Item 5: Fees and Compensation
DESCRIPTION OF FEES AND COMPENSATION
We and/or certain of our affiliates generally receive management fees, carried interest distributions or incentive
distributions and other fees and compensation in connection with the management of each Fund, its investments and
real estate acquisitions. The fees paid may differ based on investment size, strategy, and complexity of the client. The
fees may be negotiable depending on product types and account. While the fees and compensation payable to us and
our affiliates with respect to each Fund and its investments are described in detail in the applicable offering and
governing documents, a general overview of such fees and compensation is set forth below:
Fund Management Fees. With respect to most of the Funds, we or an affiliate generally are entitled to receive, on a
quarterly basis in arrears, a management fee in respect of each unaffiliated investor equal to: (i) during the proceeds
reinvestment period or investment period, a percentage (typically from 1.25% to 2% per annum) of such investor’s
capital commitment, and (ii) after the expiration of the proceeds reinvestment period or investment period, a
percentage (typically from 1.25% to 2% per annum) of such investor’s unreturned capital contributions to such Fund.
With respect to certain offshore Funds, we receive or may receive an additional fund management fee in respect of
such offshore Fund equal to a percentage of the capital commitments from investors in such offshore Fund.
Asset Management Fees. With respect to certain Funds, we or an affiliate generally are entitled to receive, in lieu of
the fund management fee described above, a monthly asset management fee in an amount equal to 2.5% to 3% of the
gross operating income of each property and real estate-related assets owned by such Funds. Such asset management
fee is intended to compensate CONTI Capital for the oversight of each such property, including executing on legal,
accounting, property tax management, insurance review, filing and data processing fees, advertising, information
technology costs, reimbursements for operating expenses and providing administrative services in connection with
properties.
Carried Interest Distributions. Subject to the terms and conditions set forth in the applicable governing documents,
an affiliate generally is entitled to receive a carried interest distribution in respect of each unaffiliated investor in a
Fund equal to 20% of net profits derived from the disposition of each investment (on an investment-by-investment
basis), subject to (i) the satisfaction of cumulative, but not compounding, annual rate of return on unreturned capital
contributions attributable to such investment, and (ii) the repayment of all unreturned capital contributions made by
such investor in respect of such investment (but not in respect of any other investments).
Acquisition Fees. We and our affiliates generally are entitled to receive an acquisition fee equal to the greater of
$300,000 or 1.0% (or such other applicable percentage) of the purchase price to fund sourcing, due diligence,
contracting and acquiring any investment made by a Fund. Acquisition fees are borne by the applicable Funds.
Disposition Fees. We and our affiliates generally are entitled to receive a disposition fee for services in connection
with the sale of any investment in a Fund equal to a percentage (typically from 1.0% to 1.5%) of the sales price of
such investment. Disposition fees are borne by the applicable Funds.
Capital Improvement Oversight Fees. We and our affiliates generally are entitled to receive a capital improvement
oversight fee in connection with capital improvements and renovation or value-enhancement projects for any
investment made by a Fund. Such capital improvement oversight fee typically is equal to 10.0% (or such other
applicable percentage) of the costs of any capital improvement or other material alterations made to any investment,
and is borne by the applicable Fund.
Financing Fees. With respect to certain of the Funds, we and our affiliates charge or may charge a financing fee for
services in connection with the origination, assumption or refinancing of any debt financing obtained that is used to
finance properties or other permitted investments or fees in connection with the financing of a property. Any such
financing fee is equal to a percentage of the loan amount available under such financing. Any such financing fees are
indirectly borne by the applicable Funds.
We have entered into, and may from time to time in the future enter into, arrangements with certain third parties
pursuant to which we or our affiliates have agreed, or may agree, to share with such third parties a portion of the
management fees payable to us by investors in a Fund that were referred to us or such Fund by such third parties. For
more information, see Item 14.
In addition to management fees, carried interest distributions, acquisition fees, disposition fees and capital improvement
oversight fees, we and/or our affiliates and other third-party service providers receive or may receive various other
types and forms of fees, payments and/or compensation in connection with our duties and services in respect of each
Fund and its investments (as described in the applicable governing and/or offering documents), and such fees
generally do not result in any reduction of or offset to the management fees payable by the applicable Fund.
Detailed information regarding the fees and compensation and expenses applicable to each Fund is set forth in its
applicable offering and governing documents (and related operating agreements) and the summary set forth above is
qualified in its entirety by such offering and governing documents. The applicable fees and compensation in respect
of a Fund may vary from Fund to Fund based upon the terms and conditions set forth in the applicable governing and
operating agreements thereof.
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