Trust: The Key to a Successful Investor Relationship
As a GP, you’re a fiduciary of your investors’ resources and have been entrusted with growing them. As with any investment channel, it’s important for investors to know not only that their money is working for them but also that they’ve made the right choice in a partner. GPs can use real estate investor reporting software that gives investors access to their investments via an investor portal.
This is particularly critical to keep at the forefront of our minds and work today, when economic concerns and the commercial real estate industry itself is subject to more scrutiny and volatility. To ensure your investors and partners have the utmost confidence in you and your abilities, careful consideration must be given to reporting.
GPs looking to win new investor relationships and grow current relationships must be able to demonstrate that their vision and execution can be relied upon. A key way to achieve that is through consistent, accurate reporting — ideally via a real estate investor reporting software solution to make the work and process efficient.
But what does that reporting look like? What should it say? All too often, reporting simply tells you what happened — not what it means. Additionally, it can be hard to determine the proper timeline for reporting. Is monthly too often or just right? Is quarterly more appropriate, or will your investors be pushing for updates sooner?
Here, we’ll take a look at three steps to help you leverage a real estate investor reporting software solution in the best way possible so you and your investors get the most value out of it.
1. Establish the Goal of Reporting
It might sound obvious, but defining what you want to achieve and communicate with your reporting is crucial. You should be telling your investors more than “we’re up X percent” or “revenues are at X amount.” That information matters, but remember: investors are investing in you more than the asset itself. They believe in your vision and its expected results. Establishing a goal for your real estate investor reporting helps to set the stage for all other details and refines the focus of your reporting so you’re only delivering the information that matters most.
- Pro Tip — In addition to reporting on standard metrics, consider including measures that align with the overall vision of the property.
2. Build the Right Framework
Closely related to the above — what all will your reporting entail and contain? What is its structure? Your reporting should be focused and valuable with each delivery. Investors should get digestible updates on your progress along with the usual details on their positions, contributions, distributions, and other financial details. Build the framework for your reporting and keep it consistent. When establishing the framework, this is also the time to decide the medium for reporting. Will you leverage an automated solution that generates report data from a backend system? Will reporting be more bespoke? Automation is preferable today, but whatever your decision may be — be consistent and clear.
- Pro Tip — While you should seek to automate reporting, consider providing a personalized “vision” update to add value and context to the numbers.
3. Establish Cadence and Next Steps
With the goal and framework established, it’ll be time to determine the frequency for delivery. Quarterly is one of the most common to coincide with distributions, but if there is a reason for — and value in — delivering more frequent reports to investors, then do so by all means! Always refer back to your goals for reporting when making this decision. While investors want to see progress, do they need to see short-term shifts that will even out or not even matter in the long run? Understanding your investors and their preferences will be key here, as you’re likely to have some investors who are more engaged than others.
- Pro Tip — Having a strong database and asset management system will go a long way in helping you segment and understand your investors so you can deliver the right reporting to the right audience.
Build the Best Commercial Real Estate Investor Reporting with Covercy
As one of the leading commercial real estate investment management platforms in the industry today, there’s no better solution to help you communicate and share the value you’re creating for your investors. Among other things, Covercy has changed the real estate investor reporting software market. Packed with features that support your daily and long-term workflows, Covercy empowers GPs and their teams across several key areas:
- Investor relations — build and manage your investor database
- Fundraising — market assets, conduct capital calls, and manage funds
- Banking Services— open and manage a variety of accounts from one platform
- Waterfall Distributions — automate distributions to investors in a matter of clicks
Throughout all of these feature areas and others, our platform comes with robust reporting capabilities for generating and disseminating informative updates for your investors, partners, and LPs. It’s all available in one platform — allowing you to simplify your tech stack and upgrade other key areas of your firm that may still be manual or time consuming.
Ready to make your work easier and more effective? Get a private demo of Covercy now.