RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES

NOTE 3. RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES

From time to time, IOR and its related parties have made unsecured advances to each other which include transactions involving the purchase, sale, and financing of property. In addition, we have a cash management agreement with our Advisor. The agreement provides for excess cash to be invested in and managed by our Advisor, Pillar, a related party.

The Advisory agreement provides for Pillar or a related party of Pillar to receive fees and cost reimbursements as defined in Part III, Item 10. Directors, Executive Officers and Corporate Governance – The Advisor. Cost reimbursements are allocated based on the relative market values of the Company’s assets. The Company and Pillar entered into an Advisory Agreement and Cash Management Agreement to further define the administration of the Company’s day-to-day investment operations, relationship contacts, flow of funds and deposit and borrowing of funds. The advisory fees and cost reimbursements paid to Pillar, TCI and related parties are detailed below (dollars in thousands):  

	Quarter Ended March 31,
	2021		2020
Fees:
Advisory	$	197	$	190
Net income		139		86
	$	336	$	275
Other Expense:
Cost reimbursements	$	107	$	72
Revenue:
Interest received	$	1,218	$	1,479

As of March 31, 2021, IOR has notes and interest receivable of $11.5 million due from Unified Housing Foundation, Inc. and recognized interest income of $360 thousand related to these notes receivable. (See details in Note 2. Notes and Interest Receivable from Related Parties.)

The table below reflects the various transactions between IOR, Pillar, and TCI (dollars in thousands):

	TCI
	2021			2020
Balance, December 31,	$	90,526		$	86,221
Cash transfers		3,725			815
Advisory fees		(197	)		(190	)
Net income fee		(139	)		(86	)
Cost reimbursements		(107	)		(72	)
Interest income		858			1,032
Income Tax		(359	)		(224	)
Balance, March 31,	$	94,307		$	87,496

We have historically engaged in and will continue to engage in certain business transactions with related parties, including but not limited to asset acquisitions and dispositions. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities. Related party transactions may not always be favorable to our business and may include terms, conditions and agreements that are not necessarily beneficial to or in the best interest of the Company.