New Technologies Bridge The Gap Between Multifamily Investors And Operating Partners
Before the 2008 financial crisis, institutional multifamily investors frequently assessed portfolio health based on monthly and quarterly reporting. With their confidence shaken to the core, however, many investors have since become increasingly cautious and hands-on with their investments’ operations. In response, innovative new technologies have been developed to connect investors with their operating partners, offering the portfolio transparency and up-to-the-minute performance analytics investors crave.
To learn more about how these tech solutions are connecting investors with their operating partners and facilitating a more data-forward industry, Bisnow spoke with Justin Alanis, CEO and founder of Rentlytics, a business intelligence platform at the cutting edge of multifamily technology.
Today’s investor groups, he says, want to know more about the underlying drivers of portfolio performance and complete access to operational, financial, marketing and ancillary data can help them get ahead of trends through deeper portfolio analysis and close collaboration with managing partners. And in the increasingly crowded multifamily market, in which many large institutions are trying to find or build new value in mature portfolios, investors need this data more than ever.
For a long time,there was no easy way to capture and apply complete portfolio data. Historically, asset management teams would spend days collecting data from each asset in a portfolio, reformatting and merging that data, and validating it to perform analysis, hoping that no trends or fine details would be lost in translation. It didn’t help matters that, until recently, managers and investors were often using different systems and metrics for financial reviews. The outcome was stale information, an incomplete portfolio understanding, and a burdensome reporting process for both the investor and operating partner.
“A lot of the complications come from the fact that most portfolios are a complex blend of partnerships, funds and managers, resulting in different data types siloed in different locations,” Justin tells Bisnow. Large institutional portfolios in particular are incredibly fragmented.
That’s why managers have to realize the need for sophisticated data and reporting systems that can provide investors with “one streamlined flow of information, allowing apples-to-apples comparisons across their multifamily assets” and enabling automated data collection from their operating partners.
In fact, through proper modeling, reporting and analysis investors can gain a better insight into what their property managers actually do—using it as a report card—and can make the interactions and collaborations between the two parties simpler and more effective.
Justin says these “data-focused conversations” may seem simple, but have been “historically unattainable.” But now, by starting each conversation referencing the same data and analytics, management can be more proactive.
But, one has to wonder, could a constant ability to dial in on metrics bring investors’ performance expectations to unrealistic levels or encroach on their operating partners’ management expertise? Justin thinks this is unlikely. Providing easily accessible and comprehensive information increases the effectiveness of all stakeholders—both owners and managers.
Not only does it enhance transparency and, in turn, accountability, but it also creates stronger information flows, which allow both managers and owners to identify trends and best practices together through working within the same data sets. In addition, through automation, technologies like Rentlytics unlock time historically spent on aggregating and validating the mountains of reports that come from any portfolio. This all allows stakeholders to focus squarely on their investments, Justin says.
In fact, the changing relationship made some institutional investors steer away from self-managed assets in order to get the local expertise, market cycle flexibility and scalable investments that a third-party manager can provide.
And as multifamily continues to attract new investors and property managers grow in sophistication and capability, technology will form the backbone of the evolving relationship between the two.
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