The manager's fee runs off a market cap the whole thesis says is too low

Reading the management agreement on a smaller externally managed REIT and the incentive structure is pointed the wrong way for what I want to do with it.

Base fee is 1.5% of stockholders' equity per year, incentive fee kicks in above a 7% hurdle on core earnings, and there is a termination fee at three times the trailing base plus incentive. Internalization requires a supermajority. So the manager gets paid on equity capital raised, which means issuing shares at a discount to net asset value still grows the fee base even as it dilutes me.

That is the specific problem with using this vehicle as a discount-to-NAV play. The convergence case assumes the REIT either rerates or uses the gap to buy accretively. An externally managed name with fees on equity has a live incentive to keep issuing rather than to buy back stock at 0.75x NAV, and the termination fee makes an activist path expensive enough that a $600m market cap probably will not attract one.

Questions for anyone who reads these agreements. Does a buyback authorization in the charter mean anything when the manager's fee falls with equity shrinkage? And how do you price the termination fee into a NAV estimate, as a straight liability or as a discount rate adjustment? I have been carrying it as a liability at three times trailing, which knocks about 4% off my per share number, and that feels either too crude or too generous.