Real Estate Investment and Capital Management Company – Systems Direction
The Challenge
A Real Estate Investment and Capital Management Company with over 500 Tenant-In-Common (TIC)* investors was looking for a way to enable investors to easily view investment information on-line. The Client was planning on doubling the size of their business within the next 18 months and needed a more sophisticated reporting solution.
Because a typical transaction may have up to 200 investors associated with one particular fund/asset, the Client was frustrated with the use of standard off-the-shelf accounting programs to manage the reporting process. The Client also knew that as volumes increased, they would need more people to manage the data unless the process was automated. To add to the complexity of their problem, the Client had at least five different property management companies sending in paper reports - the process of managing several vendors was extremely cumbersome and did not allow for a quick way to respond to inquiries or make decisions.
The Client asked Teel StratVisor Group for assistance in designing a paperless and streamlined process while leveraging an off-the-shelf software package.
What We Did
Teel StratVisor Group first documented the portfolio requirements to investors, broker dealers and internal management. The team then documented several key processes in asset management and investor reporting. Leveraging an off-the-shelf package, our team identified areas in the package and reporting that could be enhanced to meet the Client's needs. A detailed Systems Implementation Plan prioritizing initiatives was provided to guide the client.
The Result
As a result of working with Teel StratVisor Group, the Client received the following:
- Documentation of where the company needed to migrate in order to implement a paperless process while having all of their required data accessible on dashboards and in a central system
- Future state macro-level processes and data flow
- A fully-populated data map and groupings for:
- Property management
- Due diligence data feeds
- Asset management
- Investor reporting data
- Identification of required system links and data requirements to link the internal data source to the investor website
- A technology action plan to support future growth and increased independence
- Property management implementation including portfolio accounting, construction, a web-enabled AP processing tool, customized reporting and dashboards
When the client implemented the recommendations, the cost of implementing the new paperless and centralized solution was recouped within one year due to the savings in:
- Personnel needed to track investors
- Personnel needed to maintain hardware (leveraged application service provider [ASP] in delivering the software)
- Personnel needed to support growth
- Reduction in time devoted to the activities above
Timing:
- Systems Direction – 12 weeks
- System Implementation – 12 months
* Tenant-In-Common – When an exchanger wishes to complete a 1031 exchange, but does not want to exchange into another management intensive property, one option available is for the exchanger to invest in a portion of a professionally managed, commercial grade property along with several other investors. This is an investment structure called "Tenant in Common" or TIC. Tenant-in-Common is a form of holding title to real estate that allows investors to own an undivided interest in property, and thus, if structured properly, satisfying the 1031 requirement for "like-kind" property to be exchanged.
