![]() Treating real estate as an asset yields tremendous insight into its quantitative values. Real estate asset management comes into focus It all depends on the tale of the data and the direction of the company. From there, portfolio performance can be a deciding factor in top-down decisions-such as the decision to expand to a new facility or the shift to permanent remote work and downsize facilities. Real estate asset managers use this data to generate reports and forecast models as a source of truth for those in the position to make decisions.Īs real estate asset managers do this for multiple properties, it paints a clear picture of portfolio performance. Lease tools, cost projections, accrued YTD costs, and countless other variables come together in a property-specific picture of real estate and its contribution to the company’s financial standings (and outlook). Today’s Enterprise Asset Management (EAM) and Integrated Workplace Management System (IWMS) software provide real-time insights to asset managers who need up-to-date information. To do this requires access to a real estate forecasting dashboard. Real estate asset managers need to take that data and contextualize it for portfolio managers, executives, and other stakeholders, so that they can make high-level decisions about broad real estate strategy. Quantifying real estate as an asset is only the first part of the job. Asset management breaks it down into costs and expenditures, revenue opportunities and risks, and other intrinsic values that benefit the company-and it does so in dollars and cents. ![]() Reducing expenditures: Can the company consolidate facilities and maintain revenue output? Are in-house or contracted maintenance services more cost-efficient? What lease negotiations will reduce monthly/annual costs? Cutting the bottom line is an efficient way to boost the performance of real estate as an asset.īeing mindful of real estate as an asset allows managers to tell a factual story of how a property contributes to the company.Risk management: What risks are inherent to facilities and how can companies manage them? What is the debt risk of property on the balance sheet? What liability and insurance costs accompany facilities? Managers who identify and mitigate risk improve the ROI of real estate.the revenue they generate? Are there ways to increase revenue through reinvestment in facilities? What is the total ROI on facilities over time? These questions and countless others are the focus of revenue-minded asset managers. Optimizing revenue: What is the cost of facilities vs.The core tenants of asset management are all about optimizing returns, minimizing risk, and reducing expense. Looking at real estate as an asset means shifting focus to managing it like an asset. Core tenants of real estate asset management their current market valuation? There’s no limit to the number of questions businesses can ask from an asset evaluation standpoint. Each answer matters in the scope of real estate asset management. How do facilities contribute to the company’s bottom line? What is the ROI on office space? What is the intrinsic value of facilities vs. Using this definition, often businesses choose to evaluate real estate as an asset. “ Assets are reported on a company’s balance sheet and are bought or created to increase a firm’s value or benefit the firm’s operations.” The simplest definition of an asset is “ anything of value or a resource of value that can be converted into cash.” From a business standpoint, the definition becomes more specific. To understand real estate as an asset, it’s best to define what an asset is. ![]() ![]() In the same way companies monitor the performance of employees or departments and their contribution to success, real estate asset managers develop the criteria for real estate return on investment. The role of a real estate asset manager is to maximize the value and return on property from an investment standpoint. But what is real estate asset management, really? What does it mean to treat real estate like an asset vs. ![]() It’s because real estate is an asset that companies can optimize and leverage into broader goals. Many enterprise companies employ a team of professionals to manage their real estate portfolios. ![]()
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