Owner’s Rep Fees- Lump Sum, Price per Square Foot, Project Percentage




We are often asked how our fees for owner’s rep and project management services are calculated. While we will price a project using whichever method is best for a client, we typically price our projects one of three ways. Our preferred method is a lump sum fee but we may also offer a price per square footage of the project or an hourly rate. You may see some owner’s rep firms price projects based on a percentage of the total project cost. However, we strongly discourage this practice.


Lump Sum Fee: Watchdog prefers to price our projects as a lump sum fee for a number of reasons. Firstly, it is the most straight forward method. There will be no surprises invoices at the end of the project because the client knows the exact cost of project management services. Additionally, the lump sum fee allows for clients to feel comfortable using the full capacity of our services. We would never want a client to be concerned about calling another meeting for fear of being invoiced for additional hours. Accessibility and transparency are two of the most important aspects you want in your owner’s rep.

Related-Avoiding Change-Orders with a Real Estate Project Manager

Price per Square Foot (psf)– We will price a project per square foot at a client’s request. Pricing per square foot is common in other disciplines (rent, architecture, engineering, construction, etc.) so some clients prefer to see it fees broken out this way. However, from a project management perspective, a price per square foot does not capture the scope of a project. For an owner’s rep, there could easily be the same amount of management and coordination for a 20,000 SF project as there is for a 30,000 SF project.


Hourly Rate- Similar to price per square foot, some clients request an hourly rate based on their needs and preferences. As previously mentioned, this is not ideal for an owner’s rep. A client should not feel concerned if a project requires more time than originally planned. In fact, problems can become larger than necessary if clients don’t involve their project manager immediately.

Related- Watchdog’s 7 Habits of Highly Effective Projects

Percentage of the total project cost– Watchdog strongly discourages this practice. The job of an owner’s rep is to save time and money on a real estate project. If project manager’s fee is based on a percentage of the total project cost, there is no incentive for the PM to find opportunities for cost saving.

Katie Craven
Katie Craven is Marketing, Communication and Brand Manager at Watchdog Real Estate Project Managers, a real-estate consulting firm that provides owner’s representation and project management services. More about Watchdog Real Estate Project Managers as well as additional blog posts can be found here.
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