Typical Sponsor or GP Fee and example structures.

[Duke Giordano]

Hello All,

What are some typical Sponsor or GP Fee structure, how is it broken down, and what are some example structures?  Just trying to get an idea of what to look for and whats fair.  I realize they obviously bring a value and deserve a fee, just trying to wrap my head around what is the going rate?  Is it a flat $ amount fee or a percentage typically?  Also does this differ between MF syndication deals in the 50-200 unit range vs self storage vs Mobile home?  in addition, over what period of time should the sponsor fee be given out?  How do these fees effect the LP preferred return?

Thank as always, just trying to fill in knowledge gaps.

Duke

[Ronak Shah]

There is no typical split.  It depends on sponsor’s experience and risk profile of the project .  What I have seen: acquisition fee (0-2%), asset management fee (1-4%), pref to investor (0-10%), split from cash flow (50 to 20% for sponsor), split from sale (20-40% for sponsor).  

As you can see there is nothing typical except the names of different fees.

Sometimes last 2 fees are also based on hurdles where split % changes beyond certain results.