AmTrust beyond the assets: how much economics stays at the company after the external-management and related-party layers
AmTrust's 2025 filings show that a meaningful slice of the economics does not stay at the company: $18.9 million of subsidiary-level payments went to the external manager and related entities, plus $751 thousand of HQ fees, alongside a new $2.5 million annual head-office agreement while the bonds remain outstanding. The issue here is not whether the platform adds value, but how much value is left at the company after the management, allocation, and transaction layers.
The main article focused on the assets, leverage, and the underwriting burden. This continuation moves one floor higher, to the mechanism through which the company is actually run. At AmTrust there is no independent layer sitting between the portfolio and the public securityholders. There are no employees, no separately disclosed operating headquarters for the company, and no independent property-management platform. The company buys all of that from a management company owned by the controlling shareholders.
That matters because in income-producing real estate it is not enough to ask how much NOI the assets can generate. You also have to ask how much of that NOI remains after property-management fees, cost allocations, renovation-management fees, brokerage fees, financing fees, and a new HQ layer added after the issuance. This is not a support layer. It is the economic layer sitting between the asset and the listed company.
The listed company does not operate the platform, it rents it
The company itself was formed in May 2025 in order to issue bonds in Israel, and it states explicitly that as of the report date it has no independent operating and management mechanism for its business. Instead, it operates as part of the AmTrust Realty group, through a management company that provides acquisitions, financing, renovation, design, marketing, accounting, finance, financial reporting, management, and leasing services.
The core executives are not employed by the company either. Jonathan Bennett, Stuart Axelrod, and Karen Katsoff provide services to it, but they are employed by the management company rather than by the company itself, and they also serve AmTrust Realty assets that were not transferred into the company. Above that sits a Manhattan headquarters with about 100 employees across strategy and acquisitions, finance and reporting, property management, risk management, human resources, IT, and engineering. In other words, the platform running AmTrust is real and experienced, but it sits outside the company.
This is not a temporary bridge structure. The head-office services agreement became effective upon the completion of Series A and remains in force as long as the company's bonds stay outstanding. The asset-management agreements themselves are also built to renew automatically year by year, and can mainly end upon serious breach or a sale of the relevant asset. So AmTrust did not outsource one function. It built a listed company whose operating engine is held by a related party.
| Layer | What the management company provides | Why it matters |
|---|---|---|
| Senior management and HQ | Senior management, accounting, finance, office support, communications, computing, and secretarial services | The company does not hold an independent mechanism that can replace the platform without depending on the related party |
| Property management | Day-to-day management, rent collection, maintenance, property-level staff, tax management, leasing, and renewals | The most critical operating layer sits outside the company and carries a standing fee right |
| Renovation, value-add, and financing | TI work management, tenant brokerage, sourcing financing, asset acquisition and sale, insurance brokerage | Almost every event that creates value in the portfolio also creates a payment right for the related platform |
The payment layer thickened after the IPO
The 2025 numbers make clear that this is not only operational dependence. It is also a real charging layer. At the subsidiary level, the company reports total payments of $18.9 million to the management company and related entities in 2025. That amount includes $3.703 million of property-management fees, $3.883 million of shared costs and other items, $7.198 million of management fees for tenant improvements, lease-up, and other initial contract costs that were capitalized into asset cost, $2.111 million of brokerage and acquisition services, and $2.005 million of financing services.
There is also a company-level layer on top of that. In 2025 the filings recorded $751 thousand of head-office management fees, but that is only a partial-year amount because the HQ agreement started in September. The agreement itself sets compensation at $2.5 million per year for as long as the bonds remain outstanding. So 2025 only shows the first edge of a new annual HQ charge.
| Economic layer | Charging mechanism | 2025 | Analytical implication |
|---|---|---|---|
| Property-management fees | 3% to 4% of gross monthly income, and after the agreement update 4% of gross monthly income | $3.703 million | The fee is taken from the top line of the asset, not from the NOI left to the owner |
| Shared costs and other | Cost allocation by service usage or by area, across assets inside and outside the company | $3.883 million | The charge depends on an internal allocation mechanism within AmTrust Realty |
| Renovation, leasing, and initial contract costs | 3% to 3.5% of renovation cost, alongside leasing-economics fees | $7.198 million | This layer inflates the cost of value-add and leasing even when it is capitalized rather than expensed immediately |
| Acquisition and financing fees | 1% of purchase or sale price, and 1% of the relevant financing amount | $4.116 million | 260 Madison created a meaningful transaction-fee layer in year one |
| Head-office management fee | Annual agreement set at $2.5 million | $751 thousand recognized in 2025 | This is a new company-level charge with a higher full-year run rate ahead |
The non-obvious point is not only the size of the number, but its composition. Property-management fees and shared costs are a recurring base layer. Renovation fees, leasing fees, acquisition fees, and financing fees are an additional layer that turns on precisely when the company is presenting value-add, leasing progress, or expansion. In other words, when the portfolio creates value, the management company participates not only in operating the assets but also in the economics of the event itself.
That also shows up in G&A. The line jumped to $9.663 million in 2025 from $3.935 million in 2024. Out of the $5.728 million increase, $4.867 million is explained directly by asset-acquisition and financing fees together with the new HQ fee. So most of the jump in 2025 G&A came from a related-party charge layer added around the issuance and the 260 Madison acquisition.
The real issue is the charging base, not only the fee size
It would be easy to look at $18.9 million and call it simply the cost of a platform. What matters more is how that price is set. Property-management fees are paid as a percentage of the asset's gross monthly income, including expense reimbursements paid by tenants for common areas and utilities. This is the core point. The management company takes its share from the top line, before the bondholders or the company layer see what remains after property taxes, maintenance, insurance, cleaning, and the rest of the operating cost stack.
The renovation and leasing layer is built the same way. TI work and tenant-improvement projects entitle the management company to a 3% to 3.5% fee on renovation cost. In leasing transactions, if an outside broker represents the asset the management company gets 25% of that broker's commission. If there is no third-party broker for the asset, the management company can receive the full brokerage amount that would otherwise have been paid to the landlord-side broker, or 50% of the commission paid to the tenant's broker, subject to market terms, up to a $2 million cap per lease. This is not just a management fee. It is participation in the economics of the lease itself.
That leads to the more important governance question. Shared costs across AmTrust Realty assets are allocated by use or by area, and the group itself performs the allocation between assets transferred into the company and assets that remained outside it. At the same time, the senior executives work across assets outside the company as well, while the company itself has no independent employees. So the question is not only whether $3.703 million of property-management fees is a reasonable price. The question is who holds the right to set the cost base, the timing of the charge, and the division of resources between the assets inside the public wrapper and the assets left outside it.
This chart is not claiming that every dollar here is recurring, or that every dollar hits the P&L in the same way. It is showing the thickness of the layer. Even without 260 Madison, even without the acquisition and financing fees, and even before a full-year HQ run rate, the recognized recurring related-party base in 2025 already stood at $8.337 million. If the partial-year $751 thousand HQ charge is replaced with the full $2.5 million annual run rate stated in the HQ agreement, that base already looks closer to $10.1 million.
The balance sheet shows that this layer is not theoretical. Amounts payable to related parties rose to $5.332 million at the end of 2025 from $1.959 million at the end of 2024, an increase of $3.373 million in a single year. So even if not every charge is settled immediately in cash, the economics are already sitting on the table.
The platform does create real value, but that does not solve the question
The strongest counter-thesis here is a serious one. A related-party management company is not only a fee layer. It is also an infrastructure layer that lets AmTrust operate at this scale without building internal SG&A from scratch. That roughly 100-person headquarters provides acquisition, leasing, financing, and value-add capability. In addition, the audit committee approved a framework-transactions procedure that is revisited annually, and the 260 Madison-related services with the management company were approved as non-extraordinary transactions in which the controlling shareholders had a personal interest.
The economics are also not purely one-way. In 2025 the company recognized $3.861 million of rental and other income from related parties, and Part D also lays out leases with related entities at assets such as 250 Broadway, 59 Maiden Lane, and One East Wacker. In other words, the same related ecosystem that can charge fees can also bring a tenant, sign a lease, and support occupancy.
But even here the filing draws a boundary. Until August 2025, related entities did not pay rent for part of the space they occupied, and the company recognized 2025 rental income for those spaces at market rent against capital reserve from related-party transactions, in an amount of $222 thousand. So even when the economics come back from the related side into the company, they do not always come back as ordinary cash rent. That is exactly the difference between a related platform that creates value and a related platform that leaves all of the value inside the company.
What remains at the company after the management layer
The 2025 answer is not "too little" and it is not "no problem." AmTrust does have a real platform, and the filing shows that this platform carried the 260 Madison acquisition, the financing package, the value-add work, and the leasing flow in practice. On the other hand, 2025 shows clearly that the listed company is not a clean pass-through of asset NOI. Between gross-income-based management fees, cost allocations, leasing commissions, acquisition fees, financing fees, and the new HQ fee, the share of economics that remains outside the company is thicker than a first read of the assets would imply.
In numbers, the visible related-party charge and payment layer reached $19.651 million in 2025 if you combine the $18.9 million at the subsidiary level with the $751 thousand of HQ fees recognized at the company level. That is equivalent to about 14.7% of revenue and about 34.4% of NOI calculated from the filing. Not all of that amount is recurring, not all of it is expensed in the same year, and not all of it is problematic. But it is no longer a footnote.
The checkpoint from here is straightforward. 2026 will be the first year in which the $2.5 million annual HQ agreement can show up across a full year, assuming the bonds remain outstanding. If NOI and leasing grow faster than the fee layer, the model will look like efficient use of an external platform. If not, AmTrust will continue to look stronger at the asset level than at the company level.
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