What is a typical sponsor co-invest percentage in a CRE JV?

Co-invest by deal type and lender perspective

Institutional fund LP standard: pension funds and large endowments often set 10% sponsor co-invest as a minimum. The 10% alignment threshold is a longstanding LP-side practice; it makes sure the GP has meaningful capital at risk before earning a promote. Some institutional LPs require 5% but with offsetting concessions on promote splits.

High-net-worth syndication: typical 5% to 10% sponsor co-invest. The economics often favor the sponsor, lower co-invest, higher promote, and the syndication broker premium provides the GP with deal-level fees that supplement the co-invest economics.

Family office co-invest: ranges widely, from 5% to 30%+ depending on the relationship, the deal type, and the family office's preference for control. Larger family offices often anchor a deal with 30% to 50% of the equity and accept a lower promote in exchange for control rights.

Construction and value-add: GP co-invest tends to run higher (10% to 20%) on heavier-business-plan deals because LPs want demonstrated commitment from the operator. Stabilized core acquisitions sometimes accept 5% co-invest because the operating risk is lower.

Lender impact: most institutional senior lenders factor sponsor co-invest into recourse and key-principal underwriting. Sponsors with meaningful co-invest may negotiate softer recourse, lighter springing recourse, or partial guaranties rather than full recourse. Bridge debt funds care more about KP net worth and liquidity than co-invest percentage.