The FM Professional

What is real estate portfolio management?

Darin Herle
June 24th, 2021

What is real estate portfolio management? Real estate portfolio management is how you manage your real estate assets, and includes the use of real estate management software. 

Proper real estate portfolio management is critical for day-to-day operations as well as long-term planning. There are many different types of positions that handle a real estate investment portfolio. These roles can include facility managers, property managers, real estate portfolio managers, and asset managers. All can be responsible for overseeing multiple properties.

Without a streamlined system to stay organized, it can be challenging to stay on top of each real estate investment property’s unique needs and obligations. 

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Because much of the working world is making or has already made a shift to a hybrid workplace, ensuring your company is getting the most from its commercial properties has arguably never been more important. In other words, the way companies are using space is evolving; whether it’s through leasing or owning, managed through a brokerage or in-house, commercial real estate needs to be managed correctly.

Successful real estate portfolio management ensures companies are saving money and enhancing cash flow on their properties, making the best use of these spaces for optimal growth. Real estate portfolio management involves several tasks such as:

Real estate asset management and allocation

A core part of a facility or real estate asset manager’s job is through investment strategy, capital improvements, and determining the best ways for the company to use its assets through investment management. 

For example, if you realize a chunk of your budget is going unused at one property, you might find a use for that budget in another property. Having this information can enhance its growth in the future. This part of the job is about finding new opportunities to use what the company has in stock. 

Lease tracking

If you manage multiple properties or property types, you’re also managing various lease agreements. Lease tracking can get complicated quickly without solid organization. 

There’s a lot to lease tracking. It includes everything from keeping track of lease terms and costs to managing relationships with the property owners if you rent the space. 

Space optimization

Understanding how best to use your company’s spaces that make financial sense, includes a return on investment, and fosters growth and employee happiness is a core part of this role. 

Stack planning is a popular facility management technique used for this purpose. This technique helps facility and investment managers plan efficient workplaces by way of shifting department seating, floor plans, and more. 

So how best can facility managers keep a steady pulse on their company’s real estate market portfolio of properties? 

Enter real estate management software.

Real estate management software is a set of tools that allows people to manage properties from one hub. This can include both real estate industry professionals and facility managers.

This software typically works in sync with other office planning software. This includes integrated workplace management systems (IWMS) and integrated facility management (IFM) software. That way, your workplace is completely aligned. 

Real estate management software lets you see data like property management data, space utilization reports, lease management information, costs, and budgets. For example, with lease data and usage combined, you won’t just see where space is underutilized. Instead, you’ll know where your budget is going to waste. And you’ll have the tools on hand to make swift improvements. 

As a result, you can do the best decision-making possible for your spaces with this information at your fingertips. 

Benefits of corporate real estate portfolio management

There are several ways to use this type of facility management software, including:

  • Manage your entire real estate portfolio all from one central place
  • Know what’s happening at each real estate property at any given time
  • Keep track of information like leases and important dates
  • Regulate your lease management costs
  • Optimize your space usage 
  • Get access to high-level portfolio performance data when you want it 

The bottom line is that real estate management software is a vital part of managing multiple properties (and staying sane!).

How organizations use their commercial spaces has evolved significantly over the last year. As a result, facility managers need to arm themselves the technology and data. This will enable them to keep up with the changing workplace and demands of their organizations as well as maintain proper real estate portfolio management. 

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Photos: ibuki Tsubo