VP of Acquisitions Incentive Comp (CRE)
Hi all – I (JD/MBA with 7+ YOE ) recently received a verbal offer for a VP of Acquisitions role at a smaller CRE development firm in Orange County, CA. I should be getting the full comp package soon, which will include base (likely in the $175–$225K range), acquisition fees, and a share of the promote.
Assuming the base is in line with market, I’m trying to get a better sense of what’s typical or market for the incentive side…specifically:
What would be a "market" promote percentage and acquisition fee structure for a VP at a smaller firm, where the team is lean and I’d be heavily involved in sourcing, underwriting, and executing deals?
Would really appreciate any insight from others who’ve seen or been in similar scenarios.
Cheers.
You should probably be around $600k all-in when you add together salary + bonus + base case pay out of your promote annualized. That's just ballpark but should be higher if your pay out is riskier and less if your comped mostly in salary and bonus.
Agree with this, cash comp should +/-400 with the balance promote, so whatever percentages that gets you to those min thesholds is what I would fight for. % depends on size of fund, expected returns, deal volume etc, but for VPs you should be in the 2-3.5% range imo depending those variables
Sorry, just to confirm, Are you saying base should be ~$400k, with the rest from promote share and acq fees?
Agreed with this. I'm around $600-700K all-in depending on the year, but I am heavily heavily slanted towards bonus + promote.
Based on the most helpful WSO content, here’s what you need to know about incentive compensation for a VP of Acquisitions at a smaller CRE development firm:
Acquisition Fees:
Promote Percentage:
Additional Considerations:
If your base is in the $175–$225K range, aligning the incentive comp with these benchmarks would make for a competitive package. Don’t hesitate to negotiate, especially if you’re bringing significant value to the table!
Sources: Life in Acquisitions (Analyst/Associate), Life in Acquisitions (Analyst/Associate), Real Estate Profit Split - Friends and Family - LT Hold, What is a "realistic" expectation on carried interest as part of comp package?, What is your compensation in Real Estate Finance?
Thanks. What about acquisition fees? Assuming the firm charges 1-2% acquisition fee, what are you seeing the VP take from that?
Not to be the dunce in the room here but what firms are paying $400K cash comp to someone with 7 YOE? Small/midsize GP’s?
I’m a 5 YOE going through an EMBA right now and selfishly want to line myself up for this soon.
Going rate for VPs at institutions and developers doing institutional deals (in NY) is approx 400K cash.
I don't think many are paying a freshly minted VP with exactly 7 YOE $400k except for the super institutional shops (In HCOL markets with longer hours) or maybe for those that have 7 YOE of real direct experience (Ex: They're a VP of multifamily acquisitions and all they've done their whole career is multifamily acquisitions and they crush it and have a lot of deal flow under their belt for their age). The more run of the mill institutional are more likely paying $400k cash comp to those that are an established VP that have proven themselves sourcing and getting deals done for at least a year or two.
I’m negotiating comp for a VP of Acquisitions role at a boutique developer in SoCal, and am looking for advice on promote structure. This is deal-by-deal, not fund-based.
Offer: $200k base + 20% share of acq fees (1%) + 15% of GP promote.
Curious how this compares to others’ setups - is this “market?” How is your promote share structured?
That’s a great fair structure
I'm Director/VP with ~10 YOE at $200K + 10% of the acq fee and 5% promote. Remote. Newly hired to jump start an entire multifamily platform after my previous shop downsized and the acq team was either laid off or reallocated to asset management. My comp structure will move commensurate with my ability to build out a platform. Goal is 1,000 units in the next 12 months which would put cash comp just north of $400K. I do get a lot of freedom and autonomy which after interviewing at a couple bigger shops, I could tell I was going to be boxed in.
Is your share of promote 5% of GP promote or deal promote?
GP is the only one earning a promoted interest. LP pays it. Deal level return is somewhere in between.
Good for you. Is the acquisition fee on purchase price or equity check? How is it normally structured?
5% of GP promote. Wish it was the deal promote - will have to prove my worth first and then renegotiate down the line.
Thanks. I think you’ll be able to renegotiate. Curious what the GP equity % at your firm? We’re at 10% of total deal equity.
Not to be dense but what is the difference between GP promote and deal level promote / can you provide example?
Also curious about the distinction between those two promotes
Syndication of the GP position
There is no deal level promote unless this is some kind of funky capital stack with multiple waterfalls. Promote occurs when the profit split differs from the deal level return based on achievement of performance hurdles. The "Promote" is the portion paid to the GP that exceeds the deal level return.
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