How to Evaluate a Real Estate Manager

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

The right real estate asset management firm can create a seamless process for you to invest in private real estate. The firm can select, manage and hold or sell real estate to give you access to high-quality commercial properties.

The firm takes care of vetting investment properties, but you must evaluate your real estate investment firm and its managers.

Jump into private real estate investment with confidence by holding your real estate manager to our top five standards.

1. Check out property locations.

Be sure your firm chooses investment property locations based on data-driven decisions. Some firms jump impulsively into up-and-coming cities. Others focus too narrowly on major global hubs or base decisions on a gut feeling or emotion.

The right firm analyzes population and industry trends. For example, Origin Investments pays attention to residential sales to find an affordable submarket for commercial properties. Origin knows popular amenities, reasonable commute times and little competition make for a solid commercial property investment.

2. Who’s on the team?

Do some research to find out not only who is a part of the firm’s asset management team, but also the size and training of the team. Don’t stop after sizing up the asset management crew. Look into who leads and manages acquisitions and investor relations.

Does the firm attract and retain the best people? How long have key team members been at the firm? Ask yourself if they have enough experience to deliver the return on investment promised. Origin compensates its team based on performance to ensure alignment.

3. What’s the underwriting process?

A bank performs a thorough underwriting process to find the flaws in a business plan before it funds any new venture. A trustworthy private real estate investment firm should do the same.

A due diligence process will help a strong acquisition team validate a proposed investment plan and the potential to meet projected returns. Asset managers must produce data points to support every prediction they deem achievable.

4. Patience is a virtue.

A real estate investment firm needs to put available capital to use. No one makes money by sitting on the sidelines, but a real estate manager can move too quickly chasing quick cash to fund short-term needs of the firm.

The best firms exercise patience and form good working relationships with commercial property owners. These owners are the connections that become future partners or sellers.

Origin Investments also believes it's important to remove potential conflicts of interest, like outsourcing property management services. This eliminates the issue of having to worry about property management staff when considering selling a property. Look for firms who align the real estate firm's goals with the goals of investors like you.

5. Continual evaluation.

Origin is committed to continual evaluation of its properties. The right firm will keep its eye on every asset’s valuation and cash flow forecast. This watchful approach means if future returns are estimated to fall short of original projections, the firm should move to sell.

Learn about Origin Investments Today

Origin Investments meets these standards, and their founders and principals, David Scherer and Michael Episcope, also have skin in the game with their own capital invested in the firm's funds.

Connect with Origin Investments to find trusted real estate managers. Learn more today.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.