Real Estate
Asset Management

Table of Contents

What is Real Estate Asset Management?

Asset management generally means the management of tangible or intangible, financial or non-financial assets. Every investor has various investment alternatives at his or her disposal, such as the traditional savings book or shares. In addition to securities, real estate also counts as an investment asset. And it is precisely this area that is considered here. Asset Management – Real Estate, also called Real-Estate Asset Management (REAM).

Asset management – real estate deals with targeted measures to increase the value of a property or an entire property portfolio. This roughly means the active planning, management, implementation and control of a property. In short, the focus is on managing real estate assets. The aim is to increase the value of the property from ongoing management and to achieve the optimum of the capital employed.

There are various approaches to support asset management and thus achieve maximum profit. It is possible to carry out a digital survey of new buildings as well as existing properties. Recorded photos and videos are processed into a 3D model with a 360 degree perspective. This virtual representation of a building shows the current status and can be used for many purposes. It can also be expanded to create a BIM model or digital twin. With these tools, the digital and efficient management of real estate is optimally feasible.

The Levels of Real Estate Management

Real estate management consists of several management levels that describe the activities that are carried out for a property.

At the first level, the investment / corporate level (real estate investment management), overarching goals, values and standards are defined. These provide a framework, set guidelines for the investment policy of the real estate. Typical tasks in this area are the procurement of information for investment decisions, as well as the creation of a strategy in coordination with the investor.

The next level, portfolio management, also known as real estate portfolio management, arises from the specifications of investment management. The aim of the portfolio strategy is to build up or maintain success by systematically structuring the portfolio. Accordingly, the implementation of the investment management is organized and controlled. In order to realize this, the following real estate asset management is required.

Real estate asset management acts in accordance with the specifications of portfolio management and is classified at the strategic property level. Accordingly, strategies for existing or potential properties are developed at this level and are used during the management phase. It is the interface of the conception and utilization phase, with the goal of successfully implementing the defined specifications.

The last level of real estate management is the property level. Here, the property strategies are translated into concrete measures to achieve the goals. This includes the control and management of the property and facility manager.

The digital twin is a helpful tool at every level of real estate management. The digital survey carried out beforehand is supportive in order to make investment decisions more easily. A portfolio strategy is also easier to implement, as the property can be inspected at any time from a terminal device. It is also possible to implement measures planned for the future already in the model in order to detect any errors and thus get the greatest possible benefit from the property. Property and facility managers also benefit from the use of a digital twin during the management phase.

What Is the Task of Real Estate Asset Management?

The main task of asset management: Managing real estate. In concrete terms, this means the analysis and valuation of the real estate or an entire portfolio. This is followed by management and optimization. This includes, for example, the constant adjustment and ongoing implementation of the property strategy, the representation of the owner’s interests and assumption of the tasks, the optimization and reduction of current costs and the control of property and facility management. Asset management for real estate is active throughout the entire value creation phase. It is therefore to be understood as a kind of process that should ultimately deliver a result – to increase the value of the property with regard to the client’s goal. The property can be accompanied throughout the entire process with the help of 3D surveys, a BIM model or digital twin.

The real estate manager looks after the real estate investments of various investors. Accordingly, he takes care of the organization, control and all other aspects of a property. He is the first point of contact for investors. The tasks of a real estate asset manager are assigned to the strategic property level. Investment and portfolio management is on top.

What Does a Real Estate Asset Manager Do?

Concrete tasks are the acquisition and processing of information on the properties. Planning and taking value-enhancing measures in order to generate an optimal profit is also a very important area. This includes weighing the costs and risks associated with the specific measures. Once the measures have been determined, they are partly passed on to a property and facility manager. The regular exchange with the owner is also a main task of the real estate manager. Regular reporting on the current condition of the properties is also part of this. Therefore, a real estate manager must always keep an overview of the current market, think long-term and recognize changes and trends at an early stage in order to act accordingly.

Due to the various tasks, it is necessary for a real estate asset manager to work with a wide variety of functionaries, such as architects, accountants or brokers. This, not only requires a wide range of knowledge, but also a certain willingness to negotiate and assertiveness. By creating a single source of truth, the asset manager can communicate with the other stakeholders in a simplified way and avoid media disruptions.

Why Do I Need Real Estate Asset Management?

The management of assets, such as real estate, serves to maximize value in the interests of the owner. The goal of a real estate asset manager is to optimize the client’s portfolio, taking into account his goals, risk tolerance and other factors. Investors usually have clear ideas in mind. In order to achieve these goals, investors depend on professionals who manage their properties and maintain an overview. This is best achieved with a 3D model. The 3D model not only supports asset management in managing real estate. But, property and facility managers also benefit from its use. In addition, a 3D model is useful for restructuring or renovation work, as planned changes can be visually represented. In summary, a 3D model provides an improved overview of the entire property, which in turn can lead to an increase in value. The reasons for using a 3D model in brief:
  • Greater clarity: All information can be found bundled in one place.
  • Improved defect management: Supporting property and facility management, as defects can be identified directly.
  • For restructuring the property: Planned changes can be checked in advance in the 3D model.

This Is Why the Real Estate Industry Really Needs the
Digital Twin

Digital twins are not immediately associated with office or residential real estate. But it is precisely there that many advantages arise when they are used, for example in apartments, offices or shopping centres. To ensure success, it is essential for the real estate industry to develop profitably and in a customer-oriented way. It is digital solutions and smart technologies that make such development and management of real estate possible.

What Are the Advantages of Real Estate Asset Management?

Improved Investment Planning with Minimized Risk

The service of an asset manager provides a better overview, which reduces the risk of a bad investment.

Strengthened Competitive Position

Comprehensive property management, accompanied by precise documentation such as a BIM model, is a great advantage over competitors.

Successful and Sustainable Decision-Making

With the transparent valuation of an asset manager estate, the chances of making a sustainable, successful investment are much higher.

Efficient and Effective Use
of Available Assets

With the use of a real estate asset manager in conjunction with a 3D model, optimal economic performance for real estate can be implemented.

For Whom Is Asset Management Real Estate Suitable?

National Institutional Investors
National institutional investors include, for example, insurance companies or pension funds. They usually want to keep their properties in the portfolio for at least ten years and aim for a stable distribution. It is not uncommon for real estate asset managers to be commissioned to convert or refurbish a property.

International Investors
International investors usually aim to resell the acquired property after a short period of time. Accordingly, it is a pure sales mandate. However, this also includes the preparation of the data and the follow-up of the sale. With long-term prospects to keep the property, letting is also one of the tasks of an asset manager.

Financial Institutions
Financial institutions act similarly to international investors – they want their goals to be achieved quickly. This means a quick letting or a prompt sale of problem properties.

Non-Real Estate Companies
Non-real estate companies expect full asset management. Their demands on a real estate asset manager are extensive, whereby acquisition plays a subordinate role here.

What will the Future Look like in the Field of Real Estate Asset Management?

Asset management is one of the most important areas of expertise in the real estate industry. Therefore, the position of an asset manager will be increasingly needed in the future. There is still no end in sight to the investment boom on the German real estate market. Urban centers are growing steadily everywhere. Accordingly, the management of buildings, combined with optimal asset management, will become all the more necessary worldwide in the coming decades. Digitization and a digital property database will pay off several times in the future.

What Challenges can Arise in Real Estate Asset Management?

Working with real estate is a multi-faceted business and can become very complex. A real estate asset manager is only measured by the finished result. It says how well or badly the management of a real estate portfolio has succeeded. Ultimately, he takes overall responsibility for all activities associated with investing in the asset. Activities such as setting strategic and tactical goals involve certain risks. As a real estate manager, dealing correctly with them and the associated market knowledge is extremely important.

There is also support for the work of a real estate asset manager. With the help of a 3D model, it is possible to digitally map the property. This gives the asset manager a complete overview and knows exactly the value of the property. The digital documentation can also be used for defect management. Errors are more likely to be recognized and can be rectified immediately. Management can also be carried out more efficiently. With the digital inventory, the work of the asset manager is made much easier, so that the value of real estate can be increased optimally.

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