"Forward Looking Information: A Requirement for Optimizing Performance" <br>by Ed Lubieniecki & Barry Faulkner

"Forward Looking Information: A Requirement for Optimizing Performance"
by Ed Lubieniecki & Barry Faulkner

May 2018 | Dallas, TX — Published on May 5th, 2018 in Volume 18, No. 18 of Realcomm's Advisory Newsletters, find Ed Lubieniecki and Barry Faulkner's latest article below:

Although real estate professionals don’t have a crystal ball for predicting the future, they do have the ability to forecast what lies ahead with a high degree of accuracy and, in turn, improve asset and overall portfolio performance. The key is increasing their focus on “forward-looking information” (FLI).

FLI encompasses a wide range of familiar analytical activities including cash flow forecasting, valuations, hold/sell analysis, scenario modeling, sensitivity analysis and budgeting/reforecasting. Of course, real estate professionals have long engaged in these exercises to some extent. But, to date, most have relied more heavily on backward-looking information to run their businesses.

They have focused and continue to focus their energy and capital on: 1) collecting information about what has already happened, e.g., last year’s financials, last quarter’s leasing activity and last month’s occupancy numbers and; 2) utilizing that data to make decisions about how to manage properties in the months and years ahead.

Moreover, the historical information they use tends to be flawed because most companies unwittingly have inefficient, even incomplete, systems and processes for data management, including but not limited to siloed technology solutions. This creates significant challenges for any organization to develop an accurate view of its real estate holdings – what’s happened in the past as well as what the future may hold.

At the end of the day, though, owners, operators, investment managers and portfolio managers of real estate assets are in the business of performance optimization. This requires them to make informed predictions about future business conditions affecting how investments and assets will perform over time.

In our experience, harnessing FLI significantly helps with these predictions, which in turn, contributes to operational efficiency, leads to markedly improved asset and portfolio performance, lowers risk and enhances investor confidence and interest. A comprehensive FLI initiative can increase real estate returns by 10 basis points while also reducing expenses for portfolio management, asset management and reporting by up to 10 percent. These are compelling results for all stakeholders, especially for investors.

Today’s real estate industry leaders understand this, so they do a few things differently. They put a premium on data management, continually strengthen their analytic capabilities and are rigorous about how FLI work is operationally structured and delivered. They prioritize: 

  • Collection and access to quality data, based on the conviction that better information leads to shrewder decision-making and stronger business results.
  • Continual review and updating of predictive work with detailed variance analysis that examines and refines inputs and processes.
  • Use of automation because the complexity and repetition of FLI efforts in real estate require ongoing evaluation and the implementation of emerging technological solutions can improve standardization, speed and efficiency.
  • Collaboration and elimination of silos to facilitate teamwork across departments, organizations and geographies as well as adoption of common technologies and data sources.
  • Outsourcing services and/or technology platforms to support advanced analytical and forecasting capability so leadership can concentrate on more value-added work.

Increasing emphasis on a forward-looking approach is by no means a call to abandon backward-looking information (e.g., reporting), which still has tremendous value and is a core business requirement. It’s also important to always consider current trends when making decisions about how to manage for the future. In fact, effective forward-looking management requires the synthesis of what has happened previously with real-time trends and melding that with FLI processes/tools for a holistic view of what’s on the horizon and beyond.

RealFoundations' believes that a systematic approach – one that assesses weaknesses, identifies opportunities for enhancement and then supports execution – creates the framework for improving an organization's FLI capabilities. A systematic approach considers the following: 

  • Strategic Direction and Executive Requirements – enterprise strategy and objectives, key forward-looking activities, stakeholder priorities and operating challenges.
  • Data – quality, sourcing and governance.
  • Process and Controls – FLI activities and processes, level of effort estimate, procedure review and output risk.
  • Organizational Alignment – responsibility matrix, resource map and sourcing options.
  • Technology Capabilities – core technology solutions, modeling tools and artificial intelligence.

With an eye on the future, shifting an organization’s emphasis to FLI can help real estate owners and investors realize their performance objectives, i.e., increase returns, improve efficiency and help differentiate a company’s operations and real estate portfolio.

View the full article and sponsor Advisory Sponsor details here.

About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. 

We Make Real Estate Run Better.

RealFoundations Puts Rubber to the Road in the BP MS 150 Bike Ride

RealFoundations Puts Rubber to the Road in the BP MS 150 Bike Ride

 Team Greystar BP MS 150 participants.

Team Greystar BP MS 150 participants.

May 2018 | Dallas, TX — Last month RealFoundations sponsored and supported Team Greystar in the BP MS 150, a two-day fundraising bike ride benefiting multiple sclerosis research, organized by the National MS Society.  Spanning the ~150 miles of course from Houston to Austin, TX, the BP MS 150 is the largest riding event of it’s kind in North America, hosting 13,000 cyclists with a fundraising goal of $14 million.

Seven RealFoundations practitioners cycled in the ride, raising $6,088 in donations, contributing to Team Greystar’s total fundraising achievement of over $153,000 for the National MS Society.  In addition to individual participant fundraising efforts, RealFoundations donated $10k to the National MS Society, in support of Team Greystar, a longtime client and partner of the firm.

“The event itself was truly a remarkable experience, with thousands of riders and volunteers all working towards the same goal", shares Lauren Stokes, Director of Managed Services Technology at RealFoundations. "We were honored to ride this year with Team Greystar and support their fundraising efforts.”    

The National Multiple Sclerosis Society is a non-profit organization that advocates for people whose lives have been affected by multiple sclerosis. The organization’s focus is to create a space for people who have been affected by MS, or people whose lives have been influenced by MS in some capacity . All research efforts go towards their vision: "A world free of MS".

Learn more about the National Multiple Sclerosis Society here.

About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

The Inaugural Global Lease Count Study

The Inaugural Global Lease Count Study

  CLICK HERE TO DOWNLOAD

CLICK HERE TO DOWNLOAD

April 2018 | Dallas, TX — How many commercial leases are there in the world?  The size of the global commercial real estate leasing market is one that has not received significant study to date.  It’s an interesting question to consider, and with the upcoming FASB lease accounting changes that will require the future value of commercial lease obligations to show on occupier balance sheets, it’s a timely one. 

In an attempt to put forth a defensible answer, RealFoundations founder David Stanford and Senior Research Consultant Ward S. Caswell worked together to estimate the quantity of leases for office, industrial and retails markets in approx. 90 countries.  What follows is an overview of the results and the methodology used to arrive at that number.  We hope this ‘study’ will spark a conversation – read it, think about it and then let us know what you think.

For questions, comments or to begin a dialogue about this study, please contact:

Naomi Souza  |  Naomi.Souza@Realfoundations.net  |  +1 214 292 7086 

GLC_Summary of Methodology  Infographics_V9.png

About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

"In Real Time" by John D'Angelo

"In Real Time" by John D'Angelo

 Click here to read full article.

Click here to read full article.

March 2018 | Dallas, TX —Enterprise Managing Consultant, John D’Angelo’s article “In Real Time” has been published in the Market Perspective section of the February 2018 issue of  Institutional Real Estate Americas. In the article, Mr. D’Angelo explores the future of data governance and management of asset-level information and the on-going paradigm shift in the real estate industry, bringing about the requirement of granular-level information sharing.

Greater information transparency and self-help should reduce the effort required by both managers and sponsors in exchanging information beyond the standard reporting package.

As the industry migrates towards this standard, Investment Managers & Asset Managers must remain cognizant that Investors are becoming increasingly savvy, so the ability to provide accurate and timely data must be in parallel. 

Click the icon above to read the full article.

About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

 

 

RealFoundations Sponsors Agape’s 2nd Annual 'Timeless Love' Gala

RealFoundations Sponsors Agape’s 2nd Annual 'Timeless Love' Gala

February 2018 – Dallas, TX In a continuous effort to support Dallas-local charity Agape Resource & Assistance Center, RealFoundations attended, as a Platinum Sponsor, the second annual Timeless Love Gala on Saturday, February 10th 2018 at the historic McKinney Cotton Mill. This fundraising event, inspired by themes such as the ‘Roaring Twenties’ and ‘The Prohibition Era’, brought all attendees through a juxtaposition of significant eras in American history combined with a fun-filled, entertaining night of nostalgia.

Agape is a non-profit organization committed to providing shelter, sustenance and stability to women and children in the North Texas area. RealFoundations’ decade-long relationship with Agape spans many sponsorship and outreach engagements including NTGivingDay and The Caring Hearts Golf & Tennis Classic as well as onsite construction support by RF volunteers at local Agape housing facilities.

“Fulfilling our corporate social responsibility is not just a trending topic of interest for RealFoundations, it's our priority”, says David Stanford, Enterprise Managing Consultant and Founder of RealFoundations. “We appreciate the assistance Agape provides to local families within our community and will continue to be present and volunteer alongside them when the opportunities arise.” With a night of dancing to ragtime and jazz, casino entertainment, and a mouthwatering culinary feast, this event was most definitely a timeless night to remember.

Agape Gala Event-88.jpg

Agape Resources & Assistance Center is a non-profit organization in Collin County, TX, dedicated to providing critical Housing and life skills that empower women and their children, many of whom have been victims of abuse and violence. With their mission to transform homelessness, crisis and poverty, to self-sustaining, fulfilling lives, Agape relies on the generosity of Platinum Sponsors such as RealFoundations to continue and sustain their philanthropical efforts. Some key events have included the North Texas Giving Day, Caring Hearts Golf and Tennis Classic, and numerous construction projects to aid Agape in providing shelter, nourishment, and counseling to the single mom families going through transition and recovery.

About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 350+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

RealFoundations Helps IREI Launch New Institute for Real Estate Operating Companies, iREOC

RealFoundations Helps IREI Launch New Institute for Real Estate Operating Companies, iREOC

IREOC-Logo-with-Text-v3.png

December 2017 | Dallas, TX RealFoundations announced today its role as Founding Strategic Sponsor of the newly formed Institute for Real Estate Operating Companies (iREOC) initiated by Institutional Real Estate, Inc. (IREI), the largest global media firm dedicated to the institutional real estate and infrastructure marketplaces. 

iREOC's members are leading institutional investors, investment managers and real estate operating companies (REOCs) all working towards a common goal of improving industry operations to form more profitable and productive partnerships.  iREOC is dedicated to connecting, engaging and empowering its members to maximize their performance in REOC partnership investments, individually and collectively.

"As investors increasingly seek ways to exercise more control and create value at the asset-level, and real estate operating companies seek new sources of capital, RealFoundations sees iREOC serving a valuable and previously unfilled role of facilitating connections," said John D'Angelo, Enterprise Managing Consultant, RealFoundations. "And rather than stopping at helping to establish connections, iREOC will further help facilitate communications and the exchange of information, such that iREOC members don't have to figure out how and what information to exchange. RealFoundations is proud to be a part of this important organization and we see our role as a great opportunity to help real estate run better."

Read the full press release on PRNewswire here.

 About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

About iREOC The Institute for Real Estate Operating Companies is a for-profit, exclusive membership organization and division of IREI.  iREOC's mission is to accelerate the development and adoption of workflow best practices in capital raising and operational guidelines for REOC partnership investments that enable investors, investment managers, and real estate operating companies to maximize returns, lower costs, and reduce risk. http://www.ireoc.com/   

RealFoundations Sponsors CREW Careers program

RealFoundations Sponsors CREW Careers program

December 2017 | Dallas, TX - In support of CREW Network's goal of advancing women in the commercial real estate industry, on November 9th, RealFoundations sponsored CREW in the Community's annual CREW Careers: Building Opportunities program, focused on educating local high-school female students about career opportunities within the commercial Real Estate industry. CREW in the Community, a non-profit organization, is a committee made up of members of CREW Network’s Dallas chapter, and has had a history of philanthropy and service to the local community since its inception in 1985.

The annual Building Oppportunities program includes a segment of presentations from experienced, professional women describing various aspects of careers within the industry, including their own, as well as a tour of a local commercial property.  Additionally, the participants form groups to collaborate and design commercial RE development plans which are then presented to a select group of judges from the Dallas real estate community in a mock development competition.

 “CREW Careers is a great opportunity for high school girls to learn about commercial real estate while developing skills essential for the workforce", says RF Director Lauren Stokes, who serves on the CREW Careers Committee and volunteered at the event. "This is my first year participating in the program and I thoroughly enjoyed getting to see the girls engage with some of the industry’s top female professionals.”  More information on CREW Careers can be found on the CREW Network Foundations website here.

 About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

About CREW Network Foundation CREW Network Foundation, the philanthropic arm of CREW Network, is the only charitable foundation solely dedicated to advancing women in the commercial real estate industry. CREW Network Foundation is committed to bringing more women into commercial real estate by offering programs like CREW Careers and UCREW that educate women and girls about the career opportunities in the industry; supporting CRE higher education and training through college scholarships and internships; and providing mentorships to those new to the industry.

 

“What is a Smart Building?” Answered in RF's Latest GRESB Blog

“What is a Smart Building?” Answered in RF's Latest GRESB Blog

October 2017 | Dallas, TX — RealFoundations Specialist Julius Caten’s latest article in GRESB Insights, “What is a Smart Building?”, identifies common traits that would deem a building as “smart” in 2017.  By offering a list of must-haves for several types of tenants, Julius points out that technology needs vary by property type and that retail tenants may not prioritize their needs the same as office tenants or residential tenants. For operators to successfully implement and manage a smart building, they must stay on the fore-front of real estate’s ever-changing technologies and consider both the building requirements and tenant desires of today and the future.

Read the full article here.

Smart City_Opt 3_V3.png

About the Author Julius Caten is a Specialist with RealFoundations with over 25 years of experience in the technology, real estate and energy industries driving projects related to energy management strategy, energy operations, enterprise energy management and performance reporting.  Read more about Julius' background here.

About RealFoundations  RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

John D’Angelo Contributes to NAREIM 20/20 Investor Summit Report

John D’Angelo Contributes to NAREIM 20/20 Investor Summit Report

NAREIM_Banner_20_20_2017.jpg

October 2017 | Chicago, IL -  The annual NAREIM 20/20 Investor Summit took place in Chicago in May, focusing on two important messages: The New Operating Platform & The New Era of Risk.  As an active contributor to NAREIM, RealFoundations Enterprise Managing Consultant, John D’Angelo, was cited in the output report, providing key points of view on how real estate investors and investment managers can begin ‘preparing for the unknown’.

In the report, Mr. D’Angelo notes the importance of understanding the functional operating model within a company, simply described as ‘the work it takes to be in business’ (where do the numbers on the reports originate? how are these numbers calculated? who performs these tasks? etc.).  To get to the point of understanding, he recommends all companies review at least once a year the work that they're doing, what has changed and what is currently changing in the business.  Making sense of ‘the work’ allows firms to identify areas for improvement, streamline processes, identify key performance metrics and apply governance rules to increase efficiency.   

According to Mr. D’Angelo, defining the Information Model is another crucial step in mitigating the risks of data inaccuracies that stem from manual calculations and lack of defined metrics.  “A decade ago, you did everything yourself, but now there are multiple parties collecting, analyzing and acting upon data, we can no longer improvise how this is managed”, states Mr. D’Angelo.  “In the next few years, we are not headed for business as usual, capital is behaving differently, data is changing things, and risk is only greater.” 

Getting a handle on the work that is performed and the data that is used to make important decisions is necessary in today’s world of real estate investing. As a general trend, Investment Managers and their clients are becoming much more aware of the value of improving their capture of data and putting that data to work to understand risks, opportunities, and ultimately drive performance.  

Read the full article on NAREIM's website here.

About RealFoundations  RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.

RF Adds to Depth of Team with the Hire of Three Senior Managing Consultants in 2017

RF Adds to Depth of Team with the Hire of Three Senior Managing Consultants in 2017

September 2017 | Dallas, TX -  In support of its mission of making real estate run better, RealFoundations is proud to announce the recent addition of senior practitioners Kevin Vertrees, Barry Faulkner and Bob Kroner to the firm.  Collectively Kevin, Barry, and Bob bring 60+ years of deep industry knowledge and relevant capabilities to RF and will immediately contribute to the acquisition of new accounts and the delivery of projects and services to existing clients.

Banner_Opt1_V3.jpg

In January, Kevin Vertrees joined RealFoundations as Lead Managing Consultant, bringing 17 years of real estate technology experience by way of enterprise IT design, integration and ecological adaptation, and improving manageability, effectiveness and ongoing efficiencies.  Kevin’s technical expertise spans all major ERPs including Yardi, MRI, JDE, Timberline and SAP.  Prior to joining RF, Kevin served as the VP of Information Technology at Forest City Ratner Companies in Cleveland, Ohio.

Senior Managing Consultant Barry Faulkner joined RealFoundations in May, increasing the firm’s breadth of experience by 25+ years.  Throughout his career Barry’s work has centered on business strategy development and implementation, merger integration, shared services implementation, operational improvement, new product development and change management.  He has extensive operational and investment experience with office, multifamily, industrial and retail assets as well as real estate fund operations.  He also served as Chairman of Portfolio Management Committee at NCREIF from 2011 to 2015. Prior to joining RealFoundations Barry was a Senior Vice President at Bentall Kennedy where he led efforts in strategic plan implementation, enhancing portfolio management, leading fund analytics & reporting and executing new product initiatives.

Bob Kroner joined the firm in July as a Senior Management Consultant, bringing extensive knowledge in the commercial real estate industry, with 20 years’ experience working in the owner/operator REIT sector.  Bob brings industry leading expertise to the firm in areas including finance and accounting, operations, technology and digital marketing strategies, public company and REIT compliance, mergers & acquisitions and sourcing & procurement.  Prior to joining RealFoundations Bob served as a Senior Manager with Deloitte Consulting, LLP where he successfully created client value and market differentiators through strategic financial, operational and technical initiatives.

"The real-world experience that Bob, Barry and Kevin bring to RF is tremendous,” says David W. Stanford, Founder and Enterprise Managing Consultant. “With their collective knowledge and extensive skillset in operational strategy, business process design and technology optimization, we have expanded our capabilities as a firm and look forward to their continued contributions."

About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in China and India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We Make Real Estate Run Better.