Using Technology to Adapt to a Changing CRE Landscape is More Essential than Ever
The commercial real estate (CRE) landscape is undergoing major shifts as properties fail and asset classes evolve. With prudent planning and technology, managers can seamlessly execute complex commercial real estate exit strategies while positioning portfolios for changing demands. Adaptability and flexibility—as well as tools that add them—are crucial as new avenues are explored, and exits need to be executed efficiently as the environment dictates changes.
It’s certainly no secret that the office sector faces growing distress as remote work persists even as the fever pitch of the pandemic subsided. Many office buildings now stand empty, or at least with vacancy rates higher than ever before. Agile investors and GPs are adjusting and are beginning to convert such properties into multifamily housing.
Diversification of CRE Assets has Begun
More opportunities exist elsewhere, however. Retail and industrial are two asset classes that have grown well into 2023, for example. Both have been on a steady, multi-year growth curve as well. Retail began its resurgence in 2022 as in-person shopping returned to pre-pandemic levels. Industrial real estate drew more investment in late 2020—and has continued upward since—amid the supply chain crisis that incentivized reshoring and nearshoring efforts.
This also doesn’t take into account a host of alternative asset classes that have gained traction. These alternatives run the gamut, from distressed properties and student housing and hospitality-focused properties to land development opportunities that fuel data centers and the like, for more diversification.
But to take advantage of the variety of asset classes emerging, GPs need an efficient way to execute commercial real estate exit strategies to be in a better position for the next opportunity. The best CRE management platform provides the tools and features that streamline the process and enhance decision-making.
How the Right Platform Empowers Commercial Real Estate Exit Strategies
Exiting assets has become just as strategically critical as acquisitions. Managers must handle a myriad of tasks from vendor payments to documentation to investor relations. Without robust systems, these workflows can quickly become unwieldy. Let’s look at some examples.
- Exiting an owned office building requires settling outstanding vendor invoices, terminating contracts, and handling taxes and obligations tied to the property. Teams must compile extensive documentation encompassing maintenance records, inspection reports, tax filings, legal agreements, and beyond to transfer to buyers.
- For joint ventures and fractional investors, detailed accounting and reporting provide transparency into sale terms, timing, distributions, and more to align expectations. Responding to inevitable investor inquiries throughout the process adds administrative workload.
- Managing retail exits might involve negotiating lease terminations with tenants, addressing any outstanding liabilities, and completing final common area maintenance billing. Industrial exits necessitate environmental assessments, equipment transfers, and coordinating warehouse closures with inventory logistics teams.
- Multi-tenant assets pose even greater challenges in ending dozens of leases, finalizing rents, handling security deposits, and transitioning utilities. Without centralized systems, crucial tasks and deadlines can slip through the cracks.
An All-in-One Solution
That’s where a unified real estate management platform becomes vital—integrating information and automating workflows to enable seamless exits. Key features like vendor payment tracking, document management, accounting controls, and investor dashboards keep the process moving forward efficiently.
Built-in reporting and analytics offer real-time visibility into critical metrics across portfolios. Teams can easily monitor timelines, budgets, invested capital, and returns to optimize exit strategies. Customized notifications and automated checklists enforce compliance and risk mitigation.
With the right technology solution, commercial real estate managers can execute asset exits smoothly while delivering complete transparency. As portfolios evolve with market shifts, prudent preparation and planning are key to maximizing value. Unified data and automated workflows reduce the friction of complex transitions. The focus stays where it should—on driving portfolio performance, no matter the conditions.
Optimize Commercial Real Estate Exit Strategies with the Right Platform
Remaining fluid and adaptable is essential given the current landscape that GPs must navigate. Being able to embrace the next opportunity when it arrives can often depend on your ability to seamlessly exit from other assets when needed. When you’re ready to tackle that next opportunity, Covercy helps CRE professionals manage their assets and the entirety of financial and operational tasks associated with them.
Forged by experienced CRE experts for use by GPs, syndicators, and those they work with, Covercy is the only platform today that combines real estate asset management with banking, and much more:
- Conduct capital calls
- Fundraise for your next deal
- Easily automate distributions with nothing but your mouse
- Manage bank accounts inside the platform
- Provide comprehensive self-service reporting for investors
- Give investors clarity with an intuitive investor portal
This is only the beginning with Covercy — the leading commercial real estate investment management platform. Sign up for a private demo of our tool today and experience the difference that Covercy can make for your firm.