| Summary of Management Fees, Incentive Fees and Associated Credits and Administration Fees |
The following table summarizes related-party fees paid or accrued for and reflected in our accompanying consolidated financial statements (dollars in thousands):
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For the Years Ended December 31, |
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2018 |
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2017 |
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Base management fee(1)(2)
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$ |
2,837 |
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(3) |
$ |
2,041 |
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(4) |
Incentive fee(1)(2)
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— |
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688 |
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Capital gains fee(1)(2)
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628 |
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— |
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Credits from non-contractual, unconditional, and irrevocable waiver granted by Adviser’s board of directors(2)
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(1,014 |
) |
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(54 |
) |
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Total fees to our Adviser, net |
$ |
2,451 |
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$ |
2,675 |
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Administration fee(1)(2)(5)
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$ |
1,275 |
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$ |
914 |
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Selling Commissions and Dealer-Manager Fees(1)(6)
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$ |
2,324 |
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$ |
— |
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Financing fees(1)(7)
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83 |
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36 |
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Total fees to Gladstone Securities |
$ |
2,407 |
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$ |
36 |
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(1) |
Pursuant to the agreements with the respective related-party entities, as discussed above. |
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(2) |
Reflected as a line item on our accompanying Consolidated Statements of Operations. |
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(3) |
Includes the allocation of approximately $176,000 of the total accumulated costs incurred by our Adviser as a result of the crops harvested and sold on the farm operated by Land Advisers during the year ended December 31, 2018, as further described above under “TRS Expense Sharing Agreement.” Excludes an additional $31,000 of accumulated costs incurred by our Adviser during the year ended December 31, 2018, pursuant to the TRS Expense Sharing Agreement. Such costs were allocated to crop inventory that was written down to zero during the year ended December 31, 2018, and are included within Loss on write-down of inventory on the accompanying Consolidated Statements of Operations (as discussed in more detail under “TRS Fee Arrangements—TRS Expense Sharing Agreement” above).
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(4) |
Excludes the allocation of approximately $71,000 of the total accumulated costs incurred by our Adviser pursuant to the TRS Expense Sharing Agreement as a result of the crops harvested and sold on the farm operated by Land Advisers during the year ended December 31, 2017. Such amount was deferred and included within Crop inventory on the accompanying Consolidated Balance Sheet as of December 31, 2017.
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(5) |
Includes the portion of administration fee that was allocated to Land Advisers (approximately $57,000 and $22,000 for each of the years ended December 31, 2018 and 2017, respectively), as further described above under “TRS Administration Fee Allocation.”
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(6) |
Included within Additional paid-in capital on the accompanying Consolidated Balance Sheet. Gladstone Securities remitted approximately $2.2 million of these fees to unrelated third-parties involved in the offering (including participating broker-dealers and wholesalers) during the year ended December 31, 2018.
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(7) |
Included within Notes and bonds payable, net on the Consolidated Balance Sheets and amortized into Interest expense on the Consolidated Statements of Operations. Financing fees paid to Gladstone Securities represented approximately 0.11% and 0.13% of the total financings secured during the years ended December 31, 2018 and 2017, respectively.
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| Details of Amounts Due to Related Parties on Our Accompanying Condensed Consolidated Balance Sheets |
Amounts due to related parties on our accompanying Consolidated Balance Sheets as of December 31, 2018 and 2017 were as follows (dollars in thousands):
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December 31, 2018 |
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December 31, 2017 |
Due from Gladstone Securities(1)
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$ |
20 |
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$ |
— |
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Base management fee |
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$ |
736 |
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$ |
666 |
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Capital gains fee(2)
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(150 |
) |
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— |
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Credits to fees(3)
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(44 |
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— |
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Other(4)
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63 |
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16 |
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Total due to Adviser |
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605 |
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682 |
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Administration fee(5)
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340 |
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258 |
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Total due to Administrator |
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340 |
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258 |
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Total due to related parties(6)
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$ |
945 |
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$ |
940 |
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(1) |
Amounts due from Gladstone Securities represent costs for certain sales, promotional, or marketing services related to the offering of the Series B Preferred Stock paid for by us on behalf of Gladstone Securities. Such amounts are included within Other assets, net on our accompanying Consolidated Balance Sheet. |
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(2) |
The credit to the capital gains fee during the three months ended December 31, 2018, was a result of capital losses recorded in connection with dispositions of certain real estate assets during the three months ended December 31, 2018, which resulted in a reduction of the capital gains fee accrued for as of September 30, 2018.
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(3) |
The credit received from our Adviser during the three months ended December 31, 2018, was granted as a non-contractual, unconditional, and irrevocable waiver to be applied as a credit against the portion of the base management fee attributable to our Series B Preferred Stock, which is included within Total Adjusted Equity (each as defined in Note 7, “Equity”).
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(4) |
Other fees due to or from related parties primarily relate to miscellaneous general and administrative expenses either paid by our Adviser or Administrator on our behalf or by us on our Adviser’s or Administrator’s behalf. The balance owed to our Adviser as of December 31, 2018, includes premium payments for certain insurance policies made by our Adviser on our behalf.
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(5) |
Includes approximately $9,000 and $22,000 owed by Land Advisers to our Administrator as of each of December 31, 2018 and 2017, respectively, in accordance with the TRS Administration Fee Allocation, as discussed above.
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(6) |
Reflected as a line item on our accompanying Consolidated Balance Sheets. |
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