Anyone want to help clarify the roles of "Property Management Companies"?
I am currently working on a project and have a few questions about commercial property management companies...

I assume that I can just have them manage/run the property and in return I pay them a fee/part of rents or NOI, correct?
***OR**

Do you have to sell them the property and they essentially take it off your hands and manage/run the property themselves?

All the research I have done into several company websites shows them talking about owning, acquiring/developing, **AND** managing. I am just a tad confused b/c I always assumed you could just pay them a fee.
[{"id": "cqlfg2b", "text": "What you are talking about is known as fee management or third party management, meaning they do not own the property and just take a fee.  They usually take a % of the collected rent (NOT NOI), in addition to billing salaries against the property, marking up maint/capital projects to over see them, and charging accounting etc fees.  The actual fees will depend on the size of the property.  \n\nMany large companies you think of as property management companies, also buy and develop properties.  Some exclusively do that and don't touch anything they do not own.  \n\nA real common life cycle is folks start buying properties and managing them, then they buy more hire more people etc and one day say 'shit we are more a property management company now than a real estate holding company.  We have great systems etc.  We should sell this!' then they do exactly that by finding other property owners who would like them to manage their properties for them, for a fee.", "replies": [{"id": "cqlfk09", "text": "Just for further clarification, the fee/3rd party management company can also happen to be a company who specializes in buying/developing that property type, correct?", "replies": [{"id": "cqlg2pn", "text": "yep and its common.  \n\nJust for a few data points-  \n\nThe company I use to work for started with a couple guys who owned a few hundred units each and decided they should partner up on a property management venture to reduce their overhead (more units is pretty much always cheaper to manage).  They developed and bought more and more until they got very big.  They eventually pretty much retired and hired people to run the property management business.  Those people eventually became partners and decided to develop new properties.  They also figured out they could do fee management to grow faster.  When good deals are out there they buy and when money is cheap they develop.  When times are shit tastic they dump everything into finding new fee management customers.  \n\nAnother company I'm pretty familiar with started rehabbing houses, then apartment buildings, and managing them all.  They quickly figured out they actually weren't that interested in holding these things long term, they really liked rehabbing.  So they came up with a model of buying total shit holes, then trying to whole sale them.  If they couldn't whole sale them, they went ahead and bought them and rehabbed them, put a tenant in it, then tried to sell it as a turn key rental and offered on going management.  They are a pretty decent sized fee management company now.  \n\nMy company I am with now kinda did this totally fucking reversed.  They started out as an investment group and purchased a lot of properties.  Then they figured out it was dumb as hell not to be a brokerage and get their own commissions, so they started a brokerage.  They managed theirself or out of state stuff hired folks.  You are talking mostly single tenant commercial buildings and strip centers etc so not a lot of management anyhow.  Anyhow it became a semi successful investment brokerage and come crash time to get REO business the banks wanted them to fee manage the apartments etc they were listing.  So they brought in agents with management experience.  Management isn't really our thing, and depending on the property manager a lot of us will only do it short term to add value to something we want to sell and commission, but we actually have a few guys now who do only management and have been really successful at that.  \n\nAnyhow, I'm just saying it depends.  There are tons of ways folks get into fee management, and they focus on all kinds of things besides it.  In my examples the first is primarily a property management business, the second is primarily a construction/rehab business, and we are primarily commercial investment brokerage who just really doesn't want our clients to have to go somewhere else for management.", "replies": [{"id": "cqlisj6", "text": "Dude, I appreciate the explanation/example response. It's helped me gain a better understanding. \n\nMy project involves creating a theoretical first time PE fund and we have to focus on medical office type properties, which in itself has been a total bitch trying to find up to date data for the secondary markets. And we wanna set our fund up to hire 3rd party medical property managers since my group wouldn't have the manpower or ability to effectively manage the properties well enough that people would be willing to (hypothetically) give us millions of dollars to invest. ", "replies": [{"id": "cqlvtmk", "text": "Since I didn't see it above the typical management fee on a commercial building can be 3-4% of Effective gross revenue. ", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]