Sample Real Estate Investment Management Agreement (Page 7 of 7) in pdf

Sample Real Estate Investment Management Agreement Page 7

Exhibit C – Fee Schedule

Fees will include one or more of the following:

Commitment Fees

Paid during initial investment period, until majority of assets are deployed

Basis is usually committed but unfunded equity

Acquisition Fees

Generally paid at time of investment in individual assets

May be based on asset value/purchase price, cost basis, commitment amount (for loans,

development or other staged investments), investor’s share of invested assets (for JV’s), or

invested capital (i.e. net of leverage)

Asset Management Fees

Paid quarterly or monthly

May be based on cost basis, value, % of net operating income or % of cash flow; also can be

gross or net of leverage

Disposition Fees

Generally paid at time of sale

May be based on gross or net proceeds, or investor’s profit over cost

Incentive Fees

May be paid annually, at multi-year intervals or upon asset sales

May be aggregate for portfolio, calculated for individual assets or both

Benchmark may be an absolute hurdle rate (nominal or real, leveraged or unleveraged),

floating rate (spread over treasuries, CPI, etc), NCREIF Index (in whole or part), or

combination

Often includes holdback and/or clawback provisions to link measuring periods

Reimbursement Policy

Identify inclusions/exclusions such as consultant fees, brokerage commissions, investment

due diligence costs, travel expenses (acquisition, asset management, investor meetings), dead

deal costs, direct personnel costs, office expenses, outsourced activities etc.

Additional Services

Fee schedule may include provisions for the following:

Property Management

Leasing & Sales

Development

Financing

Construction Management

Fee schedule should establish which party calculates (Investment Manager or Investor) and whether

paid directly by Investor or drawn from account cash flow by Investment Manager.

Include examples for calculations.

NCREIF Portfolio Management Committee

Page 7

February 19,2004

Sample Real Estate Investment Management Agreement Page 7