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Key Takeaways
- The foundational monthly operational cost for running the Industrial Park, comprising fixed overhead and essential wages, averages approximately $71,083 before factoring in sales-dependent variables.
- Based on projected 2026 revenue of $42 million, the total annual running expenses, heavily influenced by variable commissions, are estimated to reach about $15 million.
- Corporate payroll is the single largest recurring fixed expense, consuming $47,083 monthly to support the 35 full-time employees required for operations.
- To safely cover initial fixed expenses and potential early shortfalls, a minimum working capital cash buffer of $911,000 is required upon launch.
Running Cost 1 : Corporate Payroll & Wages
2026 Payroll Baseline
Your 2026 payroll budget is set at $565,000 annually for 35 full-time employees (FTEs). This results in an average monthly burn rate of $47,083, which is a critical fixed cost to manage before revenue stabilizes.
Cost Inputs
The $565,000 budget includes two major salaries: the CEO at $250,000 and the Development Manager at $150,000. This cost is fixed for 2026, covering all 35 staff regardless of property sales volume. You need the FTE count and target salaries to set this baseline.
- CEO salary: $250k
- Dev Manager: $150k
- Total FTEs: 35
Headcount Control
Managing payroll means controlling headcount growth beyond the planned 35 FTEs. Since this is largely fixed, optimization focuses on productivity per employee, not immediate cost cutting. If onboarding takes 14+ days, churn risk rises defintely. Avoid hiring for speculative roles too early.
- Freeze hiring past 35 FTEs.
- Tie bonuses to asset performance.
- Audit benefits spend vs. market.
Executive Pay Risk
The high concentration of executive pay—$400,000 between two roles—requires tight linkage to capital deployment milestones. If the Development Manager role is underutilized, that $150,000 expense drags down contribution margins quickly.
Running Cost 2 : Office Space Lease
Rent Stability
Your headquarters rent is a fixed operating cost, not tied to the success of your industrial park deals. Expect $10,000 monthly, totaling $120,000 annually, regardless of how many properties you sell or lease this year. This is baseline overhead you must cover before generating deal revenue.
Fixed Overhead Input
This $10,000/month covers the physical space for your corporate team managing acquisitions and asset management. To budget accurately, you need the signed lease agreement or broker quotes for your desired Class-A office space. It sits alongside other fixed costs like $9,000 monthly for insurance and utilities.
- Input monthly rent rate
- Confirm term length commitment
- Factor in tenant improvement costs
Controlling Occupancy Cost
Since this is a fixed lease expense, focus on minimizing its proportion relative to revenue growth. Avoid signing leases longer than five years initially, even if the per-square-foot rate is slightly better. You defintely want to avoid over-leasing space for projected headcount growth that hasn't materialized yet.
- Negotiate shorter initial terms
- Demand rent-free periods upfront
- Ensure favorable early termination clauses
Lease vs. Activity
Unlike brokerage fees (65% of revenue) or transaction legal costs (30% of revenue in 2026), the office lease is pure fixed overhead. If your $42 million revenue forecast is missed, this $120,000 expense remains, raising the minimum operational threshold for the entire firm.
Running Cost 3 : Brokerage and Permitting Fees
Brokerage Fees Hit 65% of Revenue
Brokerage and permitting fees are a major Cost of Goods Sold (COGS) item, starting at 65% of total revenue in 2026, translating to $273,000 annually. These expenses directly track property sales and development success, so watch transaction volume closely.
Estimating Transaction COGS
These COGS cover costs like real estate broker commissions and required local government permitting fees for new construction or repositioning. The 65% rate is applied against the total revenue generated from those specific property transactions. You need the final sale price or development value to calculate this expense accurately. Honestly, this is a pure transaction cost.
- COGS tied to property sales.
- Rate set at 65% for 2026.
- Annual cost estimate: $273,000.
Managing Transaction Costs
Since these are transaction-based, control means optimizing deal structure, not cutting compliance corners. Focus on reducing the time to close deals, which lowers carrying costs that indirectly inflate the effective transaction cost. Also, negotiate commission caps early in your agreements.
- Negotiate commission structures upfront.
- Speed up transaction closing times.
- Ensure permitting is bundled where possible.
Scaling Impact
If your 2026 revenue projection changes, this $273,000 figure moves proportionally because it is a fixed 65% of top line. Founders must understand that this cost scales directly with successful deal realization, unlike fixed overhead. It's a good problem to have, but it defintely eats margin fast.
Running Cost 4 : Marketing & Leasing Commissions
Leasing Commission Impact
Leasing commissions are a major variable expense tied directly to deal flow. In 2026, these commissions are set to consume 60% of revenue, costing the firm $252,000 against the projected $42 million topline. That's a hefty chunk of gross proceeds going out the door just to close the deal.
Commission Structure
This 60% figure covers the variable payouts to brokers or internal teams for securing tenants for the industrial park space or finding buyers for developed assets. You need the total projected revenue and the agreed-upon commission percentage to calculate this outflow. It’s a direct cost of sales, unlike fixed overhead. You defintely need to model this carefully.
- Input: Forecasted Revenue ($42M).
- Input: Commission Rate (60%).
- Result: Annual Cost ($252k).
Reducing Broker Fees
Since this is a percentage of revenue, controlling it means controlling the deal structure or bringing more activity in-house. If you can shift more leasing activity to your internal development team, you might save significant amounts. Watch out for standard market rates; sometimes 60% is high for this sector.
- Incentivize internal team performance.
- Negotiate lower rates for portfolio renewals.
- Focus on build-to-suit deals where terms are fixed early.
Cash Flow Check
Remember, $252,000 in commissions hits your cash flow when the deal closes, potentially before all lease payments are secured. If you rely heavily on merchant-build sales, ensure your working capital can cover these large, lumpy payouts immediately following a disposition.
Running Cost 5 : Transaction Legal Costs
Transaction Cost Trajectory
Transaction legal costs are a major variable expense, budgeted at 30% of revenue ($126,000) for 2026, but this percentage should halve to 15% by 2030 as the portfolio stabilizes. That reduction relies heavily on revenue shifting from asset sales to predictable lease income.
Cost Inputs and Budget Fit
These fees cover due diligence, closing documents, and title work tied directly to asset acquisition or sale. Since it’s 30% of revenue in 2026, you need accurate revenue forecasts—$42 million—to hit the $126,000 budget. You're paying for certainty during high-stakes property transactions. Honestly, this cost is COGS, not true overhead.
- Covers deal structuring.
- Tied to property sales volume.
- Budgeted at $126k initially.
Managing Deal Flow Expenses
To drive the 30% down to 15%, standardize your legal templates for build-to-suit contracts now. Using outside counsel for every minor amendment inflates this line item fast. Negotiate fixed fee arrangements for routine closings rather than relying on hourly rates during peak transaction volume.
- Standardize closing docs.
- Negotiate fixed caps.
- Use internal counsel for simple leases.
The 2030 Shift
The expected drop from 30% to 15% assumes your portfolio mix shifts heavily toward stabilized lease income (Effective Gross Income) rather than one-off asset sales by 2030. If sales volume stays high, this cost will remain elevated, defintely challenging your margin goals.
Running Cost 6 : Accounting and Legal Retainer
Fixed Legal Base
This fixed retainer covers essential corporate compliance and standard legal advice for your industrial park operations. Budgeting $5,000 monthly locks in $60,000 annually for ongoing support, separate from transaction-specific legal fees. This cost hits your P&L every month, regardless of property sales volume.
Retainer Inputs
This $5,000 retainer secures baseline corporate accounting support and preventative legal counsel. It’s a fixed overhead, unlike the variable transaction legal costs budgeted at 30% of revenue in 2026. You need to define the scope clearly to prevent overages.
- Monthly fixed cost: $5,000.
- Annual commitment: $60,000.
- Covers: Corporate structure maintenance.
Managing Scope
Manage this retainer by strictly defining what falls under the fixed fee versus what triggers billable hours for development deals. A common mistake is letting standard contract reviews bleed into the retainer scope. We defintely see higher savings when scope creep is controlled.
- Define retainer scope precisely.
- Monitor utilization rates.
- Benchmark against peers’ fixed legal spend.
Fixed Cost Context
This $60,000 retainer sits alongside $10,000 monthly office rent and $9,000 monthly general overhead. Honestly, this fixed base cost must be covered before any revenue hits, making it critical to monitor your burn rate closely during development phases.
Running Cost 7 : General Fixed Overhead
Fixed Overhead Total
General Fixed Overhead totals $9,000 monthly, covering essential corporate infrastructure that doesn't change with deal flow. This cost is non-negotiable month-to-month, meaning it must be covered regardless of leasing activity or property sales volume in 2026.
Cost Breakdown
This fixed bucket groups non-operational necessities for the corporate entity. You need quotes for Corporate Insurance ($3,000) and utility estimates ($1,500). IT Systems run $2,500 monthly, while Travel is budgeted at $2,000. These figures are separate from variable transaction fees.
- Insurance: $3,000
- IT Systems: $2,500
- Utilities: $1,500
- Travel: $2,000
Managing Fixed Spends
Managing this overhead means challenging the baseline assumptions yearly. Review IT contracts annually to ensure you aren't paying for unused licenses or legacy software. Travel costs are the easiest to control; set firm per-diem limits instead of just tracking receipts. Defintely shop insurance quotes every renewal cycle.
Break-Even Impact
Since this $9,000 is fixed, it directly pressures your contribution margin before covering payroll and rent. You must ensure monthly income from stabilized leases covers this $9k plus the $15,000 in other fixed costs before development revenue becomes reliable.
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Frequently Asked Questions
The fixed operational base (rent, wages, overhead) averages about $71,083 per month in 2026 Total costs, including variable commissions and permitting fees, scale with revenue; based on the $42 million forecast for 2026, total annual expenses are around $15 million