I am negotiating my contract now. I wanted to see if those who are working on the acquisition and development of projects are getting a piece of the deals they work on.
If so, what title do you have, what level of experience, whats the deal size, how much are you getting, and how is it structured?
It depends on the size of your firm. Usually the smaller firms give our a piece of the deals at a lower level than mega funds. I think a true senior associate could expect a small piece of deals at small shops. By the time you are a VP it should be pretty common practice at all small firms and most if not all larger firms.
How it's structured will also vary greatly. Maybe you will be allowed to co-invest or maybe you will be given carried interest. Like other compensation points in RE it varies wildly.
When you say 'contract' do you mean just negotiating overall comp as an employee or are you actually a contracted developer operating under the shops flag with an agreement in place on comp/deals? Just wondering.. Being on the development side, are you running the models/cash flow/IRR & equity multiple returns or are you sourcing deals and acting more on 'development' front. Are you involved in leasing?
I have an entity that I own and that works under the flag ship of the development company. My entity bills out to the development company who in turns bills the development ownership in general conditions. With the principals, I handle all due diligence, underwriting, design and CA. So, I handle everything - start to finish. I handle brokerage duties during the acquisition phase as well.
In a similar situation - curious as well.
Aren't you too busy having dinner with your lawyer in London?
I'm an Associate level and do not. I don't even think our VP's do. We are a medium size regional developer.
I did at my previous job it was for the total fund not deal by deal though and didn't vest for 5 years. We invested in stabilized properties there. One of the firms I interviewed with did, middle market REPE firm. It was deal by deal, but I'm not sure what the specifics were.
Can I ask how is your comp is and is structured? Is comp based on how your development project did, etc? Are you in a major or secondary market?
Sure PM me
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Interesting. Thanks. How is the VP and your equity share structured - are you guys your own entity with voting rights based on your percentage of ownership. For example, Entity A owns real estate development, Entity B is GP and Entity C is LP. Promote is split between Entity B and C. Are you investing your equity into Entity B or C with no voting rights, decision rights, Class B, etc. or are you under your own Entity?
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Just curious.. when you say small shop..approx what size fund? $25-50m or like $150 - $200m? And how many VP's are there? Thnks
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