Item 5. Fees and Compensation
Subject to specifically negotiated agreements with clients, National typically
charges the following fees:
Management Fees. Investors in National’s Funds pay management fees
based upon the aggregate size of their investment, which fees generally
range from 0.90% to 1.35% per year, as provided in the applicable governing
documents. Separate account clients pay management fees as provided in
the relevant investment management agreement.
Incentive Fee. In some cases, National’s fee arrangements include an
incentive fee calculated based upon the performance of a client’s account in
relation to an agreed upon performance “benchmark.” Please refer to the
discussion of incentive fees in Item 6 – Performance Based Fees and Side-
by-Side Management, below.
National Real Estate Advisors, LLC
Form ADV Part 2A (Brochure)
March 25, 2026
The Funds’ governing documents permit National to reduce or waive fees
applicable to an investor in a Fund at National’s discretion, including National
employees or other investors based on commitment size or other strategic
or relationship factors. National has entered into and will enter into side
letters or similar agreements with certain Fund investors addressing fee
terms. As discussed more fully below, side letters have the effect of providing
additional rights or supplementing certain rights or terms of a particular
Fund’s governing documents as they relate to certain investors, including in
some cases reduced fee arrangements.
Fee Billing. Management fees are payable quarterly and will be prorated
daily for partial calendar quarters. The specific manner in which fees are
charged by and paid to National is established in the investment
management agreement with the client and applicable Fund documents.
Clients either elect to be billed directly or, in some circumstances, authorize
National to withdraw fees from their accounts by unit redemptions equivalent
to fees due. If clients elect to authorize National to have fees directly paid
from client accounts, clients should review their billing invoices to verify fee
calculations as reflected in their account statements provided by (as
applicable) National or their account custodian.
Other Expenses. In addition to the management fee and any incentive fee (if
applicable and earned), clients are responsible for the payment or
reimbursement of expenses directly or indirectly incurred in connection with
National’s management and advisory services, including, without limitation:
(i) reasonable fees and expenses of any custodian appointed for the
safekeeping of a client’s cash, securities, loans, and other property; (ii) legal
expenses; (iii) audit and accounting fees; (iv) expenses of revising,
amending, or modifying the relevant operating agreement or other applicable
organizational documents; (v) costs and expenses of meetings of Fund
investors and of preparing, printing, and mailing quarterly and annual reports
to the investors; (vi) various expenses related to client investments,
including, but not limited to, legal fees, brokers’ commissions chargeable to
the client in connection with transactions to which the client is a party, costs
incurred in doing business in any jurisdiction, appraisal fees, title company
charges and any other expenses (including taxes) incurred in perfecting title
(to the extent not paid by sellers); (vii) all costs and expenses (including taxes
National Real Estate Advisors, LLC
Form ADV Part 2A (Brochure)
March 25, 2026
and travel) incurred in connection with the acquisition, disposition,
development, monitoring, inspection, management, maintenance, repair,
leasing and ownership of the real property assets of the client; (viii) the costs
of third party appraisals or valuations in connection with the valuation of client
assets; (ix) the costs of third-party performance return measurements (note
that, while these costs are treated as client expenses, the resulting
performance figures, in addition to being reported to the clients, are cited by
National in marketing materials, presentations and similar matters); and (x)
out-of-pocket expenses payable to third parties directly related to
unsuccessful efforts to acquire or make an investment (i.e. “broken deals”)
for a client’s account, such as appraisals, due diligence, travel expenses
(subject to an annual “cap” for certain clients). For certain client accounts, to
the extent expressly disclosed to, and approved by such client(s), certain
fund administration fees paid by National to unaffiliated third-party service
providers are also reimbursed to National.
As provided in their organizational documents, Funds organized in the
European Union (“EU”) are also generally responsible for the payment or
reimbursement of expenses related to the costs of compliance with
applicable EU laws and regulations, including, without limitation, Directive
2011/61/EU of the European Parliament and of the European Council of 8
June 2011 on Alternative Investment Fund Managers and amending
Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009
and (EU) No 1095/2010 (“AIFMD”), the EU General Data Protection
Regulation 2016/679 (“GDPR”), the Cross-Border Marketing Rules, the
Sustainable Finance Disclosure Regulation (2019/2088) (“SFDR”), which
took effect from 10 March 2021, and the Regulation on the establishment of
a framework to facilitate sustainable investment (2020/852) (the “Taxonomy
Regulation”), relevant European Securities and Markets Authority (“ESMA”)
Guidelines, any other applicable legislation or regulations related to the
European Commission’s Action Plan on Financing Sustainable Growth,
applicable Luxembourg and EU anti-money laundering laws (“AML Laws”),
Luxembourg laws regarding the register of beneficial owners (“RBO Law”),
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