Under the Operating Model, net investment income is a measure of operating results. It is primarily intended to provide a measure of operating activity, exclusive of capitalized expenditures, such as leasing commissions, tenant improvement costs, tenant inducements and other replacement cost that can be capitalized if in accordance with GAAP. Rental income is recognized when it is contractually billable to tenants (i.e., straight-lining of rents is not applicable when real estate is reported at fair value). The recognition of rental income matches appraisal methodology which factors in the future rental income in the determination of property value. Accruing for free rent/stepped rent would in essence be accounting for the same item twice (i.e., once in the property's valuation and aging in an accounts receivable/other asset account outside the property base). Expenses are generally recognized when the obligation is incurred. Certain expenses may be based on the investment vehicle's unrealized change in net asset value, including, for example, incentive management fees, and are recognized as a component of the unrealized gain or loss.