Acquiring the property is not the end of the process. It marks the beginning of executing the business plan and monitoring the investment over the hold period. Asset management keeps us focused on how the property is performing, while ongoing investor reporting keeps our capital partners informed about that performance, the progress of the business plan, and material developments along the way.
Investors receive ongoing updates regarding the property and the progress of the business plan. Depending on the investment, reporting may include financial performance, occupancy, renovation progress, property-management activity, key performance indicators, distributions when applicable, and material developments affecting the investment. Tax reporting, including K1’s are also provided for the investment.
Reporting isn’t only about showing investors where the property stands. It should also provide context when actual performance differs from what was originally anticipated.
Asset management is the ongoing oversight of the property and execution of the business plan after acquisition. That includes reviewing financial and operating performance, monitoring renovations and capital improvements, working with property management, tracking occupancy and collections, reviewing expenses, and identifying issues that require attention.
The business plan provides the roadmap, but actual property performance tells us where attention may be needed along the way.
Not every part of a business plan unfolds exactly as anticipated. That possibility is considered before the property is acquired. For example, construction and renovation budgets may include a contingency, often in the range of 10% to 20% to help account for potential cost overruns and unexpected conditions. The appropriate contingency depends on the property and scope of work.
Even with that preparation, circumstances can change. When they do, we determine the impact on the property and business plan and consider the appropriate response, which may involve property management, contractors, lenders, attorneys, or other specialists.
Investors should also be informed about material developments, how they may affect the investment, and the steps being taken in response.
