What is Real Estate Asset Management?
Especially foreign Real Estate Investors are currently looking for a "Home Base" in Germany. They do not have their own offices here but bought substantial property portfolios throughout the last months. Just Property Management does not achieve the investment objectives of stable development of the portfolio value. A growing number of Investors are looking for experienced partners in Germany.These requirements are met by few Asset Management Service providers in Germany. What is their job?
Asset ManagementAs Asset Managers we look at the entire existing portfolio with regard to any planned portfolio changes.
- Operational Cost and Income Structure. We investigate the cost and income structure to identify opportunities for improvement. This can be active Supply Chain Management,
combining the entire portfolio and in the next step bundling the buying power of different portfolios we manage in negotiations with suppliers.
- Capital Expenses Based on the results of the Due Diligence. We establish a rolling Capital Expenses Budget Plan which is kept up to date with the actual needs. We identify those investments that might bring a quick win through improvement of the rental situation.
- Organising and Supervising the Property Management. Based on a detailed scope of works we develop based on the investment philosophy of the investor, we help to identify and contract appropriate service providers for Property Management.Main tasks for the Property Manager is rent collection, dealing with tenants and service providers, maintenance and repairs within the framework set by the owner or his Asset Manager.
- Performance Measurement is key to our service philosophy: What you measure is what you get! (also see article "Performance Measurement in Real Estate Investment") We have developed a system of Service Level Agreements with Key Performance Indicators for Property Management including performance reviews and evaluations. We always incorporate a performance based element into any management fee, including our own.There is also the aspect of measuring the performance of each property in a portfolio and the entire portfolio against the business plan at the outset. This aspect is reflected in our performance focussed reporting. A separate posting for Performance Measurement will follow.
- Reporting in compliance with the needs of the investor/owner. We develop a reporting structure and make this part of any contract with Property Managers and/or Facility Managers. It defines time and contents of any regular or ad hoc reports. A summary report by the Asset Manager is available to the owner on an internet based Client Portal and is the Executive Dashboard.Applying the Balanced Score Card philosophy this report contains the actual data and performance against agreed targets. Besides the obvious like rental income, this might include tenant turnover (as a measurement of the customer care by the Property Manager), the meeting of reporting deadlines and financial management and other goals that are important to the investor.Operational reporting is also of growing importance for lenders. Not only in cases of securisations extensive quarterly reports are required. If you are interested to find out more about our reporting tools please check back weekly.
- Risk Management. Because financial institutions have to perform a risk assessment before any lending, if the investor can show that he has his own risk management in place it will influence the interest rate positively. We establish and agree a risk matrix with the owner and actively manage it during the operational phase.
- Outline Proposal. As a guideline we have prepared a generic Outline Proposal which will be detailed in each case for each investor and Property.For more detailed information about Real Estate Asset Management please visit the website of Berlin Portfolio Ltd.
This list is not complete by any means but should provide an insight on the main deliverables of the Property Asset Management Service.
