Quote from @Cody J Leivas:
I work on a team of about five, managing about 90 industrial buildings in the Midwest for our investors. We have been having trouble determining what pricing structure we should have for the following:
Property Management - We have different pricing for our clients but have charged 3-4% of gross rents. (Our multi-tenant buildings typically get reimbursed by tenants) The scope of the work includes invoicing, bookkeeping, paying bills, oversight on light repairs and maintenance, and communicating with tenant requests.
Asset Management - Banking/lending, entity creation/maintenance, accounting, taxes, and giving quarterly updates/distributions. We have not been charging for these items.
Construction Management - We have not charged extra for managing general contractors and subcontractors on larger projects. We will get many bids depending on the project and work with the GC or subs to complete the job. I would say that this falls outside of the scope of a property manager, but please let me know if you would disagree. I would say an 8-10% markup on cost is fair.
We have enough volume to raise our price but don't want to overcharge as we make the majority of our money acquiring industrial buildings for investors.
What are the typical fee structures for Property Management, Asset Management, and Construction Management? Our average building size is 50-100k SF.
I think your management fees are fair. We usually charge 3%-5% or collected income, not gross rent.
Asset Management is usually something that's reserved for someone that has actual interest in the ownership. The list of activities you listed exceeds what a 3rd party management team would do so there's room to charge there but you might want to consider what you want and don't want to do (if only for liability reasons). That said, asset management fees are usually 1%-2% of collected income.
Construction management - really depends on what you have to do. If the GC runs the show then 10% is too much to upcharge. I really don't like the whole "up charging" concept. I'd take it on a case by case with my clients and quote them per project letting them decide if they want us to run the show or if they want to interact directly with the GC.
