In a real estate down-cycle our asset valuation focus changes. The heyday of strong cap rates, rental rate growth and high transactions volumes caused asset managers to focus on high return through asset appreciation. Capital projects soared, borrowing soared, and valuations soared with them. It seemed like there was no ceiling to real estate values. The environment that created those boom times is not likely to return soon, but owners and managers still need to focus on increasing asset value.
Now that we’ve come back down to earth, the focus has moved inwards from transaction volumes to operations management. No one internal operating factor can make the kind of valuation impact that a positive transaction can make. However, litany of operating factors which might otherwise have little impact, when taken together can generate strong operating returns over the long term. Consider the operating levers that drive down costs and increase such as improved energy management; more effective preventive maintenance, improved staffing management, reduced risk and liability, and capturing more billable revenue.
To successfully manage your portfolio during this downturn, building owner and managers need to capture building activity data to assess how their buildings are performing and identify which performance influencing factors can and should be changed. Real estate managers must question their assumptions and embrace the tools and techniques necessary to stabilize, strengthen and then grow net operating income. One of those tools is a Web Based Operations Management system (“WBOM”).
To read more about better, more efficient means of operation request a white paper at the following resource location: Operational Efficiency