How Real Estate Asset Management Works
A commercial real estate asset management company requires experienced individuals who can optimize the value of properties and portfolios through exceptional transaction and management execution. ReDev Properties has locations all over Canada, such as Saskatchewan, and has purchased and managed over 30 commercial real estate properties since 2001. Keep reading to learn more about ReDev Properties’ approach to real estate asset management.
How it Works
The real estate asset management process is led by specialists who deal with different property levels; these specialists execute property-level strategies and add value to fund managers. These specialists are experts in either specific property types or regional market fundamentals; they are also responsible for maximizing the value of the assets in their custody. In addition to providing portfolio management information on local prospects and facilitating transactions, the asset manager is responsible for property-level performance.
Another job that real estate asset managers are responsible for is budgeting and fulfilling expense management. Asset managers work to increase the value of a property by overseeing the leasing of one or several properties. While leasing might seem like a simple task, it is actually a complex and intricate business that essentially determines the portfolio and the property’s value.
Real Estate Asset Management through Leasing
Successfully increasing the value of a property through leasing is obtained by looking for the highest possible leasing opportunities at each property and executing them; it is also done by organizing and operating a leasing program that works with the portfolio strategy and maintaining great relationships with each property’s tenants.
Leasing is often an intensely negotiated process, which requires making decisions that may not necessarily align with the needs of the tenants in order to maximize the property value. For instance, if a property is lined up to be sold, leasing could potentially be suspended during the sales period, and allow the new owners to factor higher potential leasing rates. This can potentially lead to increased predicted property values, and in turn higher sales offers.
During increasing rental rates periods, long-term leases can be locked in for income-oriented properties; lease terms can be decreased capital appreciation focused strategies to take advantage of higher rates expected later on in the future. The asset manager must be able to achieve the relevant tenant mix, execute leasing strategies that coordinate the portfolio’s needs with proper cash flows, and manage both operating and capital expenses can great impact the overall portfolio value.