Do You Know Your Portfolio Denominator?
Managing real estate portfolios has, like almost everything else lately, become harder than ever.
Changing work environments, employer and employee preferences, capital and real estate markets, fluid portfolio requirements, all with their respective high amount of data flow to say all these pressing aspects make your job challenging is an understatement. Couple that with the need to integrate this data into a single cohesive resource creates heroes out of all of us.
Defining your "Portfolio Denominator"
It is impossible to define your "Portfolio Denominator" unless you have a firm grasp of all of your portfolio data points, key metrics, and their correlation to define success and failure. It is also impossible to identify your improvements to portfolio performance until you have this critical baseline. Real estate portfolio managers have all of they key data needed at their disposal. However, this data is most likely in different silos using distinct applications. HR, real estate, finance, capital, sales, capital expenditures, location analytics, and competitor data all factor into a sound strategic plan yet are housed separately.
You cannot be efficient or successful in illustrating the value you and your department contribute to your company unless you know the denominator of metrics as the baseline of comparison. This denominator of data is not simply lease terms, costs, dates, capital stacks, equity, debt and other schedules. It is every aspect of the data that factors into your business being successful. Can you report on ALL of the factors and measurements that could impact your locations? Do you have the "math" to underwrite your perspectives?
After thirty years of global portfolio experience, we continuously see a high amount of talented real estate managers who could not successfully provide analytics of the value they added to their organization. If you do the work, what good is it if you can't show the positive changes you have created. Know your baseline, compare future years against the baseline. Demonstrate your expertise and value.
There are tools and professionals that can help.
With the tools and applications available today, you can integrate all of this data into a single solution. The absolute power of an integrated solution will increase your returns, reduce costs, and improve your career trajectory. This includes your ability to reduce your management and reporting times, provide key real time performance measurements to your superiors, and quickly and easily define actions that will improve your portfolio performance.
This allows you to enable your business success, make you more money, saves you costs, and make you a hero in your organization.
Even though portfolio solutions have been provided by the service industry for over 30 years, many corporate occupiers and sponsors still manage their portfolio data in excel, weak lease administration systems or other non-institutional type tools. In most cases these integrated applications can upload and install your data and preferences and have you up and running in less than a week.
Math and Correlations
Finding correlations in your portfolio to achieve your objectives is both math and art. But you need the math first. The "art" comes from experience in seeing and understanding how the math creates correlations between your many different real estate and business factors. Does the location scorecard reflect profits? Are the revenues and gross profits created at a location above or below the portfolio average, based on SF, FTE, unit sales, door swings, or other metrics? Are lower rated locations due to management, operations, location, workforce issues, or other reasons? Other than the obvious, why are some locations successful and some failures.
First you need to easily define your baseline, the denominator, and then you can work to use this data and output to improve.
Real Clear Software's commercial and cloud based real estate management software offers many advantages over excel spreadsheets and standard lease administration programs. RCS integrates portfolio, transaction and document management, project management, data security, performance measurement, data analysis & comparison, real time data access, stakeholder collaboration, CRM, demographics, and generation of various reports. For more information on RCS Portfolio from Real Clear Software, visit https://realclear.software, email firstname.lastname@example.org, or phone (949) 445-6220.