Stage VIII: Property, Asset and Portfolio Management Reading: RE Development, Principles and Process. (Chapter 21)

Stage VIII Property, Asset and Portfolio Management – Value of project is derived from long-term viability: over the entire property life cycle >>> usage (occupancy); renovations and disposition/demolition – Delivers the envisioned cash flows and long-term profitability – This stage works to increase value through leasing and managing the product – This stage of the development process should be thought about and planned from Stage I 2 Stage VIII: Property, Asset and Portfolio Management

Outline i.Enterprise concept ii.The Real Estate Management Triad iii.Transition from development to management iv.Property Management in Ghana 3 Stage VIII: Property, Asset and Portfolio Management

Enterprise concept Concerned with Real Estate industry as a dynamic business >>> competing in a dynamic market Need to redefine market niche and product >>> reinvent to remain viable How will this work, given that a real estate development is fixed in location? How will this work, given that it is a capital intensive venture? 4 Stage VIII: Property, Asset and Portfolio Management

The Real Estate Management Triad 5 Stage VIII: Property, Asset and Portfolio Management Portfolio Manager Capital Improvement Asset Manager Property Manager Manage multiple properties Monitor properties performance Acquisitions/ Dispositions Manages property Day to day operations Separate but interrelated roles >>> some cases executed by one person

Roles of Portfolio Managers and some members of the Portfolio Management Team Manager’s Role -Communicate with investors -Set portfolio goals and investment criteria -Define and implement portfolio investment strategy -Oversee acquisitions dispositions, asset management, reinvestment decisions -Accountable for portfolio performance -Client reporting and cash mgmt Team Members The Portfolio Manager Economists and research professionals Acquisition professionals Disposition professionals Stage VIII: Property, Asset and Portfolio Management 6

Roles of Asset Manager and some Members of the Asset Management Team Manager’s Role Develop property strategic plan Analyze hold/sell decision and Reposition Property Justify major capital expenditures Monitor property performance Evaluate property manager with peers Assist in Tenant Relations Team Members Asset Manager The Controller The Risk Manager The Financial Analyst Stage VIII: Property, Asset and Portfolio Management 7

Roles of Property Managers and some Property Management Team members Manager’s Roles Tenant relation and retention Rent Collection Manage Operating Expenses Financial Reporting/Record Keeping Maintenance Plans Capital Expenditure Crisis Management Security Issues Public Relations Team Members Senior Property Manager Assistant Property Manager Lease Administrator Chief Engineer Construction Manager Director of Security Project Accountant Concierge Leasing team Marketing Director/ Manager Stage VIII: Property, Asset and Portfolio Management 8

The Real Estate Management Triad 9 Stage VIII: Property, Asset and Portfolio Management OFFICESAPARTMENTS PM PTM INVESTOR Asset Manager PM Asset Manager

Transition from development to management >> Some fundamentals Input from this team should commence early in the development project How and why? Manage project appropriately across entire life cycle (Fig 21-3 Pg 518) Development period is shortest period in the life of a product hence attention should be paid to other periods especially stabilization period Strategy is key in maximizing profits ( Fig 21-4 Pg 519 ) 10 Stage VIII: Property, Asset and Portfolio Management

Transition from development to management >> Some fundamentals Transferring completed development to Asset Manager require a “Transfer Package” which should cover: – Status report plus any outstanding issues – Comparison of actual results and pro-forma – Value of project and assumptions made – Total cost of development and profit as forecasted AM should carry out a project SWOT which will inform strategic planning and implementation of plan Property strategic management process: Fig 21-5 Pg 521 Stage VIII: Property, Asset and Portfolio Management 11

Property Management in Ghana “Baby industry” as individuals and corporate have managed properties and assets in-house in the past Some companies in Ghana: – Broll Ghana – UT Properties – Pace Property Managers Major challenges: – Industry not regulated – Treated as an allied profession – Etc Stage VIII: Property, Asset and Portfolio Management