Developer vs. Fee Developer: What’s the Right Approach for Your Project?
At Helm Ventures, we frequently work with clients who come to us with a site, a vision, and capital, but uncertainty about what kind of development engagement they actually need. Should they bring in a partner to share the risk and help drive value creation? Or should they retain full control and simply hire an experienced team to execute?
This question comes up again and again, and we understand why. The stakes are high, the structures are complex, and the long-term implications are real. That's why we wrote this article: to break down the core differences between hiring a fee developer and engaging a development partner, and to help clients make more confident, strategic decisions based on their goals, risk profile, and the needs of the project.
At Helm Ventures, we operate from a unique position in the market, we are both developers and fee developers. That dual capability gives us a 360-degree perspective on how projects can be structured to create the most value for our clients, whether they are institutions, family offices, entrepreneurs, or long-time asset owners.
In our experience, one of the most fundamental decisions to get right early in the life of a project is this:
Should I bring in a development partner to co-invest and drive value alongside me, or should I hire a fee developer to execute my vision on a fixed or structured compensation model?
This is not a binary question, and the answer depends on the specific needs, risk tolerance, capital constraints, and experience level of the client. But understanding the pros and cons of each route is critical to unlocking the full potential of your site or asset. Below, we explore both models in depth and provide real-world insights into how each structure plays out.
What Is the Difference?
Development Partner (Equity Participant or Co-GP)
In a development partnership structure, Helm Ventures or another firm acts as a co-GP or equity participant. That means we invest our time, expertise, and often capital into the deal alongside you. We take on development risk and typically share in the upside through a carried interest or promote. In this role, we are fully aligned with the success of the project, because our compensation is directly tied to performance.
We contribute to every aspect of the process: entitlement, design, construction oversight, lease-up or disposition, and often help source equity or debt capital. Because our returns are tied to the success of the project, we treat the deal like our own—because it is.
Fee Developer (Development Manager or Owner’s Representative)
In a fee development structure, Helm Ventures is engaged as a service provider. We oversee the project from entitlement through delivery, managing consultants, contractors, permitting, and budgets. We are paid a flat fee, a percentage of total development cost, or a milestone-based compensation structure.
Many times, in this model, we do not have equity in the deal and are not exposed to market risk. The client retains full control and also bears full upside (or downside). This structure is best suited for clients who have already assembled capital and land but lack the in-house capacity or expertise to run the development process.
When a Fee Developer Is the Right Fit
There are specific circumstances where a fee development model is the best path forward:
You already control the land or asset and have capital allocated.
You know the general vision for the project but need an experienced execution partner.
You want to preserve 100% of the upside and are willing to assume the risk.
You are a fund or institution with fiduciary obligations or risk tolerance constraints.
You value control and want to manage project direction closely while relying on technical expertise.
Example: A private investor in Bethesda acquired a medical office building slated for conversion. They had a strong pipeline of potential tenants but lacked the experience to navigate entitlement, permitting, and contractor negotiations. Helm Ventures came in as a fee developer, overseeing every step, from architectural redesign to tenant coordination. The investor retained all the equity, and we delivered the project on time and within budget, adding substantial value without diluting their position.
Cost Analysis: Typical development fees range from 4% to 6% of total development cost, depending on the complexity, risk, and timeline. On a $20M project, this equates to $800,000 to $1.2M in fees, a significant cost, but one that delivers expert oversight and allows the owner to retain full economic benefit.
Strategic Insight: Fee development is a high-leverage model when you have a strong asset, clear vision, and the ability to fund the project. You hire expertise, not risk-sharing.
When a Development Partner Creates More Value
In other scenarios, a true development partner can significantly de-risk and accelerate a project.
You lack the internal capacity or team to manage the complexity of development.
You’re unsure how to unlock value from a property and need strategic input.
You want help sourcing capital or strengthening the investment story for equity or debt partners.
The project requires heavy lifting: entitlement work, zoning changes, or creative reprogramming.
You want a partner who shares the risk and upside with you.
Example: An owner in South Florida had secured control of a 2-acre site in a rapidly gentrifying corridor. The zoning was favorable, but the project lacked clear vision, development strategy, and capital. Helm Ventures stepped in as a co-developer. We restructured the site plan to add density, repositioned the design to better match the market, brought in capital partners, and led the entitlement and design process. In exchange, we received a carried interest and a project management role. Without our involvement, the project would likely have stalled.
Cost Analysis: In a partnership model, the developer typically earns a promote, a share of profits after capital is repaid. While this means sharing upside, it also means reducing personal exposure and accelerating project viability. Often, this structure brings millions in additional value that outweighs the profit share.
Strategic Insight: Partnering with a developer can unlock value that might otherwise stay trapped, whether that’s due to permitting complexity, market misalignment, or lack of execution bandwidth. It’s often the best path for underutilized or high-potential sites.
Choosing the Right Structure
While there is no one-size-fits-all answer, here are some strategic questions to ask yourself:
Do I control the land, but lack development experience?
Am I trying to preserve capital and maintain long-term ownership?
Do I need help reimagining or repositioning the site?
Do I want a true partner with financial skin in the game?
Am I prepared to bear all the risk for all the upside?
Each question pushes you closer to a model that best fits your needs.
Ultimately, it comes down to two key considerations: control and alignment. Fee development gives you more control, while a development partner brings more alignment. The right choice depends on your priorities, experience, and capacity.
Final Thoughts
At Helm Ventures, we approach every opportunity with the same core principle: build value, not just buildings. Whether we serve as your development partner or as your fee-based execution team, our goal is to bring clarity, confidence, and performance to the process.
If you’re evaluating a project and wondering how to move it forward, or if you’re uncertain whether you need a partner or a service provider, we’d be glad to talk.