According to Altus Group, there is a gap forming between those CRE firms that embrace technology and those slower to innovate. Failure to invest in the right software solutions and analytics can put a damper on firm productivity, effective asset management, and informed decision-making.
If you can relate to one or more of the following indicators, you may just want to consider acquiring investor management software for your firm.
1) There are inconsistencies or inaccuracies in your calculations
Spreadsheets have long been used to calculate waterfall distributions, and for about the same amount of time, they have featured errors. In fact, 90% of spreadsheets today are guaranteed to contain at least one error, if not more. The problem is that spreadsheets will always give you a result, but that in no way ensures accuracy. And we’re not saying you don’t know how to do the calculations. But one typo from ‘fat fingers’ can skew all of the numbers. Other than the wasted hours and increasing frustration, these inconsistencies can have costly repercussions.
The IMS Solution: Investor management software automates formulas and calculations, eliminating the most common risks associated with spreadsheets. Templating ensures compliance with standardized guidelines, and audits enable the team to resolve any discrepancies.
2) You are spending a lot of time on manual processes
Almost 80% of commercial real estate firms are using disconnected systems and manual methods to manage their investors and their assets. Outdated procedures and manual processes can slow you down and take up hours of time and budget that could be focused on more value-add activities. Examples of these tasks include answering phone calls, sending 1:1 emails, updating contact and bank information, and responding to individual questions. But many of these activities and workflows can be automated or optimized, boosting both efficiency and effectiveness.
The IMS Solution: The ability to automate frequent but tedious processes can save days, weeks, or even months of time per year. For example, investor management software can enable firms to send communications at scale rather than individually. Additionally, it can allow investors to update their own contact and bank information and easily access relevant documents, freeing up time that would otherwise be spent on these one-off tasks.
3) You have no or limited insight into investor activities
When you have new opportunities arise, how do you know which candidates would be the most likely to invest? Are you able to identify best-fit investors based on criteria such as investment size, region, and asset type? Once you have secured investors, do you know what stage they are at in terms of receiving and signing deal documents? Most sponsors have limited insights into this type of information, which inevitably slows down equity raises.
The IMS Solution: Investor management software provides CRE firms with the insights needed to raise equity faster. Based on a variety of criteria, sponsors can identify those investors who would be the best fit for a particular project. Then they can email those target investors with an invitation to invest, and the investment wizard will guide the investors seamlessly through the process.
4) You are not always sure how to optimize your assets
You may or may not be able to visualize the performance of your assets, but do you always know what you need to do in order to get the most out of them? Do you have a clear understanding of what went wrong historically and how you can improve in the future? Are you able to identify performance trends in your portfolio? As you are struggling to figure out next steps, your peers who are leveraging predictive analytics are gaining a competitive edge.
The IMS Solution: According to a recent Forrester study, over 50% of CRE firms use data and analytics to shape their decision-making. That means that if you aren’t leveraging analytics, you could be falling behind. Investor management software provides actionable data to track trends, identify opportunities in your portfolio, and improve the performance of your properties.
5) You feel overwhelmed trying to manage investor relations
Investors are key to the success of your business, and commercial real estate is an industry built on relationships. But investor expectations are rising to the point where they demand more customized services, more transparency, and a better client experience. Depending on the size of your firm, this could be a very time- and labor-intensive task (and difficult to keep up).
The IMS Solution: The investor dashboards available in investor management software deliver the transparency and availability that investors demand while simultaneously providing the improved user experience they have come to expect. With 24/7 access from desktop or mobile, investors can view the positions and performance of their investments, look up distribution history, and access investment documents.
6) You or your investors are concerned about data security
The risks associated with data security continue to grow, particularly as more and more big-name companies fall victim to security breaches. Historically, the real estate industry has not been targeted as aggressively as other industries, but the amount of sensitive data created, stored, and shared on a daily basis should be enough to compel professionals to take action and ensure this information is secure.
The IMS Solution: Investor management software can ensure security and compliance, with features such as banking and military level encryption, real-time backups, and a data consistency plan.
To learn more about how commercial real estate firms have used Investor Management Services to save time and resources, drive value, and improve the investor experience, click here.
If you are ready to take the next step, schedule a free demo today!