Generally, how much $ is there for the GC and developer in a small project (~$10M finished value)?
TL;DR: Builder and development partnership is looking for 42.5% profit on all costs (30% of completed value). 17.5% to the builder and 25% to the partnership. How does that square with your experience?  

A builder and GP client is looking at a $1.6M opportunity. 
The opportunity includes the land, drawings, as well as city approval for a 16 apartments + ground commercial.

To build the project, the client wants to charge the partnership   $1M (17.5%) in addition to the $5.6M hard cost (before GC's fees). It's a small project and the planning is complete. I expect most of that $1M would be profit (but I don't know GC cost structures, so correct me if I'm wrong).

They'd like the completed project to appraise 25% higher than all costs (including their GC fee and financing).

The 17.5% to build and 25% margin on the development puts the total profit for the builder and partnership at 42% on top of other costs (30% of the completed value).

Seems high to me. 

How does it square with your experiences?
[{"id": "hdugp9t", "text": "Is that OH+General Conditions+Fee? Fee+Overhead for 10M depending on the area is at most 10-15% but that would be incredibly rare. I'd expect 2.5-5% for the job these days but they'll always stash more money in some of the line items in a GMP. \n\nIf Dev Fees include general conditions/hours to work then maybe it could be accurate, but another 2-5% would probably be expected.", "replies": [{"id": "hdv6b02", "text": "Dev fees are all inclusive. \n\nSo you'd put those at 10-15% of hard construction costs (i.e. 10-15% of all subtrades but excluding land, design, and other non project items)?", "replies": [{"id": "hdv9dmv", "text": "Not used to seeing numbers all in, but for small jobs it could be around 10%? Just eyeballing it, 3 year dev hour allocation, 200 an hour, 33% time on project, could be close to 5% for OH? with a 5% fee it could be around that. \n\nI'm used to seeing bigger projects tbh but I think 5% for dev OH isn't unreasonable for something small, so maybe 10%? I'm guessing at this point so take it with a grain of salt.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hduilrj", "text": " Is land at cost basis or current market value? Land value could easily have gone up a lot since purchase.\n\nAre the 16 units retail? A lot of the finished value in completed construction is in the leases, not the cost to build a big box shell. I've seen fully leased property values double their cost basis in some cheaper built retail boxes. This is also part of the reason why there is an oversupply of retail space nationwide.", "replies": [{"id": "hdv5dmu", "text": "Land cost is current market value.\nIt's 18 apartment units + GF commercial", "replies": [{"id": "he0yold", "text": "That definitely seems high. The only other explaination I could guess at is having small studio apartment units that means higher rent and value per square foot.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hdw14ew", "text": "I\u2019m not following exactly how you\u2019ve calculated the fees but for a $5-10MM construction project, the GC should be entitled to 5-7% of hard costs for general conditions and requirements (indirect costs), plus 3-5% fee, plus 1% for their insurance. \n\nI would break out the developer fee and the builder\u2019s fee as they\u2019re fees for completely different scopes of work. The developer fee for a project of this size should be 5%.", "replies": [{"id": "hdwx4zw", "text": "I think this is right on the money. The only thing I would slightly caution is that GC/GRs can swing pretty wildly on the actual job your looking at and the particulars so I\u2019d view the percentage as a \u201cballpark\u201d pending some more detail and review.", "replies": [{"id": "hdx3a2c", "text": "Totally agree. I\u2019m a commercial GC. Some of our commercial interiors projects have general requirements costs under 1%. More complex, site heavy projects can be closer to 10%, with swppp, winter conditions, temporary enclosures, etc.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hdwxj22", "text": "In my developments, my builder does not get any profit from the venture. They\u2019re paid a GMP contract that includes GCs, GRs, fee, etc. and that\u2019s where they make their money. Partnership always gets 100% of profits here.", "replies": [], "depth": 1}]