An asset manager plays a critical role in making a real estate investment successful.
Their responsibility is to look at each property through the eyes of its owners and drive profitability while making strategic decisions and steering the operators in order to meet the owners’ objectives.
Asset Managers in our company are intrinsically tied to each property we acquire from the very beginning.
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. Having helped shape the business plan for the property, the Asset Manager then executes.
Property business plans are created and are provided to our operations team to be implemented.
They 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 or IT, etc. – have a clear understanding of the objectives for the property. As the owners’ representative for the property holds the management team accountable to the business plan.
Asset managers are always communicating with the operations team at various levels to ensure the objectives of the Investment Business Plan are being met.
They also determine and implement course corrections if needed. It is important to periodically review the return expectations with the operations leadership team and assist them in meeting return requirements by helping with budget preparation and review and analyzing the operations and budget variances.
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 the Finance & Acquisitions department 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.
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 critical for 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 is responsible for ensuring the asset is well managed, well maintained, and meets the investment objectives for returns. It requires a global understanding of the property, the markets, financing, and then working in concert with all of the various departments involved in achieving the business plan results.
