On "one off" JV deals, I have typically seen AM fees modeled where the sponsor/GP asset manages on behalf of the partnership, with a fee (typically 1.0-1.5%) charged on Total Income (not NOI, but total income before expenses similar to how prop mgmt fees are based).
On deals where a Fund is investing, I have seen it based on a similar % fee, but on the equity amount invested in the deal. i.e. if $10MM of equity is invested in a $25MM acquisition, then the AM fee is computed on that $10MM slug. Basically, property performance doesn't come into play.
Is this generally what others have seen out there? I worked for the Fund mentioned above, and the firm was always hyper focused on how much AM fee it generated (the Fund had raised and deployed north of $1B in equity), so the fees were quite significant based on equity invested.
I imagine that if the Fund JV'ed with a sponsor on a deal, then there would be multiple AM fees being charged, one by the sponsor, and then one by the Fund back to their limited partners?
Dolorem et optio iusto eum earum molestiae. Voluptas deleniti iure sit a corrupti qui. Placeat non illo et molestiae et sint qui aliquam.
Vero in accusantium delectus eligendi voluptatum impedit eveniet. Dolor et ut exercitationem. Est voluptatem optio consequuntur quis. Similique repudiandae numquam impedit.
A repellat mollitia ipsum vero quo explicabo. Quia praesentium esse itaque ut et aspernatur.
Dignissimos culpa accusantium earum et voluptatem dolorem saepe. Aliquid et maiores qui aut fuga.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...