| Related Party Transactions Vornado As of March 31, 2024, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our properties are leased and developed by, Vornado, pursuant to the agreements described below, which expire in March of each year and are automatically renewable. Management and Development Agreements We pay Vornado an annual management fee equal to the sum of (i) $2,800,000, (ii) 2% of gross revenue from the Rego Park II shopping center, (iii) $0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue, and (iv) $376,000, escalating at 3% per annum, for managing the common area of 731 Lexington Avenue. Vornado is also entitled to a development fee equal to 6% of development costs, as defined. Leasing and Other Agreements Vornado also provides us with leasing services for a fee of 3% of rent for the first ten years of a lease term, 2% of rent for the eleventh through the twentieth year of a lease term, and 1% of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by tenants. Under the agreements in effect prior to May 1, 2024, in the event third-party real estate brokers were used, the fees to Vornado increased by 1% and Vornado was responsible for the fees to the third-party real estate brokers (“Third-Party Lease Commissions”). On May 1, 2024, our Board of Directors approved amendments to the leasing agreements, subject to applicable lender consents, pursuant to which the Company is responsible for any Third-Party Lease Commissions and, in such circumstances, Vornado’s fee is 33% of the applicable Third-Party Lease Commission. Vornado is also entitled to a commission upon the sale of any of our assets equal to 3% of gross proceeds, as defined, for asset sales less than $50,000,000 and 1% of gross proceeds, as defined, for asset sales of $50,000,000 or more. We also have agreements with Building Maintenance Services LLC, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security services at our 731 Lexington Avenue property and (ii) security services at our Rego Park I and Rego Park II properties and The Alexander apartment tower. In addition, we have an agreement with a wholly owned subsidiary of Vornado to manage the parking garages at our Rego Park I and Rego Park II properties. The following is a summary of fees earned by Vornado under the various agreements discussed above. | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended March 31, | | | | (Amounts in thousands) | | 2024 | | 2023 | | | | | | Company management fees | | $ | 700 | | | $ | 700 | | | | | | | Development fees | | 15 | | | — | | | | | | | Leasing fees | | 38 | | | 41 | | | | | | | Property management, cleaning, engineering, parking and security fees | | 1,636 | | | 1,409 | | | | | | | | $ | 2,389 | | | $ | 2,150 | | | | | |
As of March 31, 2024, the amounts due to Vornado were $441,000 for management, property management, cleaning, engineering and security fees, $38,000 for leasing fees and $14,000 for development fees. As of December 31, 2023, the amounts due to Vornado were $646,000 for management, property management, cleaning, engineering and security fees and $69,000 for leasing fees.
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