Pulley vs. Carta for a Multifamily Property Manager

A promote interest, the outsized share of profit a general partner earns for sourcing and operating a specific deal once investors clear their preferred return, lives inside that deal's own partnership structure, not in the management company's cap table. It's a different legal instrument entirely from company equity, even though the same senior people at the firm often hold both. Keep the two tracked separately, in separate documents, reviewed by separate people if your team is large enough to support that split.

A useful habit: whenever someone at the firm says "equity," ask them to specify which kind. The word gets used loosely in property management conversations in a way it rarely does at a typical operating company, precisely because both instruments are genuinely in play at the same time.

List every regional GM, asset manager, or senior leasing director who's been told they'll get a piece of the management company, distinct from any deal-level promote they might also participate in. Property management firms that grew by adding regional offices organically often have several of these informal promises scattered across different office heads, made at different times by whoever was running the company then.

Get each promise into a short signed memo before moving to the next step, noting whether it was meant as real equity, phantom equity, or, in some cases, something the GM themselves assumed was a promote interest when it was actually intended as company equity. That last confusion is more common than owners expect, and it's worth clearing up directly with each person rather than assuming everyone already agrees on what was promised.

A regional GM responsible for a portfolio's leasing and operating performance usually fits phantom equity tied to that portfolio's own fee revenue or margin, rather than real ownership in the management company. Reserve real equity for someone becoming an actual partner in running the firm, not simply a strong regional operator you want to retain through the next lease-up cycle.

Property valuations, and the discount rates used in a 409A valuation of the management company itself, both track broader rate conditions, with the 10-year Treasury yield recently near 4.44%¹ serving as a common reference point. A rising-rate environment can compress both the value of properties your firm manages and the assumptions behind your own company's valuation, which is worth understanding before you're surprised by a 409A that comes in lower than expected.

Pulley fits a management company with a small ownership group formalizing phantom equity for a couple of regional GMs, wanting a clean setup without much process overhead. Carta fits a firm managing ownership across several related entities, raising outside capital to fund growth, or preparing consolidated records for a sale or a recapitalization.

Property management is a fee-based business, which means its own valuation tends to track management fee revenue and contract retention rather than the value of the real estate it manages. Whichever platform you choose, make sure whoever handles your 409A understands that distinction, since applying a real-estate-asset valuation framework to a fee-based management company can produce a misleading number.

Neither Pulley nor Carta is built to track deal-level GP promote waterfalls, and trying to force that structure into a company cap table tool creates confusion rather than clarity. Keep promote interests in their own deal-specific records, managed alongside your fund or joint-venture accounting, entirely separate from the platform tracking who owns what in the management company itself.

It's common for a senior operator to both hold phantom equity in the management company and personally co-invest alongside the firm in a specific deal they oversee. Document the co-investment terms in that deal's own partnership agreement, separately from the company-level phantom equity plan, and make sure the person understands which document governs which payout, since the two can produce very different outcomes if the property underperforms while the management company overall does well, or the reverse.

Follow the sequence in this order:

1. Separate the management company's cap table from any deal-level GP promote interests.
2. List every regional GM, asset manager, or leasing director who has been promised company-level equity.
3. Choose phantom equity tied to a portfolio's fee revenue or margin for most roles, and reserve real equity for true partners.
4. Ask your valuation provider to explain the interest rate assumptions behind the management company's 409A valuation.
5. Pick Pulley or Carta based on how many related entities and outside investors you have.
6. Keep promote waterfalls in deal-specific records, not in the company cap table tool.