A new benchmarking report from NAREIM industry partner PwC looks at how GPs are structuring management fees, incentive economics, and expense governance in today's competitive capital-raising environment.
In "Real Estate Funds Benchmarking Survey 2026 – Fees & Expenses," PwC authors write that "expense governance is emerging as a strategic lever for real estate GPs to win LP trust and protect margins amid tough fundraising and heightened LP scrutiny."
GPs indicated fee structure shifts and added clearer expense definitions, enhanced disclosures, and recovery mechanics, according to PwC.
- Expense governance:
- Clearer expense scope: Introduced clearer expense categories that can be charged to the fund, including costs related to industry publications, market information systems, research publications, ESG expenses, etc.
- Clearer allocation and disclosure: Defined fund-borne vs. advisor-borne items and enhanced passthrough expenses disclosure.
- Caps and expense coverage: Implemented fund-level expense caps and included explicit language on allowable expenses.
- Third-party benchmarking: Used benchmarking by third-party consultants to add credibility and defensibility to expense structures.
- Cost recovery clauses: Recovery mechanisms for certain costs were built into governance documents to protect GPs’ margins.
Real estate faces structurally different fee and expense pressures than broader alternatives, driven more by model design than market conditions, the report finds.
Click through to view the full report here.
Disclaimer: The views and opinions expressed in this publication are those of PwC and do not necessarily reflect the views, positions, or policies of NAREIM. NAREIM is sharing this content for informational purposes only.