RELATED-PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2014

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

12. RELATED-PARTY TRANSACTIONS

        CIM Urban REIT Management, LP (the "Management Company"), an affiliate of CIM Urban REIT, provides asset management services to CIM Urban. For these services, CIM Urban pays asset management fees to the Management Company, on a quarterly basis, in arrears. The fee is calculated as a percentage of the daily average gross fair value of our investments, as defined, as follows:

Daily Average Gross Fair Value of Investments				Quarterly
From Greater of		To and Including		Fee Percentage
(in thousands)
$	—	$	500,000		0.2500	%
	500,000		1,000,000		0.2375
	1,000,000		1,500,000		0.2250
	1,500,000		4,000,000		0.2125
	4,000,000		20,000,000		0.1000

        For the three months ended March 31, 2014 and 2013, the Management Company earned asset management fees of $5,681,000 and $5,409,000, respectively. At March 31, 2014, and December 31, 2013, asset management fees of $5,751,000 and $5,426,000, respectively, were due to the Management Company.

        CIM Management, Inc. and certain of its affiliates (collectively, the "CIM Management Entities"), all affiliates of CIM Urban REIT, provide property management, leasing, and development services to CIM Urban. For the three months ended March 31, 2014 and 2013, the CIM Management Entities earned property management fees, which are included in rental and other property operating expenses, totaling $1,259,000 and $1,147,000, respectively. CIM Urban also reimbursed the CIM Management Entities $2,044,000 and $1,388,000 during the three months ended March 31, 2014 and 2013, respectively, for the cost of on-site personnel incurred on behalf of CIM Urban, which is included in rental and other property operating expenses. In addition, for the three months ended March 31, 2014 and 2013, the CIM Management Entities earned leasing commissions of $512,000 and $286,000, respectively, and development management fees of $87,000 and $136,000, respectively, which were capitalized to deferred charges and investments in real estate. At March 31, 2014 and December 31, 2013, fees payable and expense reimbursements due to the CIM Management Entities of $1,895,000 and $1,445,000, respectively, are included in due to related parties. Also included in due to related parties as of March 31, 2014, and December 31, 2013, is $79,000 and $(64,000), respectively, due to (from) the CIM Management Entities and related parties. We have also entered into contracts with third-party property management companies.

        Certain of these management companies also provide leasing and development management services, for which they are compensated in accordance with the agreements. Management fees incurred to third-party management companies related to the rental properties totaled $87,000 and $85,000 for the three months ended March 31, 2014 and 2013, respectively, which were included in rental and other property operating expenses.

        On the Acquisition Date, pursuant to the terms of the Merger Agreement, CIM Commercial and its lending subsidiaries entered into the Master Services Agreement (the "Master Services Agreement") with CIM Service Provider, LLC (the "Manager") pursuant to which the Manager agrees to provide or arrange for other service providers to provide management and administration services to CIM Commercial and its subsidiaries following the Merger. Pursuant to the Master Services Agreement, CIM Commercial pays a base service fee (the "Base Service Fee") to the Manager equal to $1,000,000 per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears. The Base Service Fee began to accrue on the Acquisition Date and was pro-rated based on the number of days during the first quarter in which the Master Services Agreement was in effect. For the three months ended March 31, 2014, the Manager earned a Base Service Fee of $56,000, which is due to the Manager at March 31, 2014.