1 Welcome to the International Right of Way Association’s Course 703 Real Property Asset Management 703-PT – Revision 2 – INT

2 Introductions Who we are… What we do… Where we do it… How long we’ve been doing it… Our goals for the course...

3 Objectives (1) At the conclusion of the course, you will be able to… Define and understand the differences between property and asset management Express an understanding of the goals of asset management

4 Objectives (2) At the conclusion of the course, you will be able to… Identify the needs and prerequisites of a successful asset management program Develop and implement an asset management program

5 Housekeeping

6 Schedule (1) 8:00 - 8:30 Introductions, Etc. 8:30 - 9:15 Definitions and Needs 9: :15Key elements of an Asset Management Plan 10: :15 Developing an Integrated Asset Management Plan 11: :15Foundations of an Integrated Asset Management Plan

7 Schedule (2) 1:15 - 1:45 Portfolio Management 1:45 - 2:30 Determining Needs and Setting Priorities 2:45 - 3:15 Developing the Asset Management Plan 3:15 - 3:45 Measuring Success 3:45 - 4:00 Summary and Review 4:00 - 5:00 Exam

8 Terms (1) Property Management is a process of maintaining and creating value in real property, which is consistent with the owner’s objectives. Asset Management is the comprehensive integrated management plan for all real estate assets. It is the optimization of assets to produce the most productive use.

9 Asset Management Asset management is… Mission driven System oriented Long-term in outlook Customer focused

10 Terms (2) An integrated asset management plan is a structured process that brings all (assets) parts together into a whole.

11 Terms (3) Asset rationalization is the process of determining the need for a given asset and the role that asset will play in an organization.

12 Asset Management Plan Goals (1) Assist in meeting expectations, goals and targets related to core business activities.

13 Core Businesses (1)

14 Core Businesses (2)

15 Core Businesses (3)

16 Core Businesses (4)

17 Asset Management Plan Goals (2) Assist in meeting expectations, goals and targets related to core business activities Ensure performance at optimum levels Improve operational capacity Increase occupancy and reduce expenses

18 Asset Management Plan Goals (3) Increase revenues Enhance asset value Provide flexibility Increase social or community benefits

19 Terms (4) A portfolio is the collection of like assets.

20 Key Elements (1) Core business Table of organization Accountability

21 Key Elements (2) Real estate’s role Communications plan Teamwork Directions and goals

22 Prerequisites Commitment Proper placement Performance measures

23 Ingredients (1) Inventory Needs assessment Clear priorities Accountability footprint

24 Ingredients (2) Schedule Plan review Multiple layers

25 Terms (5) An integrated asset management plan is a structured process that brings all (assets) parts together into a whole. Asset rationalization is the process of determining the need for a given asset and the role that asset will play in an organization. A portfolio is the collection of like assets.

26 Terms (6) A property inventory is a database of the organization’s properties with specific information on each parcel.

27 Inventory Classifications Operating property (present use) Future use Surplus Other

28 Criteria (1) User friendly and simple Compatible Meaningful cross-references Searchable Increase efficiency

29 Criteria (2) Reduce response time Hard copies Protect original documents Off-site storage Growth Cost effective

30 Another Inventory Classification (1) Core business uses Core business related uses

31 Terms (7) Secondary use is organizational acquired property that allows for others to also use, provided that there are no conflicts with the primary use. Secondary use is two or more organizations using jointly acquired property, which provides for shared costs and responsibilities.

32 Another Inventory Classification (2) Core business uses Core business related uses Potential future core business uses Transitional No potential future core business uses

33 Terms (8) Stranded assets are real estate assets with no potential future core business uses.

34 Another Inventory Classification (3) Core business uses Core business related uses Potential future core business uses Transitionals No potential future core business use

35 Terms (9) A needs assessment is a systematic exploration of the way “things” are and the way they should be. Usually, these “things” are associated with organizational performance.

36 Terms (10) A feasibility study is a preliminary study undertaken before a project starts to ascertain the likelihood of the project’s success, in terms of investor objectives. A financial analysis is an assessment of the viability, stability and profitability of a project.

37 Terms (11) Hurdle or discount rate is an interest rate to convert future payments into present value. Net present value is the difference between the present value of all the positive cash flows and the present value of all the negative cash flows. Internal rate of return is the rate that discounts future cash flows to the amount of the original investment.

38 Objectives (1) At the conclusion of the course, you will be able to… Define and understand the differences between property and asset management Express an understanding of the goals of asset management

39 Objectives (2) At the conclusion of the course, you will be able to… Identify the needs and prerequisites of a successful asset management program Develop and implement an asset management program

40 Thank you! 703-PT – Revision 2 – INT