3rd Party Asset Management Services
All- Wondering if anyone has experience working with 3rd party asset managers, specifically in Multifamily. It's a pretty niche offering as most operators with scale have in house AM, but I figure some family office / regional developers don't have time or capacity to hire AM in house.
If a standard AM fee for a GP might be 1.5% of equity invested, what fee would a standard 3rd party asset manager expect? Assuming these fees would scale based on success of operating, or at least there would be performance clauses baked into the asset management contracts.
Any and all anecdotes are much appreciated.
Cheers
I spent ~10 years in debt AM and not familiar with any groups doing 3rd party equity AM. I’m sure it’s out there somewhere but likely a very niche specialty since most sponsors and LPs want to keep those functions in-house. Curious what feedback you receive here.
You’d be surprised.
Following
Bumping- hoping someone has come across a shop offering 3rd party AM services. It seems like there is a small market to act as an owners rep/AM for UHNW families who own institutional RE.
Doesn’t Bellwether do this? Maybe some of those guys can chime in here
The Duke of Wall Street
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Yes, Bellwether does this. Their clients are large institutions with 10-and-11 figure AUMs. Not familiar with them having family offices as clients.
bumping this thread- Has anyone else seen smaller 3rd party asset managers?
As a lender, I've had to engage new operators in the past few years on a fee service engagement. While not all encompassing, I've generally seen 3% PM fee, a flat fee ($100k or so) to bill back direct employee cost, 3-5% CM fee on any capex/TI build outs, a leasing override, and a % of proceeds above our upb. Each deal is different but the above is used to help incentivize the operator and hopefully dangle a carrot in the next 2-3 years if the capital markets stabilize.
I work for one of these firms in a more niche asset class, we charge 5% of EGI
Very helpful- does your asset class require property managers? Are there bodies between you and the onsite work?
Yes, there are both property managers and regional managers that deal with property issues since they are all over the country. I very rarely go on site.
They are common in large full service hotels.
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