Insights

CRE Asset Management Best Practices: Facing Today’s Unique Challenges Head-On

Thirty Capital recently attended the IMN Mid-Market Multifamily conference in Phoenix, Arizona. During the conference, Thirty Capital Founder and CEO Rob Finlay spoke on a panel titled Asset Management Best Practices. 

 

Today, asset managers are gearing up to face unique challenges that are anticipated to continue into the coming years. This session highlighted current shifts in asset management and the need for asset managers to elevate their skillsets, with a specific focus on capital market dynamics, investor relations, and cashflow/budgeting.

Read ahead for our key takeaways from the discussion.

 

Asset Management Is Evolving

Over the past decade, asset managers were focused on acquisitions. Today, that narrative is shifting. The consensus during the panel was clear – when it comes to asset managers, “it’s their time to shine.” Asset managers are now being called on to tackle new responsibilities in their roles and face these unique challenges head-on. These requests include finding opportunities to reduce expenses, budgeting in an uncertain market, and communicating with worried investors.

 

Asset Managers Focus Areas Are Shifting

Cashflow Management

Cashflow management emerged as a central theme at the conference. The panelists explored how to navigate uncertainties such as fluctuating interest rates, delinquency concerns, and expense inflation. 

 

Market Positioning

Amongst the panelists, the importance of understanding not only your property but also its place in the broader market was emphasized. Asset managers were urged to analyze their property’s standing relative to the competitive set, delving into submarkets and neighborhoods. As part of this, attendees were encouraged to grasp the bigger picture, considering the economic and market trends that might impact their portfolios and potential effects of these trends.

 

Organic Rent Growth

With organic rent growth declining and property rehabilitation costs skyrocketing, asset managers are seeking alternative options to drive rents. The panelists agreed that expense reduction, energy efficiencies, and technology innovation are all key pillars for boosting rent growth:

  • Expense Reduction

The panelists explored innovative approaches to streamline operations and cut unnecessary costs, ensuring financial resilience in the face of uncertainty.

  • Energy Efficiencies

A key highlight was the exploration of energy-efficient practices. The panelists discussed sustainable solutions that not only contribute to environmental responsibility but also offer cost-saving benefits in the long run.

  • Tech Innovation

Technology for asset management was also discussed. The panelists agreed that asset management software, like Lobby CRE, can provide valuable insights into optimizing operations, enhancing tenant experiences, and improving overall portfolio performance.

 

Overall, the panel discussion served as a reminder that asset managers must revitalize their approach to cashflow management and budgeting, market positioning, and organic rent growth as the market changes. With a renewed focus, they are better equipped to face the challenges ahead. 

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