Promote is the general partner's share of profits above the preferred return in a syndicated real estate deal. Typical structure: GP receives 20–30% of profits above the pref.
The promote is the GP's performance-based upside. After LPs receive their pref and capital back, the remaining profits split according to the waterfall — typically 70/30 or 80/20 LP/GP at the first tier, sometimes with escalating GP share at higher return hurdles.
LA multifamily promote structures range widely. Aggressive structures (30% GP share at low hurdles) can misalign incentives. Tiered structures with higher GP share at higher returns tend to align interests better. LPs should evaluate promote structure carefully.
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