What is private asset management?
Private asset management is designed to be active management for passive investors that either don’t have the time or expertise to handle the regular operations of their commercial real estate investments. Asset managers (AMs) help make important investment decisions on behalf of their clients to drive net operating growth, optimize returns, and mitigate overall risk. AMs can oversee the property managers, help negotiate leases, provide data analysis, provide market research, revenue forecasting and project management, to name a few.
How is it different than property managers?
Property managers handle the day to day operation of the property itself. Asset managers handle the financial aspect of the investment and typically hire and oversee the property managers. Asset managers can act as a buffer between the property managers and the owners themselves, providing a time value for investors.
How do asset managers help maximize commercial real estate investments and portfolios?
- Driving income growth – One of the main duties of the AM is to ensure that the property is maximizing rent growth and occupancy rates. Healthy properties inevitably have turnover and so it’s great importance to ensure that prospective tenants are paying market rents and quickly filling space.
- Streamlining expenses – The other side of driving NOI (net operation income) growth is to help reduce expenses whenever possible to make the property more efficient. This can range from moving leases to cover operating expenses to recommending energy efficiencies or accelerating cost recovery.
- Analytics and Budgeting – Understanding the real financials of the property and estimating future expenses is key to mitigating risk in the property. AMs will help with overseeing the financials and help fund anticipated costs that are sure to come up such as vacancies or deferred maintenance issues. Annual budgets and operating data help investors understand where they are and where they’re going.
- Acquisitions and Dispositions – Having a professional evaluate both acquisitions and dispositions means maximizing value for the income you’ve created. Anticipating market shifts, diversifying risk, and handling unforeseen problems helps take a lot of the headache out of investing.
Who needs asset management?
Any investors that have commercial real estate and want assistance with growing and maximizing the portfolio. Many of our clients are high net worth individuals with careers and family and prefer to outsource the financial operations to a professional. Our white glove servicing means that someone is attentively watching and reporting on the health of your investment.
Do you work with commercial real estate brokers and property managers?
Commercial brokers and property managers are some of our best sources of clients. Asset management works in coordination with many industry professionals such as property managers, brokers, and contractors to ensure their clients are not putting themselves at risk. Many brokers know of “absentee landlords” that could benefit from professional help. Turning properties around means higher valuations from increased income. Ultimately, driving the growth of assets and portfolios means more transactional opportunities for both commercial brokers and property managers.