You are an Investor into German real estate? You are looking to mandate an external Real Estate Asset Management Company in Germany? Here is the how-to:
Beauty contests are snapshots and dependent on individuals performance. Of course, the Managing Director of a respective Asset Management firm can have a good or a bad day. He can be good or bad in spoken English at that time. But what you really need as an investor is „reliability“ and „continuity“. Can you get that information based on a powerpoint presentation and 2-3 meetings?
Both reliability and continuity depend heavily on the amount of work an asset management firm currently has. Lots of mandates mean lots of attractiveness to good real estate asset managers and a good company climate. Everybody is fired up and buyers and potential tenants, as well as brokers and other market participants, are keen to work with the firm. They have a business!
But – a multi-account Asset Manager is also known for „low hanging fruit“-treatments. At the beginning of a portfolio lifetime, business is easy. Good assets will be marketed towards tenants and buyers – the real estate brokers are all there to support and earn their commission.
Everybody is busy to write good quality reports.
1-2 years later (business plan no. 2) – the picture changes dramatically. In German asset management companies, the fluctuation within the companies in the last 4-8 years hit highest levels. Lots of asset managers chose to leave the business because of a weak market.
As of March 2015, the market in Germany picked up again – it was getting exciting again, Germany was and is still the safe haven for European real estate investments. Anglo-Saxon and Asian capital is looking to be invested in the German commercial real estate market. Many of these investors are first-time movers, some are coming back after investing between 2004 and 2008. Both investor-types don’t have reliable sources (anymore) to help find and manage the external asset managers or to build up a new platform.
Depending on the accuracy of the business plan and its set up, „portfolio-tails“ will be identified upfront – at the best knowledge during underwriting. As the work on the portfolio and business plan progresses, these „tails“ are getting bigger and they change due to new information. The good assets are getting sold and resolved quickly.
With the typical fluctuation within the real estate asset managers and other factors (like the „new toy“-syndrome), the portfolio is not getting the same attention anymore. Apparently, investors look for a new asset management firm after 3 years or try to refinance the portfolio or even to sell parts of the remainders.
Here is where BHPERE´s (Boris Hardi Private Equity Real Estate Consulting) Soluvend™ method is the right steering tool for you.
- We change the spirit
- redefine tasks
- find the right asset management and fight for your IRR.
The longer you own the portfolio – the less cash flow you have – the lower your resulting IRR will be.
We believe that this needs to be done from the inside – as part of your team – interim and with a clear, quantifiable task.
We look forward to meeting you and further explain our approach and analyze your situation.