How do you convert Real Estate Management to a menu offering?

[Abdul Azeez]

Folks - I just wanted to bounce around some ideas and obtain some input. Some of this has been from my own work related experience and some from general life experiences. When you acquire a property there are several components:

1. Acquisition

2. Rehab

3. Leasing

4. Management - Day to day operations inclusive of maintenance

5. Re-leasing

6. Selling when needed

I work within Investment Asset Servicing area in Financial services and want to offer some parallels to my work area. In my line of work, it is very rare to find one service provider on the mutual fund or investment management side to have all business related functions like trading, settlement, accounting, custody etc. done under the same organization or outsourced to the same organization. Usually you would find a prospective client select from best of breed for servicing, as in they may select someone for custody versus another firm for shadow accounting versus another one for managing their middle to back office operations (reconciliation, settlement etc.). This in addition to minimizing risk for a client by not having single points of failure also helps in assembling a menu of best of breed providers across the spectrum. 

What are your thoughts around a similar model for REI? I believe acquisition and selling are already separated out in the above but rehab through re-leasing is typically done by the same firm who manages the property. Do you think a better model would be to pick best of breed providers across each category above and create an individual portfolio of components that can be mixed and matched? In the longer term do you think this would help the industry stay more competitive, minimize risk and offer the best value for clients? Some of the advantages I see are it enables firms to focus on their core competencies. Like for example someone may be a rock star manager in managing the property but may not have the same level of skills on the leasing side. By separating out, you are enabling folks to focus on what they do best and increase the core competency.

The above is just a hypothetical discussion to obtain ideas to expand the learning experience. So, it will be helpful if we treat the above just an intellectual exercise and have some ideas to share.

Regards,

Azeez