Item 5 Fees and Compensation
Acquisition Fee
For each investment, CDK receives a fee based on a percentage of the equity contributed to a real estate
investment opportunity. This amount is negotiated with each client at the time the investment opportunity
is approved.
Asset Management Fee
CDK receives an annual asset management fee for investments managed by CDK. This fee generally
ranges from 40 basis points to 150 basis points applied to equity invested. This is negotiated with each
client at the time the investment opportunity is approved.
Incentive Fee
Upon disposition and after the investor recovers its initial capital investment including all fees, costs, and
expenses incurred and a negotiated Internal rate of Return, CDK is entitled to an Incentive Fee based on
the remaining funds. This percent is negotiated with each client at the time the investment opportunity is
approved.
CDK Multifamily I, LLC fee schedule:
CDK Realty Management, LLC receives the following fees for the services it provides:
Acquisition Fee – 1.5% of equity invested for each Project LLC
Management Fee – 1.5% of funded capital per annum payable quarterly in arrears
Incentive Fee – 20% of distributions from a Project LLC after investors have received a 12% IRR
on its capital invested including Acquisition and Management Fees
Harvest Interests Fund II fee schedule:
CDK Realty Management, LLC receives the following fees for the services it provides:
Acquisition Fee – 1.5% of equity invested for each Project LLC
Management Fee – 1.5% of funded capital per annum payable quarterly in arrears
CDK Realty Advisors, LLC will invest 1% of the amount raised by the fund and will receive a Carried
Interest equal to 20% of distributions from a Project LLC after investors have received a 12% IRR on its
capital invested including Acquisition and Management Fees.
Fee Schedule:
Fees are charged and developed on a case-by-case method for Separate Account Clients as outlined in a
separate Investment Management Agreement negotiated between the Client and CDK Realty Advisors,
LLC. Typically CDK Realty Advisors, LP or a subsidiary will receive an Acquisition Fee, Asset
Management Fee and Incentive Fee.
Fees for CDK Multifamily I, LLC and CDK Strategic Partners, LLC are outlined above.
Other Fees
All direct expenses incurred by CDK on behalf of our clients, including but not limited to costs and
expenses of investment management, portfolio management and property management as well as third-
party management fees will be reimbursed by the client. In the event that CDK provides property
management our fees shall not exceed those common in the marketplace for similar properties. Costs
necessary to operate the properties including, but not limited to, insurance, repairs, taxes, interest,
assessments, maintenance and leasing costs, out of pocket costs and expenses related to purchases
and sales of properties whether consummated or not, including costs associated with due diligence,
including out of town travel expenses on due diligence, fees and expenses paid to appraisers, attorneys,
real estate brokers, contractors, engineers and other consultants engaged by CDK on behalf of our clients
will be reimbursed by the clients. Costs and expenses related to establishing one or more legal entities to
hold title to individual properties and any other reasonable costs associated with the management of the
investment will be reimbursed by the client.
CDK will pay its own internal expenses including but not limited to travel expenses, rent, salaries and all
other office, overhead and administrative expenses.
Typically our Investment Management Agreements specify that fees are due and paid quarterly in arrears
and that either party can terminate the agreement upon thirty (30) days written notice to other party by
certified or registered mail. Upon termination, any prepaid, unearned fees will be promptly refunded and
any earned, unpaid fees will be due and payable.
ERISA Accounts,Profit Sharing 401(k), SEP’s:
We can also have other retirement accounts which are subject to ERISA rules and regulations. In all
cases an “eligible investment advice arrangement” or advisory agreement will be executed with the Client.
We will be considered a “fiduciary advisor” and will charge fees to the retirement account.