Understanding a Commercial Real Estate Prospectus
As a general partner or leader for a commercial real estate firm, you’re well familiar with a very important document that’s part of most of the deals you make: the commercial real estate prospectus.
This document is required by the Securities Exchange Commission (SEC) and is filed with them when a firm makes real estate investments open to the public (note that this is different from an offering memorandum, which is intended for private placements). It specifies a wide variety of information about the investment:
- Information about your firm and its values
- The company’s past and current financial position
- A summary of the investment opportunity
- Information about the leaders in your firm
- What the structure of the deal is (equity or debt)
- How funds will be used or reinvested
- Pricing info and expected return on investment
- Risks and any regulations that affect the deal
While you and your team have a great deal of information to gather and lay out upfront for a commercial real estate prospectus, there’s another dimension to these important documents that greatly impacts overall outcomes: how you manage, distribute, and process them.
Document management matters in commercial real estate. Learn how to streamline this administrative function.
Why Real Estate Prospectus Management Matters
Remember, just as with any other industry, the experience a customer has with a brand — in this case, the experience an LP has with your firm — significantly impacts their satisfaction and whether they’ll ever do business with that brand again. As a commercial real estate firm, you want those LPs to invest not just once but multiple times again in the future. While your performance and that of the property heavily influence that future, their experience investing with you also makes an impact.
Imagine meeting a prospective investor and building a relationship with them over time. When an opportunity arises, it’ll be up to you to present that opportunity in a variety of ways — one of which is a commercial real estate prospectus. If you’re making that process and experience excessively manual, and if the investor can’t access it quickly and easily, that investor’s experience could be negatively affected. They’d have to reach out to you repeatedly and go out of their way to get that information.
The importance of managing this information doesn’t apply to investors alone. It also affects your operations and productivity. For example, the last thing you need is your team spending hours or even days digging up and manually handling these documents and answering questions from investors. Far better to digitize and centrally store them in a platform that makes them accessible to investors at any time so they can reference information from the prospectus whenever they need it. This ensures your team is able to keep deals moving forward and provides a self-service solution for your valued investors.
Transform Commercial Real Estate Prospectus Management with Covercy
As a leading commercial real estate technology company, Covercy is the first platform to combine investment management with banking, investor relations, and numerous other capabilities that GPs and their teams need. Consolidated into a single solution, our platform enables leaders to better manage their AUM and streamline numerous administrative functions that span the entire CRE deal cycle:
- Manage numerous bank accounts in a single tool
- Identifying and sourcing the new deal opportunities
- Preparing, storing, and distributing deal information
- Managing and tracking fundraising activities
- Issuing capital calls to investors
- Issuing payments to vendors and partners
- Automating distributions to investors
- Giving investors self-service reporting
- And much, much more
If your organization has been struggling to find the right tools to make your daily work easier, or if you’re overloaded with multiple platforms for different functions, making the change to Covercy will help you achieve your goals. And with the commercial real estate industry seemingly in a constant state of flux, there’s never been a more important time to reduce administrative workload and complexity. Our platform supports firms around the world and in multiple markets — including those focusing on alternative asset classes.
Connect with us to learn more about our platform and to see it live in a private demo.