Like investors who buy stocks, real estate investment professionals seek short-term profits through rent payments or long-term gains through property appreciation and sale. Asset managers focus on reducing operating expenses and maximizing rental profits.
Real estate asset managers typically have a finger on the pulse of local market trends and research. They also stay current on political, economic, and financial news to mitigate risk for their firm’s investors. They work to construct a business plan for each property acquisition that maximizes its value over time and generates stable cash flow. These plans typically include assumptions about property revenues, expenses, and occupancy. They also perform physical inspections of potential investment properties.
During the hold strategy of a commercial property, asset management teams help owners achieve their goals by performing competitive market analysis on rent rates and comparable property performance. They also negotiate service contracts and minimize owner maintenance costs by shifting these responsibilities to tenants when possible.
For investors seeking to maximize returns on commercial real estate investments, an asset manager will help them determine which properties they should buy and sell based on their specific investment goals. It includes making financial projections and developing budgets for property expenses. Regarding leasing, asset managers are responsible for negotiating letters of intent and lease documents with brokers. They also arrange the fine points of each lease, including free rent, scheduled escalations, tenant improvement allowances, and more. Caliber Funds work with property management teams to ensure all capital projects are executed on time and within budget. They also oversee renegotiating debt financing as it approaches its maturity dates. They use forecasting tools to understand the optimal timing for debt refinancing.
An asset manager oversees operational facets of the property, such as tenant interactions, leasing, and budgeting. They also assist with property transactions and market analysis. To maximize investor return, the asset manager must balance achieving short-term revenue goals with maximizing long-term value for the asset. It is achieved by conducting competitive market analyses, minimizing vacancy, and adjusting rental rates.
A real estate asset manager will oversee key vendor relationships, including third-party property management companies, brokers and service providers. They will also renegotiate vendor pricing where possible. Additionally, they will create a capital plan and operating budget for the property. It involves forecasting income and expenses for the upcoming year and comparing those projections to comparable properties in the area.
When investors decide to sell their commercial real estate investments, the asset manager plays a key role in the sales process. They use their experience to maximize the value for investors and negotiate the best deal. They also assist in purchasing new investment properties for their clients, working with brokers and attorneys to draft letters of intent and contracts. They can also advise improving property values by identifying ways to boost value and return on investment, particularly for fix-and-flip investors.
Other duties include tracking budget variances and course correcting as needed; managing relationships with stakeholders, including investors, lenders, and senior-level management; monitoring market trends; and preparing and adjusting property financial projections and financing strategies. Additionally, they may oversee the process of appealing real estate tax assessments and manage proposal requests with service providers to reduce costs.
Whether a property needs new roofs or major renovations, real estate asset managers oversee capital investment and expenditures. They make financial projections based on their research and comparisons to similar properties’ performance. They also help owners minimize expenses by shopping for service providers to get competitive pricing and structuring leases to shift maintenance and capital expense responsibilities to tenants. Asset managers also advocate for property tax appeals when re-assessments increase greatly.
When it comes time to sell the asset, real estate asset managers negotiate the terms of a sale and oversee the transaction process. They work with brokerage firms to secure the best price for their client’s investment property. They also assist with financing by preparing loan documents and securing loans from lending institutions or private investors.