Transactions [Abstract]  
Related Party Transactions

Note 13 – Related Party Transactions

Receivables and Payables

As of June 30, 2022 and December 31, 2021, the Company had $0.4 million and $0.2 million, respectively, in receivables due from related parties, included in Other assets, net on the consolidated balance sheets, which relates to receivables due from properties managed by the Company which were provided to the properties for working capital. Additionally, as of June 30, 2022 and December 31, 2021, the Company had $1.2 million and $0.6 million, respectively, in payables due to properties managed by the Company related to amounts borrowed by the Company for working capital, which are reflected in Payables due to related parties on the consolidated balance sheets.

Approximately $0.3 million of the Company’s total revenue for each of the three months ended June 30, 2022 and 2021 was generated from related parties, while approximately $0.4 million and $0.8 million of the Company's total revenue for the six months ended June 30, 2022 and 2021, respectively, was generated from related parties. Additionally, approximately $0.3 million and $0.1 million of the Company’s accounts receivable, net balance at June 30, 2022 and December 31, 2021, respectively, was owed from related parties.

Prior to the completion of the Initial Mergers in 2019, BSR agreed to purchase a percentage of Mr. Yockey's ownership interest in BSR for total consideration of $1.5 million. Approximately $1.0 million of this consideration was paid to Mr. Yockey in the first quarter of 2020 and the remaining $0.5 million was paid to Mr. Yockey in the second quarter of 2021.

The Mergers

As consideration in the mergers with entities that have closed as of the date of these financial statements, as a result of their interests in the Broad Street entities party to such mergers, (i) Mr. Jacoby received 2,533,650 shares of the Company’s common stock and 856,805 OP units, (ii) Mr. Yockey received 2,533,650 shares of the Company’s common stock and 420,523 OP units, (iii) Alexander Topchy, the Company’s Chief Financial Officer, received an aggregate of 137,345 shares of the Company’s common stock and 48,320 OP units, (iv) Daniel J.W. Neal, a member of the Company’s board of directors, received, directly or indirectly, 878,170 shares of the Company’s common stock, and (v) Samuel M. Spiritos, a member of the Company's board of directors, indirectly received 13,827 shares of the Company’s common stock. As consideration in the remaining two mergers as a result of their interests in the remaining Broad Street entities, (i) Mr. Jacoby will receive an aggregate of approximately 17,985 shares of the Company’s common stock and 136,213 OP units, (ii) Mr. Yockey will receive an aggregate of approximately 17,985 shares of the Company’s common stock and 136,213 OP units, (iii) Mr. Topchy will receive 1,934 shares of the Company’s common stock and 14,338 OP units and (iv) Mr. Neal will receive, directly or indirectly, an aggregate of approximately 16,450 shares of the Company’s common stock.

Management Fees

As of June 30, 2022 and December 31, 2021, the Company provided management services for the two properties to be acquired in the remaining mergers with Broad Street entities. For each property, the Company receives a management fee ranging from 3.0% to 4.0% of such property’s gross income. As described above, Messrs. Jacoby, Yockey, Topchy and Neal have interests in some or all of the Broad Street entities that own those properties.

Messrs. Jacoby and Yockey, along with Mr. Topchy, Mr. Neal, Jeffrey H. Foster, a member of the Company’s board of directors, and Aras Holden, the Company’s Vice President of Asset Management and Acquisitions, have indirect ownership interests in BBL Current, which owns Midtown Row. Mr. Jacoby also serves as the chief executive officer and a director of BBL Current. On December 21, 2021, the Company entered into a purchase and sale agreement with BBL Current to acquire Midtown Row for a purchase price of $122.0 million in cash, as described above in Note 3 under the heading “—Midtown Row Acquisition.” On July 1, 2022, the MTR Agreement automatically terminated in accordance with its terms, and the Company forfeited its $0.2 million deposit under the MTR Agreement. The Company served as the development manager for Midtown Row and serves as the property manager and the leasing broker for the retail portion of Midtown Row and began receiving management fees from BBL Current in the first quarter of 2022.

Ground Lease

The Company acquired the fee-simple interest in the land that the Cromwell Field Shopping Center, a property managed by the Company, is located on under a leasehold interest. The Company leased the land to the owner of the Cromwell Field Shopping Center pursuant to a ground lease and recognized less than $0.1 million of revenue under the ground lease for each of the three months and six months ended June 30, 2021. On May 26, 2021, the ground lease was terminated upon the acquisition of Cromwell Field Shopping Center.

Tax Protection Agreements

On December 27, 2019, the Company and the Operating Partnership entered into tax protection agreements (the “Tax Protection Agreements”) with each of the prior investors in BSV Colonial Investor LLC, BSV Lamonticello Investors LLC and BSV Patrick Street Member LLC, including Messrs. Jacoby, Yockey and Topchy, in connection with their receipt of OP units in certain of the Initial Mergers. Pursuant to the Tax Protection Agreements, until the seventh anniversary of the completion of the Initial Mergers, the Company

and the Operating Partnership may be required to indemnify the other parties thereto for their tax liabilities related to built-in gain that exists with respect to the properties known as Midtown Colonial, Midtown Lamonticello and Vista Shops at Golden Mile (the “Protected Properties”). Furthermore, until the seventh anniversary of the completion of the Initial Mergers, the Company and the Operating Partnership will be required to use commercially reasonable efforts to avoid any event, including a sale of the Protected Properties, that triggers built-in gain to the other parties to the Tax Protection Agreements, subject to certain exceptions, including like-kind exchanges under Section 1031 of the Code.

Guarantees

The Company’s subsidiaries’ obligations under the Basis Loan Agreement, the Sub-OP Operating Agreement, the Brookhill mortgage loan, and the Lamar Station Plaza East mortgage loan are guaranteed by Messrs. Jacoby and Yockey. The Company has agreed to indemnify Mr. Yockey for any losses he incurs as a result of his guarantee of the Basis Term Loan, the Sub-OP Operating Agreement, the Brookhill mortgage loan and the Lamar Station Plaza East mortgage loan. Mr. Jacoby is also a guarantor under the MVB Loan Agreement.

Consulting Agreement

The Company had engaged Timbergate Ventures, LLC, an entity wholly owned by Mr. Yockey, as a consultant for a two-year term beginning December 27, 2019. Pursuant to this arrangement, the Company paid Timbergate Ventures, LLC a consulting fee of $0.2 million per year. During the three months and six months ended June 30, 2021, approximately $50,000 and $0.1 million, respectively, was recorded in general and administrative expenses related to this consulting agreement. This agreement expired on December 26, 2021.

Legal Fees

Mr. Spiritos is the managing partner of Shulman Rogers LLP, which represents the Company in certain real estate matters. During the three months ended June 30, 2022 and 2021, the Company paid approximately $0.1 million and $0.2 million, respectively, in legal fees to Shulman Rogers LLP and paid approximately $0.2 million during each of the six months ended June 30, 2022 and 2021.