What are Asset Management Fees in Commercial Real Estate?
Learn more about the process of co-investing in commercial real estate.
Co-investing in real estate is one of the best ways to access the benefits of commercial real estate investing without needing to become the sole owner and operator of a large property.
And when you co-invest through a syndication led by an experienced sponsor, you can build wealth completely passively. At Excelsior Capital, for example, we do all the work of sourcing and vetting deals, managing the property, and coordinating with all the investors and partners.
The process couldn’t be easier for our investors: all they have to do is choose the deal(s) they want to invest in and then sit back and wait for the returns to start hitting their bank accounts.
In exchange for these services, most real estate sponsors will charge asset management fees.
What Do Asset Management Fees Pay For?
Asset management fees take up just a small percentage of the revenue generated by a real estate co-investment, and the benefits you receive in exchange are significant.
These fees cover the time and costs associated with deal sourcing, investor onboarding, and ongoing tasks like reporting, managing the asset and overseeing investor relations.
Keep in mind that this differs from property management fees, which cover the costs of operating and maintaining the property.
How are Asset Management Fees Determined?
Asset management fees are typically set up in one of two ways. In some cases, sponsors charge a flat rate to their investors.
More often, sponsors will take a fixed percentage of the revenue a property generates.
Choose the Right Sponsor for Your Next Real Estate Investment
At Excelsior Capital, we’re committed to making the co-investment process as easy as possible for our investors. We handle all the heavy lifting associated with sourcing, vetting, and managing our deals, and our extensive network allows us to find off-market deals that you’d likely be unable to access otherwise.
We’re also focused on finding the highest quality of commercial real estate deals, and our strategy has delivered consistently strong results for our investors.
In particular, we focus on commercial assets in healthy secondary markets, especially asset classes with low volatility, including medical office buildings and flex/light industrial properties.
To learn more about Excelsior Capital and our direct co-investment opportunities, please fill out this short form to get in touch with a member of our team.
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A real estate private equity firm that owns and operates high quality multi-tenant office assets in emerging secondary markets.
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