March 2023 | Asset Management Memo

By Investor Relations | Education

Asset Management is responsible for executing a business plan by following a consistent
strategy to achieve the property's goals and meet the investor’s objectives. Here are the key steps
an Asset Manager takes to execute a business plan:

Review & Implement the Business Plan

1. The first step in executing a business plan is to review it to ensure it is still relevant and feasible, given current market conditions. This process involves analyzing the property's financial and operational data, identifying any changes since the plan was developed, and assessing whether any modifications are required to achieve the financial goals. Implementing the business plan starts with renovating units, improving amenities, or upgrading systems to increase the property's value and attractiveness to tenants.

2. Identify and Track Key Performance Indicators (KPIs)Asset Managers identify and track KPIs aligned with the business plan's objectives. For example, most of our business plans aim to increase rental rates through renovation premiums or capturing large loss-to-lease. We track KPIs such as vacancy rates, new lease rent growth, competitor rent, and renewal acceptance rates. Analyzing data from these KPIs, asset management will look for root causes of underperformance or long-term drivers of outperformance. An increase in new building deliveries or a significant employer establishing itself in the area are examples of supply and demand shifts that may affect our business plan.

3. Adjust the Business Plan: As the property moves through its repositioning phase, Asset Managers will closely monitor weekly invoices, financial reports, and conduct budget variance reviews with the property managers. Weekly calls are scheduled to review and adjust rent pricing based on leasing velocity and occupancy rates. Marketing budgets, rent concessions, or upgraded amenities like in-unit washers/dryers are areas Asset Management may adjust to meet the business plan.

4. Report to Investors: Finally, Asset Management will regularly report to investors through quarterly webinars and investor reports. We aim to provide timely and accurate information regarding the property’s progress and strategies for overcoming shortfalls and maximizing gains.

By following these steps, an Asset Manager can effectively monitor performance and make adjustments to meet the goals of the business plan. This will help ensure that the property is managed to maximize its value and deliver strong returns to the investor.


As always, the entire Clear Capital team thanks you for your continued trust and confidence in our team, and we wish you well on your investing journey.