Real estate asset management is a job that has taken shape over the past few decades as distinctly separate from property management.
Property managers run a property day to day and make sure that the value of the property is maintained, whereas Real estate asset managers treat property as an investment. The work that Ringley do alongside Institutional Investors and Fund Managers aims to maximise returns on the investment and the value of the assets. This requires a head for numbers and a commercial outlook combined with entrepreneurial thinking versus the strictly operational focus of a property manager. An asset manager is all about how to sweat an asset to add value.
Tasks of asset managers are very different from the day-to-day lives of property managers.
- Asset managers determine the investment strategy, what to buy, sell and hold, at what price and what returns are required for the owner.
- If a property is to be acquired or sold, they perform the due diligence work and make recommendations. They negotiate on behalf of the owner.
- They determine the required amount of leverage, find a bank and work with lenders.
- They establish the value of each asset and come up with ideas how to increase the value.
- They prepare long-term forecasts of the finances, perform cashflow analysis and work out the rate of return.
- They carry out market research, analyse data and market assets with the aim of increasing revenue.
There is dependency between the two roles – for an asset manager to maximise the value, the property must be well managed day to day, have healthy finances and be appropriately maintained. Healthy finances require expertise in creating budgets and controlling cashflow. This is an area where the two roles overlap as either property or asset managers might be dealing with this responsibility.