5 Things Modern Investors Expect from CRE Sponsors
The commercial real estate industry is quickly evolving, and so are investor expectations. As industry shifts occur, investors are no longer satisfied with yesterday’s level of engagement, communication, and data access. Rather, modern investors seek and demand a relationship with their CRE sponsor that boosts their confidence in the partner they have selected. To ensure that investors’ demands are fulfilled, sponsors need the skill, knowledge, experience, and tooling to manage the portfolio in an effective and trustworthy manner. The key to thriving in an ever-changing environment and being able to meet investors’ expectations lies in being proactive and seeking to truly understand what modern commercial real estate investors want.
Networking and relationships are an important part of success in almost every industry. In fact, a study from Harvard found that 85% of professional success comes from the ability to effectively network and build relationships. The commercial real estate industry is one in which clients are making a large, long-term investment that could have major implications for their future. Thus, relationships always have been and will continue to be important in commercial real estate.
Building and nurturing quality relationships helps to create repeat customers and generate referral business. Making clients happy and meeting (or exceeding!) their expectations is what keeps them coming back to you. In the long run, they are more likely to make mouth-to-mouth recommendations, have fewer demands on your office staff, and make larger investments. Still, over 70% of CRE firms use one or more manual methods to manage their client relationships. Using manual processes can hinder productivity, slow down firm efficiency, and negatively impact the investor experience.
Today, technology is driving change in the commercial real estate industry. It is altering the way that commercial real estate sponsors and investors engage, communicate, and otherwise conduct every aspect of their business. Many investors have already seen the progression of technology and its ability to monitor and track as the key to the success of their portfolios. And these advancements in technology are empowering sponsors to meet evolving investor expectations. When technology is successfully leveraged, firms can avoid future problems and focus on scaling their business and creating more efficiencies – and ultimately providing a winning investor experience.
Most organizations do not have a lot of surplus resources. Every time an investor has a request or needs information on a project is time that the sponsor is not spending working on maximizing the value of an investment or looking for the next great real estate opportunity. Technology helps to manage all of this information and streamline processes. With these efficiencies in place, investors are more likely to see their returns increase.
Today, personalization is key to gaining an investor’s loyalty and keeping them engaged. This means that the “one-size-fits-all” approach that may have worked a couple of years ago is no longer the best strategy for engaging investors. With 81% of today’s consumers wishing that companies knew them better, firms that leverage technology to craft personalized communications are more likely to receive a higher volume of engagement from investors than those who do not. Additionally, crafting personalized email communications enables sponsors to send more valuable and relevant messaging to each investor.
As data-driven decision making grows within the industry, there has been a shift towards more complex and technological processes. Data analytics and artificial intelligence (AI) can be used by CRE investors to manage risks and complexities more effectively because of the ability to identify patterns and opportunities and to predict future scenarios. Using data to manage these risks can result in faster decision-making, lower transaction and operational costs, and efficient portfolio optimization.
Today’s investors have expectations that seasoned CRE sponsors could have never predicted. Seeing things done faster, smarter, and more cost effectively in other markets has translated into modern investors’ expectations across the commercial real estate industry today. Innovative technology has transformed the status quo, changing how commercial real estate sponsors are expected to engage, communicate, and conduct business with investors. As more and more change occurs within the industry, sponsors cannot afford to fall behind the competition when it comes to assessing, understanding, and exceeding modern investors’ expectations.
Download the free eBook Investor Expectations and Experiences to learn more about what Commercial Real Estate investors expect from their CRE sponsors.