BREIT 2017 Annual Report

F-21 The Company has engaged ShopCore Properties TRS Management LLC (“ShopCore”), a portfolio company owned by a Blackstone- advised fund, to provide property management, revenue management expense management, construction management, corporate support (including leasing, accounting, legal and tax), capital expenditure project and transaction support services for the Company’s retail properties. The Company currently estimates the cost of such services to be approximately 3% of gross revenue for property management services, 1% of gross rents from new and renewal leases for leasing services and 4% of total project costs for construction management services, plus a per square foot amount for corporate services and actual costs allocated for transaction support services. For the year ended December 31, 2017, the Company incurred $0.2 million of expenses due to ShopCore for services incurred in connection with its investments and such amount is included in Rental Property Operating expenses on the Company’s Consolidated Statements of Operations. The Company expects to set up a management incentive plan for each transaction for which the Company engages BRE, LivCor, EOM, or ShopCore for certain senior executives of the applicable portfolio company. Neither Blackstone nor the Adviser receives any fees or incentive payments from agreements between the Company and such portfolio companies or their management teams. During the year ended December 31, 2017, the Company has not paid or accrued any incentive fees to its affiliated service providers under such agreements. Advanced expenses As of December 31, 2017 and 2016, the Adviser had advanced $0.5 million and $0.1 million, respectively, of expenses on the Company’s behalf for general corporate expenses provided by unaffiliated third parties. Other Blackstone partnered with a leading national title agency to create Lexington National Land Services (“LNLS”), a title agent company. LNLS acts as an agent for one or more underwriters in issuing title policies and/or providing support services in connection with investments by the Company, Blackstone, and third parties. LNLS focuses on transactions in rate-regulated states where the cost of title insurance is non-negotiable. LNLS will not perform services in non-regulated states for the Company, unless (i) in the context of a portfolio transaction that includes properties in rate-regulated states, (ii) as part of a syndicate of title insurance companies where the rate is negotiated by other insurers or their agents, (iii) when a third party is paying all or a material portion of the premium or (iv) when providing only support services to the underwriter and not negotiating the title policy or issuing it to the insured. LNLS earns fees, which would have otherwise been paid to third parties, by providing title agency services and facilitating placement of title insurance with underwriters. Blackstone receives distributions from LNLS in connection with investments by the Company based on its equity interest in LNLS. In each case, there will be no related offset to the Company. During the year ended December 31, 2017, the Company paid LNLS $1.0 million for title services related to thirteen investments and such costs were capitalized to Investments in Real Estate on the Company’s Consolidated Balance Sheet. During the year ended December 31, 2017, the Company engaged an affiliate of our Adviser to perform certain internal audit and compliance functions. As of December 31, 2017, the Company had incurred $30,000 of fees for such services.