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Related Party Transactions (Notes)
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9 Months Ended |
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Sep. 30, 2012
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| Related Party Transactions [Abstract] | |
| Related Party Transactions |
Related Party Transactions
The following summary provides disclosure of the material transactions with affiliates of the Company.
In accordance with the Management Agreement with PRCM Advisers, the Company incurred $9.7 million and $24.1 million as a management fee to PRCM Advisers for the three and nine months ended September 30, 2012, respectively, which represents approximately 1.5% of stockholders' equity on an annualized basis as defined by the Management Agreement. In addition, the Company reimbursed PRCM Advisers for direct and allocated costs incurred by PRCM Advisers on behalf of the Company. These direct and allocated costs totaled approximately $1.8 million and $7.8 million for the three and nine months ended September 30, 2012, respectively.
During the nine months ended September 30, 2012, the Company established an accounts payable function and direct relationships with the majority of its third party vendors. The Company will continue to have certain costs allocated to it by PRCM Advisers for compensation, data services and proprietary technology, but most direct expenses with third party vendors will be paid directly by the Company.
The Company recognized $29,340 and $462,686 of compensation expense during the three and nine months ended September 30, 2012, respectively, associated with the amortization of shares of restricted stock issued to the Company's independent directors as part of their annual compensation.
As of September 30, 2012, there were 17,073,983 warrants to purchase up to 17,073,983 shares of common stock issued and outstanding. Of the 17,073,983 warrants, 3,900,000 were held in registered form by the founders of Capitol, and 2,906,918 were beneficially owned by Pine River Master Fund Ltd. and Nisswa Acquisition Master Fund Ltd., which are investment funds managed by Pine River. The Company is required to maintain a resale registration statement for the warrants and common stock issuable upon exercise thereof that are held by Pine River Master Fund Ltd., Nisswa Acquisition Master Fund Ltd., and the founders of Capitol.
On February 3, 2012, a subsidiary of the Company entered into an acquisition services agreement, a property management agreement and a side letter agreement regarding certain fees with Silver Bay Property Management LLC, or Silver Bay, which is a joint venture between Provident Real Estate Advisors LLC and an affiliate of PRCM Advisers and Pine River. Under the acquisition services agreement, Silver Bay assists the Company's subsidiaries in identifying and acquiring a portfolio of residential real properties in various geographic areas throughout the U.S. Under the property management agreement, Silver Bay operates, maintains, repairs, manages and leases the residential properties and collects rental income for the benefit of the Company and its subsidiaries. Pursuant to the side letter, the Company's subsidiary is obligated to pay Silver Bay for various services provided under the acquisition services and property management agreements. For the three and nine months ended September 30, 2012, the Company incurred $1.5 million and $2.6 million, respectively, in acquisition fees payable to Silver Bay, which were capitalized as part of the property acquisition cost. In addition, for the three and nine months ended September 30, 2012, the Company incurred $138,363 and $181,477 in property management fees payable to Silver Bay, of which $72,573 and $78,687, respectively, were expensed in the condensed consolidated statement of operations. The remaining $102,790 were deferred on the condensed consolidated balance sheet as of September 30, 2012 and will be amortized over the lease period.
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