Choosing the Right Service Provider for CRE Asset Management: What to Look For

Choosing the most suitable CRE asset management service provider is crucial to the long-term success and profitability of your real estate investments.

Right now, commercial real estate (CRE) could be looking at a rebound after several years of limited growth, heightened inflation, pullbacks in spending, and general uncertainty, and many businesses are on the lookout for investment opportunities.

CRE asset management can be as important as your investments themselves, as it influences the profitability and value of your portfolio or asset. Whether you manage a vast portfolio or own a single property, the right partner can help you shape your investment strategy, maximize returns, minimize risks, and streamline your operations.

Numerous service providers offer different levels of expertise, technology, and resources, and selecting the best fit for your requirements can be a challenging task. In this article, we explore the key factors to consider when choosing a service provider for CRE asset management. We hope you find them useful as you continue your strategic planning for this year.

CRE Asset Management: Key Factors to Consider When Choosing a Service Provider

By considering the key factors identified below, you can gain enhanced ROI from your assets, avoid expensive errors, and help ensure that your business goals are met within a reasonable timeframe. Having said that, it is essential to supplement these factors with your own due diligence and research.

Industry Experience

Industry experience is arguably the most important factor when selecting a service provider. Asset management processes and the technology needed to support them can be shaped by the unique requirements of the CRE industry, including regulatory requirements.

For example, an Enterprise Asset Management (EAM) implementation would require an understanding of local building codes, safety regulations, and sustainability standards, such as Leadership in Energy and Environmental Design (LEED) certification, to ensure compliance and optimize asset performance.

Look for providers with a track record of successfully managing assets similar to yours – whether they are office buildings, retail centers, industrial properties, or mixed-use developments.

A service provider with years of experience will be likely to have encountered a wide variety of challenges and will be better equipped to handle unforeseen issues. Furthermore, experienced CRE asset management companies can provide valuable insights into market trends, emerging opportunities, and risks that less experienced providers might overlook.

Range and Focus of Services

Many CRE asset management companies offer a diverse range of services such as lease set-up and updates, periodic reporting, financial analysis, AR/AP management, and development. Providers that offer such a suite can streamline your operations, creating efficiencies and reducing the need to hire multiple vendors.

However, it is important to determine whether you need a more generalist provider or a specialized firm. For example, if you need assistance with day-to-day property operations such as tenant management, rent collection, and maintenance, a provider that specializes in property management might be a good fit.

Process Expertise

CRE asset management involves more than just managing properties – it includes optimizing operations, enhancing tenant satisfaction, and ensuring regulatory compliance. Service providers with process expertise can help your organization identify best practices and effectively implement them.

In CRE, where tenant relationships, building maintenance, and lease management are core to operational success, process expertise is especially important.

If your asset management project involves re-engineering existing processes – such as optimizing property maintenance workflows or improving tenant engagement – it is vital to choose a service provider with deep process expertise. This will ensure that your project does not just deliver a new system but also aligns with your long-term strategic goals and operational efficiency.

Technology and Tools

Most modern CRE asset management projects go beyond core functionalities to incorporate technologies like IoT and cloud solutions. As these technologies evolve, service providers are often climbing the same learning curve as their clients.

These technologies can offer critical benefits, such as real-time data from IoT devices to monitor building performance and cloud solutions for easier access to property data. However, because these areas change rapidly, it is increasingly important to understand the kind of experience that a service provider possesses, particularly for new projects.

A provider who stays up to date with trends such as IoT integration and data analytics will be better equipped to offer innovative, future-proof solutions that support your asset management strategy.

Furthermore, a provider that uses relevant advanced tools is more likely to deliver better outcomes. Hence, when evaluating potential service providers, ask about the technology they use to manage assets.

For example, do they have a robust property management system (PMS) or asset management software that allows for tracking of key performance metrics, seamless communication, and easy access to financial statements?

Knowledge of the Local Market

The service provider’s local market knowledge is an essential factor, especially if you are investing in a specific geographic area.

A provider with strong local market expertise will have a better comprehension of market trends, zoning regulations, tenant preferences, and potential growth areas. They will also be better equipped to navigate the legal and regulatory landscape, ensuring that your assets remain compliant with local laws.

Communication and Responsiveness

Your service provider should be responsive and communicative, keeping you updated on your asset’s performance and any potential issues. Regular meetings, reports, and updates will help you stay informed and make better decisions regarding your portfolio.

Reputation

Seek out service providers with positive reviews and testimonials from other clients. Conducting thorough due diligence can help you assess the provider’s past performance, reliability, and client satisfaction.

One of the best ways to evaluate a provider’s reputation is by speaking directly with other investors or property owners who have worked with the provider. These references can give you insight into the provider’s work ethic, communication style, and ability to meet deadlines.

Conclusion

By considering the key factors to bear in mind when choosing a service provider for commercial real estate, you can make an informed decision that aligns with your investment goals.

Asset management involves a long-term partnership, and finding the right provider is about more than just cost. It is about building a relationship with a team that can help you maximize the value of your assets and navigate the complexities of the CRE market.

Silverskills provides CRE asset management services that help you meet all your stakeholder requirements. Benefit from the market intelligence and deep domain experience of our team. Our key services include active portfolio management, lease management, and deal optimization. Contact us now to enhance your assets’ ROI.