MSREF Real Estate Advisor Inc

Item 5 – Fees and Compensation
Certain fees described herein are subject to negotiation with investors. The Adviser is not required
to inform, or offer any similar arrangements to, any other client or investor, except as agreed with
each such person or as required by applicable law.
With respect to PPFA, all fees and expenses are calculated and payable in United States Dollars,
and with respect to PPFE, all fees and expenses are calculated and payable in Euros.
Management Fees
Under the current investment management fee arrangement with respect to each of the Funds as
set forth in each such Fund’s Amended and Restated Limited Partnership Agreement, as amended
(each, a “Partnership Agreement,” and collectively, the “Partnership Agreements”) and without
prejudice to the ability of the Adviser to enter into letter agreements or other similar arrangements
with one or more Limited Partners that may confer additional benefits on individual Limited
Partners that other Limited Partners will not receive (to the fullest extent permitted by applicable
law), each Fund pays a management fee to the Adviser (or an affiliate thereof) comprised of two
separate components: (i) the Base Fee and (ii) the Incentive Fee. The Base Fee in relation to each
investor ranges from 25 basis points per annum to 90 basis points per annum of a Limited Partner’s
share of the relevant Fund’s net asset value (“NAV”) (established on a quarterly basis (or at such
other times as determined by the Adviser in its sole discretion), payable quarterly in arrears on the
last business day of each calendar quarter.
Incentive Fees
The Incentive Fee is earned on the basis of the NAV and growth of the net operating income of
the investments held by the relevant Fund and ranges between 0 and 25 basis points of such Fund’s
average quarterly NAV over a calendar year. The Incentive Fee is payable at or promptly after the
end of each calendar year and is equal to the aggregate amount of the Incentive Fee (including
offsets for any negative amounts) accrued for each quarter of the calendar year. No Incentive Fee
will be payable by the Limited Partners during each Fund’s lock-up period. With respect to PPFA,
the lock-up period expired on September 30, 2019 and with respect to PPFE, the lock-up period
expired on November 1, 2022. See also “Co-Investments” below for additional information on the
fees and expenses relating to co-investments.
Expenses
The Funds may also bear certain out-of-pocket expenses incurred the Adviser and/or its affiliates
in connection with the services provided to each of the Funds. The payment of such expenses by
the Funds does not represent a source of profit for the Adviser, but rather is a reimbursement of
actual costs initially paid by the Adviser (or its affiliates) and subsequently passed through to each
Fund.

The most common expenses with respect to each Fund include (i) fees, costs and expenses
(including travel, meals and accommodations) incurred in purchasing, acquiring, developing,
negotiating, structuring, monitoring, custody, hedging, financing, insuring and disposing of actual
or potential Fund investments, including due diligence expenses relating to the foregoing, costs of
external financial, legal, accounting, consulting or other advisors, or any lenders and other
financing sources; third party out-of-pocket expenses incurred by the Adviser in connection with
Fund investments or proposed Fund investments and other costs and expenses in connection with
the acquisition, underwriting, market research, financing, operation, ownership, management,
development, redevelopment, refinancing, sale, leasing or other disposition of Fund investments;
costs and fees in connection with transactions which are not consummated, including reverse
break-up fees and lost deposits; (ii) costs and expenses related to the engagement of third-party
consultants, advisors and service providers, including costs and expenses incurred in connection
with obtaining legal, tax, appraisal or accounting, property management, fund administration,
custody or depositary advice or services; (iii) expenses incurred in connection with any litigation,
indemnification or extraordinary expense or liability relating to the affairs of the Fund; (iv)
expenses related to legal and regulatory compliance for the Fund; (v) expenses incurred in
connection with and any principal, interest or other amounts owing in respect of any indebtedness
or guarantees of the Fund or any proposed or definitive credit facility or other credit arrangement,
including the repayment of amounts under such indebtedness, guarantees, credit facilities or other
credit arrangements; (vi) expenses associated with portfolio and risk management including
currency hedging and interest rate hedging; (vii) expenses associated with the Fund’s advisory
committee meetings and Fund general partner board meetings and any fees or compensation
payable to the independent directors of such Fund’s general partner and expenses payable to all
directors; and (viii) all other costs and expenses relating to the business of the Fund.
In addition, with respect to PPFE, the Fund has appointed an affiliate of the Adviser as its European
Economic Area (“EEA”) domiciled authorized alternative investment fund manager (“AIFM”) for
purposes of the European Union Alternative Investment Fund Managers Directive (“AIFMD”) (an
“Affiliated EEA AIFM”). Such authorization enables the Fund to be marketed within the EEA
pursuant to a pan-European marketing “passport,” subject to compliance with the ongoing
compliance requirements of AIFMD. In connection with such engagement, the Fund is responsible
for all fees, costs and expenses associated with the engagement of and the ongoing fees associated
with the services provided by such AIFM. Such costs include the cost of the services provided by
the Affiliated EEA AIFM’s personnel and related parties to the Fund, including allocable
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Item 7 – Types of Clients
The Adviser provides portfolio management services to pooled investment vehicles. These pooled
investment vehicles are not subject to registration under the Investment Company Act of 1940, as
amended (the “Investment Company Act”). Generally, Fund investors must invest a minimum of
$10 million, unless otherwise approved. In addition, Limited Partner interests in a Fund may be
purchased only by certain eligible investors who are (i) “accredited investors” as defined in
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and (ii)
“qualified purchasers” for purposes of Section 3(c)(7) of the Investment Company Act.