Syndication
Syndication is the process of pooling capital from multiple investors to jointly acquire property, sharing investment, management responsibilities, and returns.
| Syndication Structure | Form |
| General partnership | All partners active, unlimited liability |
| Limited partnership | GP manages, LPs passive |
| LLC | Flexible management, limited liability |
| TIC (tenancy in common) | Direct fractional ownership |
| Delaware statutory trust | Passive ownership, 1031 exchange eligible (US) |
| Club deal | Small group of institutional co-investors |
| Sponsor Economics | Compensation |
| Acquisition fee | 1% to 3% of purchase price |
| Asset management fee | 1% to 2% of equity annually |
| Refinance fee | 0.5% to 1% of loan amount |
| Disposition fee | 1% to 2% of sale price |
| Promote / carry | 20% to 35% of profits above hurdle |
| GP equity | 5% to 10% of total equity contributed |
Related Terms
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