LEAVE US YOUR MESSAGE
contact us

Hi! Please leave us your message or call us at 510-858-1921

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form

13
May
Post Category

💼 Broker Compensation Framework | Tying Intermediary Incentives to Quantamental Deal Quality

Last Updated
I
May 13, 2025

Fee Categories and Payment Timing

Broker fees are structured into four stages:

• Up Front (Engagement): Flat Fee triggered by data sufficiency and coverage.

• While in Diligence: Retainer Bonus triggered by minimum Bay Score and Forecast Confidence.

• At Close: % of Capital Placed tied to deal quality metrics.

• Post-Close (12-Month): Performance Bonus for realized IRR and Bay Score Drift success.

Quant-Driven Fee Model: Core Components

1. Flat Fee Engagement Bonus

Amount: $10,000–$25,000 (recoverable upon close)

• Data room passes checklist screening.

• STR/CoStar market coverage supports Forecast Confidence rating.

• Operator and brand are third-party verifiable.

2. Percentage-Based Deal Close Fee

Fee % based on Bay Score, LSD metrics at IC memo approval.

Bay Score 90+ and LSD ≤ 5% = 1.5% fee.
Bay Score 80–89 = 1.25% fee.
Bay Score 70–79 = 1.0% fee.
Bay Score 60–69 = 0.75% fee.
<60 or LSD > 20% = 0.25% or rejected.

3. 12-Month Performance Bonus

• Realized IRR ≥ Underwritten IRR.

• Bay Score Drift ≤ -5%.

• No material breach of NOI, RevPAR, Exit Cap projections.

• Bonus range: 0.25%–0.5% of originally raised capital.

Add-On Incentive Layers

• Data Quality Score (DQS): Bonus for clean, index-ready data submissions.

• Sponsor Quality Index (SQI): Higher fees for institutional-quality sponsors.

• Forecast Accuracy Multiplier: Bonus for accurate underwriting predictions (RevPAR, Cap Rate, Exit Year).

• IC Approval Rate Weighting: Broker scoring for future allocations based on IC pass rates.

Why This Matters

Bay Street’s broker system incentivizes quality over quantity. It aligns broker upside with investment performance, reducing LP risk and creating greater diligence discipline across sourcing channels.

Appendix: Contract Language (Summary)

All broker arrangements are governed by the Bay Street Broker Compensation Agreement, which formally codifies:
• Fee triggers
• Metric thresholds
• Audit rights
• Bonus payout conditions
Available by request for approved partners.

...

Latest posts
13
Jun
Quantamental Hospitality Investing
Seizing Opportunity Amid Uncertainty in the Hospitality Sector
June 13, 2025

At the 2025 NYU International Hospitality Investment Forum, a clear narrative emerged from global hotel brand leaders: while macroeconomic clouds loom and deal volumes remain subdued, long-term investors with conviction will find compelling opportunities—especially in conversions, lifestyle assets, and differentiated experiences.

Continue Reading
12
Jun
Quantamental Hospitality Investing
Sleeping on Singapore: Why the Smartest Hospitality Capital Is Heading to the Lion City
June 12, 2025

While everyone's chasing "emerging markets," they're missing one of Asia's most compelling investment stories happening right under their noses.

Continue Reading
12
Jun
Quantamental Hospitality Investing
SBA 504 Loans: A Quantamental Perspective on Financing Hospitality Ventures
June 12, 2025

The SBA 504 loan program offers a compelling financing solution for hospitality entrepreneurs, providing long-term, fixed-rate loans with low down payments. Designed to support small businesses in acquiring fixed assets, such as real estate and equipment, the program is particularly advantageous for capital-intensive industries like hospitality.

Continue Reading

Unlock the Playbook

Download the Quantamental Approach to Investor Protection, Alignment & Alpha Creation Playbook
Thank you!
Oops! Something went wrong while submitting the form.
Are you an allocator or reporter exploring deal structuring in hospitality?
Request a 30-minute strategy briefing
Get in touch