They can, depending on the compensation method a particular sponsor chooses.
For most real estate projects, sponsors have two primary compensation methods:
- A profits interest, often referred to as promote
- Fees
Therefore, yes, sponsors can charge fees.
Can sponsors pass on CrowdStreet’s fees to investors? It’s possible, since CrowdStreet’s fees would most likely be considered a part of the cost of capital for sponsors. Therefore, while CrowdStreet does not directly charge fees to investors, sponsors can and sometimes will build these fees into their deal.
CrowdStreet asks sponsors to be transparent about their fees within the offering documents, which can be found on the details page. CrowdStreet also requires sponsors to list all applicable fees on a dedicated tab on the offering’s detail page. Please reference these documents before investment.
For more information on sponsor fees, refer to this article: Shining a Spotlight on Real Estate Sponsor Fees.