So You Want to Be an Asset Manager? IREM's Real Estate Asset Management Initiative Explores the Points of Connectivity between the Property Management and the Asset Management Professions, as Well as Ways to Help Individuals Working in Both Fields Collaborate More Effectively. This Exploration Draws upon Ongoing Contributions from Practitioners Representing Real Estate Investment and Service Firms in the United States

By Read, Dustin | Journal of Property Management, July-August 2017 | Go to article overview

So You Want to Be an Asset Manager? IREM's Real Estate Asset Management Initiative Explores the Points of Connectivity between the Property Management and the Asset Management Professions, as Well as Ways to Help Individuals Working in Both Fields Collaborate More Effectively. This Exploration Draws upon Ongoing Contributions from Practitioners Representing Real Estate Investment and Service Firms in the United States


Read, Dustin, Journal of Property Management


Recommendations for Property Managers Interested in Making the Move

IT IS NOT UNCOMMON FOR A PROPERTY MANAGER TO CONSIDER ASSET MANAGEMENT AS A VIABLE OPTION FOR PROFESSIONAL ADVANCEMENT. When is a property manager ready to make the move? What factors are likely to influence whether or not this move is successful? Both of these questions were explored in a research project recently completed on behalf of IREM involving a series of interviews conducted with asset managers and other real estate practitioners familiar with the asset management process. The results suggest some accomplished property managers can find their place in the asset management industry so long as they are adequately-prepared, appreciate the unique requirements of the job and consider the following recommendations.

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ADDRESS FINANCIAL ANALYSIS SKILL GAPS

The complexity of the financial analysis asset managers engage in varies significantly across real estate investment management firms, but it is nearly always a component of the job.

A lack of familiarity with finance concepts can therefore serve as a hurdle for property managers, as noted by an asset manager working for an owner-operator: "Property managers can see the trends on the ground, but to transition into asset management you have to learn how to evaluate properties through the numbers and understand the impact of every decision on value."

This requires a basic understanding of the time-value of money, the ability to work in spreadsheets and industry-relevant software packages, and the capacity to calculate returns on investment and payback periods for capital outlays. Developing the analytical skills needed to participate in such activities is usually one of the first steps towards a career in asset management for property managers who have previously devoted their time to operational tasks.

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CHOOSE THE RIGHT EMPLOYER

Fortunately, there are asset management departments that place a high value on the operational experience property managers bring to the table and are willing to help them develop complimentary financial analysis skills.

"We don't expect them to know all that much on the front end," said one director of asset management working for an insurance company. "They are hired and trained in valuation and analytics, while getting them out in the markets with the asset managers to get to know the people and the assets they will be working on."

Those interviewed encouraged aspiring asset managers to seek out firms that "offer training to property managers to help them better understand the impact of operational decisions On valuation" and those that allow property managers to "sit with asset managers on a deal-by-deal basis" to see how they approach their work. This type of on-the-job training was viewed as invaluable for property managers with an aptitude for financial analysis and a willingness to learn.

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SOLVE PROBLEMS, COMMUNICATE EFFECTIVELY AND ACT DECISIVELY

Financial acumen is undoubtedly important, but it is by no means the whole story. "You have to look at trends and make decisions," said an asset manager working for a private equity fund. "Asset managers have to be adaptable and have the ability to respond to challenges without referring to a model all of the time."

Another asset manager working for an owner-operator added: "The job is about converting data into information and communicating it to senior management."

These comments suggest financial analysis skills are not a substitute for the ability to solve problems, communicate ideas effectively and act decisively in the face of uncertainty. Good asset managers were described as those who "can think through creative solutions," and "identify improvements that translate into value."

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BUILD RELATIONSHIPS BY DEMONSTRATING A MASTERY OF PROPERTY MANAGEMENT FUNCTIONS

In many instances, property managers with the best prospects of transitioning into asset management are the ones who have already demonstrated an ability to move back and forth between analytical and operational tasks, thereby gaining the respect and trust of an existing client. …

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So You Want to Be an Asset Manager? IREM's Real Estate Asset Management Initiative Explores the Points of Connectivity between the Property Management and the Asset Management Professions, as Well as Ways to Help Individuals Working in Both Fields Collaborate More Effectively. This Exploration Draws upon Ongoing Contributions from Practitioners Representing Real Estate Investment and Service Firms in the United States
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