What does an Asset Manager do for me?

The role an Asset Manager plays is to direct, monitor, supervise and evaluate the various service providers (property manager, property staff, leasing personnel, landscaping vendor, service contractors, etc.) as well as to handle investor reporting and communication. The Asset Manager is the owner’s advocate.

Does my property really need an Asset Manager?

An asset manager is generally viewed as being very important for the efficient operation of commercial real estate. An asset manager should act as a staunch advocate for the owners of the asset by pushing for tight expense controls, active property management and aggressive leasing.

I already have a Property Management firm, what more do I need?

Experienced real estate investors will tell you that property managers must be actively supervised by credible and experienced personnel in order to maximize property value. Property management firms are, according to a Regional President of CB Richard Ellis, “only as good as the owners require us to be”. The practical impact of that reality is that your property is likely to receive less attention and focus unless you have an active and aggressive advocate on the job representing your interests….and that is what an Asset Manager is supposed to be doing.

Where does the Asset Manager add value?

There are literally hundreds of decisions that impact a property’s financial performance. Some of the
areas where a good Asset Manager can have the biggest impact are:

Strategic Planning
asset managers are essential in making certain that the property has an appropriate strategic plan to maximize both income and long term value as well as monitoring the tactics required to achieve the plan’s objectives.

Tenant Selection
all tenants are not created equal. To determine the proper tenant mix (exposure to certain industries, credit quality, etc.) and evaluate the quality of a specific tenant requires market knowledge.

Lease Negotiation and Review
your property income and value are directly tied to the strength of the leases you sign. Knowledge of the specific market, contract norms and owner priorities are essential to maximize value.

Tenant Improvements
construction expenses continue to rise and a good asset manager will diligently ‘value-engineer’ space plans and buildout specs to assure dollars are not wasted. Tenant improvements are often the single largest expense in a property’s budget and a 10% savings can mean tens of thousands drop to the bottom line.

Operating Expenses
daily operations must be actively managed. Experienced owners will tell you that property managers are prone to write checks (with your money) to make problems go away quickly. Often the tenant is responsible for the expenses and property managers ‘keep the peace’ by failing to carefully enforce the tenants’ responsibilities per their leases. This common situation can easily impact the bottom line to the tune of tens of thousands of dollars.

Vendor Selection
proper procedures for competitive bidding among vendors is essential to achieve the best pricing and service. Property managers have a tendency to stick with the same vendors unless they are monitored and this can cost the owners thousands more.

Capital Expenses
timing of replacement for HVAC systems, elevator maintenance, parking lot maintenance and the like have an enormous impact on the financial performance of the property. Property managers are known to make the ‘easy’ decision to replace systems sooner than necessary in an effort to minimize the ‘hassle factor’ for themselves. Active asset management can make a tremendous impact by pushing for repairs and aggressive maintenance rather than replacement and carefully evaluating each decision.

These TIC properties are somewhat complex, how does an Asset Manager help?

A.

An Asset Manager handles all aspects of the property’s operations on behalf of the TIC owners. This relieves the TICS from most routine decision-making responsibilities. An Asset Manager also helps preserve the ‘passive’ status of the TIC investors’ involvement which can be important in preserving a tax deferred 1031 exchange.

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