Taking a dive back into fee-only compensation. I need a general framework to work off of when it comes time to negotiating my piece of the pie so I am hoping to get a feel for how you guys are divvying up the pie on deals you originate and deals you execute. I think it would serve everyone here well if you're working in an advisory capacity or planning to at some point. Think of it as a compensation survey.
I'm thinking of proposing:
- 1-2% of the gross fee on deals I am brought in on for execution support.
- 50/50 on a graduated split as followed (50/50 from $0-400k, 55/45 $401k-$750, 65/35
on anything above that - I'll worry about when I get there)
What do you guys think?
Let's follow the template below.
Specialty: Investment Sales, Debt/Equity, Leasing (Agency/Tenant)
Involvement: Origination, Execution, etc.
Split: Salary, Bonuses/Points, % split with team, % split with house, etc.
1-2% seems low for execution support unless the deal is already in contract. I would ask for a higher fee or a flat amount on a deal by deal basis.
The fees are typically mid 6 low 7 figures. I thought that seemed about right. Forgot to clarify. Thanks for the input!!
I agree that 1-2% is a little low. I think 5-10% is more reasonable, depending on your level of support. If the others are bringing in the deal and you are doing some of/splitting the work, shoot for the lower end. If you are running everything from an execution standpoint, I lean on the higher side.
Remember, time you are spending working on other people's deals and only making 1-2% is time you arent out finding your own deals where you will be making 50%. You dont want to rub people the wrong way by asking too much, but you also have to do the math on how valuable your time is. It will also keep people from inundating you with BS on their deals because they dont have to pay you anything.
Maybe you work something out where the lead broker pays you half and the house pays you the other half. You are technically assisting both in getting the deal closed.
Got it. All good things to consider. I think you're right though about 1 to 2% of the gross fee being too low. I heard HFF analyst get 3% of the gross on deals that they are staffed on.
Thanks for your guidance though. If anyone else has any thoughts please feel free to chime in. Thank you.
Hey Merchant,
Wondering how this shaked out. I am currently going through the same thing, but strictly for support.
-XSX
Haven't squared anything away yet. Will know more in the coming weeks. I will keep you posted.
I Tenant Rep Industrial Leasing, start to finish.
4% of total Lease Value is paid to my brokerage
From there, I get a 60/40 in my favor with a few hundred per transaction for E&O Insurance
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