Compensation: Real Estate Development
Hello:
I am being recruited into a new firm to run the development and construction for new build multifamily deals. Typical deal size $50mm-$300mm.
we have a large gp fund raised and have a goal of raising a large open ended fund eventually.
I would be tasked with growing out the whole development and construction arm, including hiring and training as we grow.
my title is VP at the moment but no one would be above me besides the principals.
comp being offered: $220,000 base, 30% bonus, and 1% of carry on all deals.
i have not been given much feedback on how they structure the carry.
im curious about this type of comp as I would be doing everything for the firm after close of the deal (so entitlement, CM, lease up, etc).
thank you
Edit: I also would love to hear any creative comp structures I can try to negotiate to help align the firms success and my comp (with understanding I’m not taking monetary risk like the founders, but I am career wise as I can easily work for a large dev shop pulling same base and bonus that I know is stable enough)
What market?
East coast, sunbelt
Bump
Outside of my area, can't really help much here, but perhaps there's data here that can help? https://www.wallstreetoasis.com/forum/real-estate/new-comp-database-goo…
i mean, the comp seems market, especially for an unproven hire. Real key is how the carry would be structured.
Also, how many deals are expected per year? What is the involvement of the principals?
I don't agree, that comp is way low. A development team leader managing several projects that are $50-100M should be closer to $275K base + 50-100% bonus + 10% carry on the deals you are quarterbacking.
The only factors I can think of to justify a package this low is i) you have a ton of personnel you are managing who are supporting you, and/or ii) your comp is anticipated to ramp up as you add more deals, since paying full freight (a higher package) with no existing deal flow would be tough for the principals.
But there is no doubt you are getting shafted on the promote. Junior level development employees regularly get 1-2% of promote on deals they are workign on.
10% or 1% of $0 is still $0 ammaright?
VP level comp managing full cycle development should probably be closer to $400k + carry from my experience talking through a few opportunities similar to this. I think the 200-250k base is probably about market but the bonus would be closer to 75-100%. You can also look at adding a slice of developer fees to your comp structure.
Seems low to me. Both cash and carry.
Low base for the amount of responsibility and very low on the carry.
However, not the greatest job market to be able to negotiate with leverage.
If you are tasked with growing out this new arm, I am assuming 10+ years experience I would think, major sunbelt city I would say 250-300k at least, 50-100% bonus, and meaningful carry. Could structure in a % of acq fee's too.
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