An asset manager plays a critical role in making a real estate investment successful.
An asset manager’s responsibility is to look at each property through the eyes of its owners and drive profitability while making strategic decisions and guiding the property managers in the execution of the asset’s business plan.
Asset Managers in our company drive success before and after acquisition.
They work alongside the acquisitions team to understand the partnership and financing structure of each asset and develop the business plan for the property. They analyze the current operations of the potential acquisition, looking for property inefficiencies and identifying opportunities for improved performance even before the property is acquired. They help the acquisitions team develop the initial business plan. The business plan may be a complete renovation, rebrand, and repositioning of an asset for a long-term hold. It may be a light renovation and reposition for a three-to-five-year hold. Or it may be an acquisition where value is added purely through improved and streamlined management. Participating in developing the business plan increases the likelihood of successful execution after acquisition.
Property business plans are created and are provided to our operations team to be implemented.
Business plans are updated annually at a minimum or whenever market conditions or a financing change is made so that the entire team – across operations, marketing, HR, revenue management, IT, etc. – has a clear understanding of the objectives for the property. As the owners’ representative for the property, the Asset Manager holds the property management team accountable to the business plan. The asset manager is responsible for continually reviewing the operational performance of the property and for making sure they are staffed appropriately and have the resources and attention necessary to maximize the performance of the asset.
A top-quality asset manager must be skilled in all aspects of real estate ownership. They are intimately involved in asset preservation and enhancement.
This requires a deep knowledge of maintenance repairs, recurring and nonrecurring capital improvements, marketing, and personnel management. They also require a thorough understanding of contracts. They work with our ancillary revenue team in identifying areas of opportunity for additional revenue streams in items such as laundry, vending, cable, and internet. These additional revenue streams impact the Net Operating Income (NOI) and drive value and returns to our investment partners. Additionally, negotiating skills are required to set up long-term contracts with the various vendors that enhance service to our residents and further improve our revenue streams. Finally, our Asset Managers understand the financing structure of each property and work with firm principals to determine appropriate refinancing strategies and hold/sell decisions.
Finally, asset managers work closely with our Investor Relations team to communicate ongoing performance to our investment partners.
In addition to performance reporting to our partners they communicate with our accounting team to manage property insurance, lender communications, and real estate tax management. Ensuring timely and clear communication across internal departments is a critical function of all Asset Managers.
In sum, the Asset Manager is the CEO of the partnership.
They are the investor’s eyes and ears on the property and are responsible for ensuring the asset is well managed, well maintained, and meets the investment objectives for returns. It requires a comprehensive understanding of the property, submarket, financing, and an ability to work across functional departments to ultimately maximize the value of the asset.