Largest Carry Check you Ever Recieved? RE
Curious to hear from developers biggest payout you ever got from a development you were a part of whether carry as part of a firm or just something you did on your own. Bored and daydreaming of the day this comes.
Bump
Just collected a 150k acquisition fee for a deal we closed. Not a huge amount of money for some but it is to me. Feels good that I did everything myself, wasn't tied to an employer. Expecting a much bigger check once we exit. I never want to go back to corporate.
Congratulations. If you don’t mind me asking, what type of deal is it?
value add industrial deal on West Coast
Once you taste a chunky payout it's hard to back the other way.
Congrats man.
Nicely done. Keeping hitting those singles and doubles and you’ll run up a serious bag.
Are you running your own firm? Or are you at a smaller non-corporate type shop and now participating in the economics at the deal level?
Right now I'm just a one man show running around chasing deals. Probably need to get my hands on another one within 6 mo or will have to consider getting back on the day job hamster wheel.
That's crazy. I'm assuming the Acq fee was ~1.50% and thus the total property value was $100mm? Not easy to find single industrial assets trading at $100mm that don't get eaten up by low cost of capital core+ institutional firms.
Prop value much lower. I have zero expectations of getting a fee like this again. Also, not getting dev fee, only v small monthly management fee. Either way, I was very lucky. It did help that our basis was low even after the fee.
If the acquisition fee was 1.5% that would equate to a deal size of $10m not $100m.
This is a great topic. Would be interested in hearing people’s experiences as well.
You’re forgetting the most important questions. Sure, you’ll salivate over any payment! But how long did the person need to sit at the firm to receive it! That’s the question!
Till death do us part
I got a co-invest distribution for $45 once that was dope.
Nice. I am an unpaid intern myself. Last week, my boss was in a good mood and threw a 15 dollar Amazon gift card my way, made my week.
Yeah, I mean it was a first quarter distribution on under a $5k investment (probs going to get 5% CoC in Yr1) looking forward to capital events and more distributions over the next 5 years. Will keep you guys updated as the big boy checks start coming in.
One time, when I was an intern. My Boss threw a $20 at me and said have fun.
good friend of mine recently mentioned he expects an 850k piece of the promote at sale (maybe a year out from today) of an apartment deal in TX. he's pretty young but practically everybody at his (small to mid-sized) firm gets a piece ... and obviously the older guys will get a much bigger check than that.
Any idea what his comp structure is like and how tenured he is at the firm?
i haven't picked his brain too much on specifics (but he'd probably tell me), but if i had to guess it's something like a 100k base (i could be way off). i think his share of the promote is around 10% but maybe it's gotten bigger over time. the firm is known, active, have done a ton of volume but they aren't big in the way that TCR is or whatever, so the actual deal team puts a ton of the work on HIS shoulders and when i talk to him i get the impression that he feels like he has to do everything/all the work. he has to find his sites which, by itself, is a huge job! that's a lot of responsibility for a young guy.
i also don't think this is the kind of job people waltz into. not only was he pretty closely connected with the most powerful person there, he is polished and had really helpful/relevant prior experience. when you meet him/talk to him he comes off like a coolheaded morgan stanley VP.
i'm not sure if he's expected to put some money in as part of that structure but it wouldn't surprise me
I've seen it.
Super rare, mind you, but I've seen it.
Heard a story of a guy at a very large and respected GP in HCOL city get something like a ~10MM promote for an office development. Obviously the JV terms were massively GP favorable but the deal was a grand slam once in a lifetime type outcome. He quasi-retired after that.
Can't say I blame him. Doubt I'd be in the office every day after getting a $10MM wire either.
That’s when you really step on it. If you’re young and full of energy you owe it to yourself to double down for a few more years.
niceeeee
I'm curious as to what other people have negotiated here in terms of i) promote distributions as a percentage of the total pie; and any participation in fees or other ancillary comp structures?
I get 0.5% of developer profit upon sale on company deals I am not directly involved in and 1.0% on deals that I am, on top of salary, smaller performance bonuses (Land closing, CO, etc.), and a discretionary annual bonus.
Higher ups here have the same deal just with numbers more akin to 3%-6%. There is one person here who may participate in deals on the GP side, but I'm not entirely sure how his comp is structured. No one participates in fees.
At the VP / Director level I'm seeing between 0.50% and 5.00% of promote... largely depends.
Fees participation is typically 2.00% - 5.00%.
I am somewhere in the middle.
Zero
I'm at base/bonus + 10% of developer promote proceeds + 10% of fees.
Anyone else have data point(s) on their above-salary comp structure at their shop?
You run your own shop dont you? I thought your share of the promote would be higher. Unless I'm missing something here.
I’ve been offered:
25% for sourcing acquisition 25% for signing guarantees 5-10% for sourcing equity + debt 5-10% for pursuit costs and deposits 5-10% for asset management + execution of business plan
Assumes your at the principal/partner level, putting in some decent co-invest and / or finding the deal.
My family office, give you a 1% fee for equity raises.
That’s pretty sexy
yep but at this stage we have to give up a sizable chunk to our LPs for guaranteeing our financing. Plus, I am not the founder who takes a bigger split for funding a higher percentage of our start-up costs and signs most environmental indemnities/bad boy carveouts/recourse obligations.
Earned £800’000 on a deal after some blackmailing of the MD. spent everything on omelette and french baguette, that was mad and I got fat, so sad, terrible deal
About $400k on a deal we sold earlier this year.
Would be interested to hear how many years experience/title you have
10 years in commercial real estate. Opened my shop just over 4 years ago.
Did you start out in real estate, or do something else? Also what type of deals do you do?
Started in real estate. Single-tenant retail.
Two million.
Haven't received it yet but on way to a 7 fig check on exit in 1-2 years. I've ran the numbers up and down and pretty pumped. Almost non existent financing/ leasing/ construction risk just need some time. The deal was a miracle from all angles. I got lucky.
I also feel pretty stupid for being so complacent for well over a decade when I should have been hunting for my own projects. Having an easy job that paid the bills was the biggest poison to my side hustle. Made me lazy and myopic. If you have the itch start early as possible.
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