Let’s talk AM
AM, the red headed step child of CRE investing. I used to hop on the train of low brow comments: saying that this role was lesser than. But I found it to be incredibly interesting and imperative for business plan execution. It seems like a really great opportunity to learn what real CRE investing and ownership is all about.
So, I’ve decided to pursue this as a career opportunity post b-school. That being said, I know the fundamentals pretty well as I’ve been in the business, but am ignorant when it comes to one thing - reporting. Can someone with experience help me with the exact in’s and out’s of this function. Happy to chat general AM as well.
Based on the most helpful WSO content, Asset Management (AM) in Commercial Real Estate (CRE) is indeed a critical function that often gets overlooked but plays a pivotal role in executing business plans and driving value creation. Reporting, as part of AM, is a key responsibility and can vary depending on the firm and asset type. Here's a breakdown of the reporting function and general AM insights:
Reporting in Asset Management
Performance Metrics:
Investor Reporting:
Compliance and Covenants:
Capital Expenditure (CapEx) Tracking:
Market Analysis:
Internal Communication:
General Asset Management Insights
If you're diving into AM post-business school, focusing on mastering reporting and understanding its strategic importance will set you apart. It’s not just about crunching numbers but also about telling the story behind the data to drive decisions and create value.
Asset management varies wildly by firm, and sometimes, asset class. For example, AM at an LP will be broader strokes, likely less travel, and more reporting. At an operator it could be the opposite - involved in the nitty gritty of operations with your property manager. Do you have a specific asset class you are targeting?
Industrial
Presume at an operator? If so, it’ll be less about getting your hands dirty in day-to-day operational work and more about negotiating leases, understanding tenant needs/if your product is becoming obsolete, and likely a very large number of properties in your assigned portfolio. I presume there’s also a lot of reporting as you roll up cash flows and work on distributions. Most Industrial deals are less complex than the other major food groups, and there’s less blocking & tackling operationally (like there is with Multi & Hotels)
Thanks for the response. I pretty much understand the function and main gist. I’d just really like to know more about the reporting and budgeting aspect of the role specifically as this is the only part missing from my background.
The level of reporting required will depend on the firm. If they have in-house accounting and their portfolio management team acts more like an investor reporting function (rather than making discretionary fund decisions), you’ll likely have less of a role in reporting. But any reporting will be excel heavy and likely some narrative writing on variances.
Budgeting should be seasonal, usually in fall. You’ll work in tandem with your property management. I work in multi and this is the “busy season” for our asset managers, but is likely much simpler for less operational heavy asset classes like industrial. But will include getting bids for any contract services, understanding your lease increases, tenant rollovers, and rebills for the next year.
Could you talk about Asset Management at a renewable energy (wind/solar) company? Going to intern there this summer and I'm still not completely sure how everything works at the Associate/Director/MD levels. Also would like your insight on comp/exit ops/WLB please.
Bumping this. Even in today’s political environment, tenants and investors are demanding sustainable sbuildings.
That’s a completely different industry, so can’t give you any insight
soak it in and be earnest without being annoying.
Red headed step child? Excuse me sir AM is front office.
Year 3 Associates at Bellwether are making 250k+ in Los Angeles. That's more than Ares and Brookfield. Top of the street.
Every time we hire for an acq associate at our middle market shop that pays low, we get multiple resumes from them that can't wait to get out. Sure, great stepping stone but don' think many people there are clamoring to make their career out of it. Might actually be one of the lease fulfilling AM roles out there since you're just a 3rd party AM for another company's portfolio
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