Harnessing Data into Actionable Insight for Real Estate Managers
By Justin Knott, Director, Private Markets, SS&C
Published: 31 October 2023
Direct real estate investors are experiencing ongoing challenges in effectively managing their real estate portfolios—especially as they increase in size and complexity. Collecting data from multiple property managers and underlying property accounting systems is time-consuming and introduces risk and operational inefficiencies.
Real estate managers need the ability to harness property data and turn it into actionable insights to help better manage their real estate portfolio, streamline operations and provide better visibility and oversight. The insights help ensure the business runs optimally and supports future growth and scale. Based on current market conditions, key person and attrition risk are significant factors. Attracting, training and retaining the right talent—and providing employees with the right tools to get their work done efficiently—have all become increasingly challenging.
Addressing the Challenges
Today’s real estate operating models are prone to mistakes, and there are opportunities to improve processes and increase data accuracy, timeliness and reliability. The main challenge is normalizing data sets from multiple systems in multiple formats. Real estate service providers can help by applying highly controlled review and oversight functions, augmenting and improving workflow processes and enabling managers to meet specific accounting and reporting timelines.
Service providers must have experience across several jurisdictions, asset classes, regulatory regimes and legal entity structures globally to do this successfully. Structures can vary from co-investments and open- and closed-end funds to real estate investment trusts (REITs) and special purpose vehicles (SPVs). Asset classes can include data centers, logistics, student housing, office, retail, multi-use, residential, multifamily, infrastructure, industrial, renewable wind farms, solar energy plants and impact investments. Service providers need to be able to offer a flexible service model catering to each of these entity structures and asset classes. Fit-for-purpose services, technology and expertise can be implemented modularly to enhance and complement the manager’s current ecosystem of internal and external systems and service providers.
Leveraging Technology and Expertise
Managers and investors manage real estate portfolios as their core focus and competency—they don’t focus on developing technology systems. The additional value service providers can offer is to deploy the cutting-edge technology and resources required to aggregate and normalize data from disparate systems and sources. Managers can then focus on managing and expanding their assets instead of the operational headaches associated with maintaining systems and attracting and retaining talent to operate those systems. Outsourcing mission-critical asset- and fund-level functions provides managers with resource predictability, economies of scale and access to the latest systems without up-front investment. The practice enables managers to pursue new investment opportunities without limitations or delays.
Benefits to Real Estate Managers and Investors
Using proven services providers to deliver investment-level oversight, reporting and analytics provides several benefits to real estate managers and investors—especially as the number of investments, the volume of transactions, and the number of property managers and systems increase.. Service partners should:
- Review of financial statements to ensure property profitability and proactively identify issues promptly.
- Actively liaise and communicate with asset managers and property managers to understand property activity and upcoming deadlines and deliverables.
- Monitor key metrics like property cash flows, occupancy rates and recoverability of expenses to avoid excess expenditures.
- Check and investigate month-over-month movements, accounts receivable balances, accruals, and bank reconciliations, analyze property taxes and prepare top/bottom performing asset reports by revenues and expenses.
- Ensure leasing agreements cover operating expenses, including identifying leases primed for renegotiation.
- Flexibility to work on client systems and perform functions in or extract data from those systems by being well-versed on a broad range of asset-specific systems in the industry (e.g., SS&C SKYLINE, Yardi, MRI, etc.), eliminating the need for data conversions.
- Improve automation and workflow using innovative/evolving technologies like Robotics Process Automation and Digital Workers.
- Leverage experience performing similar services for numerous clients, ensuring infrastructure is in place and implementation can be delivered quickly.
- Deliver an adaptable service model, where the form of the service provider relationship can change over time. Additional services can include more middle/back office functions and asset classes in line with the manager’s capacity, resources, and willingness to outsource or retain more functions.
- Help track and report on ESG metrics and produce presentation-quality reporting for internal and external stakeholder consumption.
How SS&C Can Help
SS&C offers comprehensive, modular real estate services to a diverse, global client base. We have extensive experience supporting the needs of organizations with a broad range of real estate investments across the full spectrum of legal entity structures. Ownership of the entire value chain, from the technology and data centers to the processing infrastructure and personnel, provides SS&C with tremendous control over the quality of deliverables to our clients. We build, own and operate proprietary, advanced and scalable technology platforms and offer the flexibility to work in our clients’ systems.
The result is a tailored solution to meet the unique requirements of your business while providing scalability, access to expertise, oversight of your property managers and transparency to your data. As a global firm, SS&C operates with a follow-the-sun processing model to leverage time-zone differences and offer responsive, consistent customer service capabilities in any time zone.