Fees for Developers

[Laura Janosko]

Hi Everyone,

I currently work at Novogradac and Company, a valuation firm specializing in tax credits, and am blessed to have found a job that I truly enjoy. One of the reports my company writes for developers/investors is a reasonableness opinion for developer fees. The IRS requires that all new developments involving tax credits submit a reasonableness opinion upon closing. In the past, tax credit developers had been taking fees up to 20% of total project costs, which was well above what market rate developers typically charge . We write reports that determine whether the fees tax credit developers pay themselves is market oriented. In order to determine what developers are paying themselves in the market, we obtain interviews from developers about fees they typically charge.

The interviews are incorporated into our reports using the name, title and company of the person we spoke with. Our clients are typically national financial institutions, so the interviews should help you build your businesses as well. 

Any information regarding what developer fees are as a percentage of total costs would be greatly appreciated. In addition, we are trying to determine what premiums can be charged and what those would be as a percentage, for example, one percent for the developer being involved in acquisition. 

Further, any information regarding typical asset management fees, management fees, incentive management fees, construction management fees and asset management fees would also be helpful.

I am available by phone at 216-239-5546 or you can also email me at [email protected].