Management agreement is the asset-lightest possible coliving operator structure. The operator provides branding, ops, sales, and community management; the owner retains the property and bears operating risk. The operator earns a management fee, typically 4–8% of revenue plus an incentive fee on NOI above a threshold.
This structure suits operators that want pure platform exposure (no property risk) and owners that want professional operations without giving up the asset. It's lower-margin per property than master lease (the operator captures less upside) but allows much faster portfolio expansion.
In the field
OYO Life largely operates on management agreements. Common's institutional partnerships use this structure. The structure is dominant in branded-residential hotel-style coliving (lyf, Adagio).
Common pitfalls
- ×Management fee structures that don't align operator and owner incentives — too much base fee creates passive operators.
- ×Performance hurdles set unrealistically high — operators stop investing in the asset.
- ×Termination rights asymmetric — owners frequently retain unilateral termination, leaving operators exposed.
- ×Confusing management agreement economics with master lease economics in operator track-record reporting.