Nomenclature, Scope of Service, and Interfaces of Real Estate Investment-, Portfolio-, Asset-, Property and Facility Management based on the “Basic Concept

Nomenclature, Scope of Service, and Interfaces of Real Estate Investment-, Portfolio-, Asset-, Property and Facility Managementbased on the “Basic Concept of Real Estate Management”

Dr. Annette Kämpf-Dern, University of Applied Sciences AschaffenburgProf. Dr. Andreas Pfnür, Technical University DarmstadtERES 2010Thursday, 24.06.2010

© Annette Kämpf-Dern, Prof. Dr. Andreas Pfnür: ERES 2010 Seite 2

Agenda

Real Estate Management – The Basic Concept Structures REM

Management Levels and Perspectives – Nomenclature and Concepts

Investment-, Portfolio-, Asset-, Property- and Real Estate Facilitymanagement – Scope of Services and Interfaces


Agents,Consultants, Appraisers, Banks, Building Companies, …

Technical/infra-structural service companies, Accountants, Agents/Broker,

Marketing Agencies,

…

Agents,Consultants,

Appraisers,Demolition

Companies, …Owners/Users

… but this is changing rapidly – Problem Definition

Needs determination, Due Diligence, Financing, Acquisition, Project Development, (Re)Construction

Operation, Maintenance, Letting, Refurbishment,Modernization

Sales,Recycling,Redevelopment

Execution of Real Estate Lifecycle Tasks has Long Been Done by Owners/Users Themselves …


Property- & Real Estate Facility Management (Operative Object Management)

Project Development & Real Estate Asset Management

(Strategic Object Management)

Real EstatePortfolio Management

InvestmentManagement

With Deconstruction of Activities,How are They Going to Be Managed Optimally? Change of Management Levels in the Real Estate Business

Real Estate Management (REM) Planning/Developing, Organising, Steering/Coordinating, and Controlling

Real Estate Activities

Strategic REM

Real EstateActivities(Core Processes)

RecoveryUsage/OperationConception/

Supply

Object Management

Investment- &Portfolio Management

Operative REM

Specialization and Deconstruction of Activities Results in Higher Needs and Specialization of Management


Overall, Three Perspectives Have to be Considered

in Real Estate Management …

e.g. Project Management,

Construction Management

e.g.Institutional-InvestmentReal Estate Management

RealEstate

Management

e.g.Public /

Corporate Real Estate

Management

… which guide level-spanning management concepts

RealEstate

Management


Basic Concept of REM with 3 core and 2 situational dimensions

Real Estate Life Cycle

Co

nce

ptio

n/

Su

pp

ly

Usa

ge

/O

pe

ratio

ns

Re

cove

ry

Corporate/Investment

Level

PortfolioLevel

ObjectLevel M

ana

gem

ent

Lev

els

TechnologicalReturn-oriented

Use-oriented

Perspectives

Source: Kämpf-Dern/Pfnür (2009), S. 14

Planning

Orga-nisation

Steering

Control-ling

Rea

l Est

ate

Lo

cati

on

Rea

l Est

ate

Seg

men

t/T

ype

Integrative View is Demonstrated Best by a Cube That is Apportionable as Necessary


Agenda





Life Cycle

PerspectivesMan

agem

ent

Lev

els

Individual, Situational Configurations Impede Universally Valid Definitions, but …

… within blurred borders consistent statements can be made

Real Estate Perspective

Real Estate Management (REM)

Return-oriented REM Use-oriented REM

Investment/Corporate

Level

PortfolioLevel

ObjectLevel

Real Estate Services (RES)

Real Estate Asset Management (REAM)= Strategic Object Management

Operative Object Management (OOM)

Real Estate Investment Management (REIM)Investment decisions focusing on aspects of

risk-return-liquidity relevance for production/service providing

Property Management (PrM)Investment-Orientation

(Operative) Real EstateFacility Management (REFM)

Usage-Orientation

Real Estate Portfolio Management (REPM)Structuring the portfolio to optimize

risk-return-liquidity production/service providing

Ta

rge

t-o

rie

nte

d c

oo

rdin

ati

on

an

d v

alu

e-m

ana

ge

me

nt

Ta

rge

t-o

rie

nte

d c

oo

rdin

ati

on

an

d v

alu

e-m

ana

ge

me

nt

Source: Kämpf-Dern (2009), S. 17


Real Estate Perspective

Real Estate Management (REM)

Return-oriented REM Use-oriented REM

Cor

pora

te R

eal E

stat

e M

anag

emen

t(C

RE

M)

Pub

lic R

eal E

stat

e M

anag

emen

t(P

RE

M)

Priv

ate

Rea

l Est

ate

Man

agem

ent

REAM/SOM

OOM• PrM• REFM

REPM

RES

REIM


Level

PortfolioLevel

ObjectLevel

....

Non

-Pro

fit-/

Non

-Gov

ernm

enta

l O

rgan

izat

ions

Rea

l Est

ate

Man

agem

ent

Rea

l Est

ate

Inve

stm

ent M

anag

emen

t(R

EIM

)

Ta

rge

t-o

rie

nte

d c

oo

rdin

ati

on

an

d v

alu

e-m

ana

ge

me

nt

Ta

rge

t-o

rie

nte

d c

oo

rdin

ati

on

an

d v

alu

e-m

ana

ge

me

nt

„IIREM“ and „CREM“ Currently are the Predominant Management ConceptsMore and more others are developing – orientation needed

Inst

itutio

nal I

nves

tmen

t RE

M(I

IRE

M)


Agenda





On Each Management Level: Managing Lower Level, Advising Upper Level, Decisions & ControllingScope of tasks on each management level

Real Estate Perspective Return-oriented REM/Use-oriented REM

REAM/SOM

OOM

REPM

RES

REIM

Ta

rge

t-o

rie

nte

d c

oo

rdin

ati

on

an

d v

alu

e-m

ana

ge

me

nt

Ta

rge

t-o

rie

nte

d c

oo

rdin

ati

on

an

d v

alu

e-m

ana

ge

me

nt

Rechnungsw

esen und Reporting

Investment Planning&

Portfolio Target Setting

Investment Decisions& Controlling Service Providers

InvestmentResults

Controlling

Portfolio Planning&

Object Target Setting

Portfolio Decisions & Controlling Service Providers

PortfolioResults

Controlling

Advising REIM &Organizing Implementation

Measures/Action Decision & Controlling Service Providers

Action PlanningAction Results

Controlling

Advising REAM &Organizing Implementation

Object Planning&

Measures Targets

Object Decisions & Controlling Service Providers

ObjectResults

Controlling

Advising REPM &Organizing Implementation

Accounting &

Reporting

Concept/Supply &Recovery



Operations


Level

PortfolioLevel

ObjectLevel

Clarity on scope of tasks and responsibility essential for coordination and success


Ziel ist das Erreichenoder Übertreffen der vom REPM oder REIM vorgegebenen Ziele/

Beiträge für ein oder mehrere Objekte sowie die Identifikation von diesbezüglichen Wert- oder

Nutzungssteigerungs-potenzialen.

Result: Coherent Definitions and Tasks for Each Management Level Specified for Each Perspective

Real Estate Asset-management (REAM) is the

strategic management of real estate objects. REAM strives to

achieve the goals of a return-orientedinvestor or a user during the life

cycle phase of usage/operation and at the interfaces to conception/

supply, respectively recovery.

Source: Kämpf-Dern (2009), S. 22-26

REAM is supposed to accomplish or beat targets

set for one or several objects and to identify potential to increase

return for investors or users.

REAM develops strategies for real estateobjects and organizes & controls

implementation; deals with existing as well

as with prospectiveobjects.


Clear Definitions and Scope of Tasks Lay Foundation for Further ImprovementsTake-Aways

• Higher expectations from investors and users and a complex, globalizing world deconstruction and specialization of real estate core activities as well as real

estate management tasks.

• Nevertheless, need for an integrative view symbolized as a cube consisting of smaller management cubes, each with

dimensions of life cycle phases, management levels and perspectives.

• But Deconstruction leads to more and more interfaces arise between these cubes,

not only between jobs or departments, but even between companies.

• Clarity about the nomenclature and the tasks of REM is major preliminary for organization and coordination of interfaces.

• Organization and coordination of interfaces Questions of controlling, job design, personnel development, corporate culture, Solutions are crucial for reaching the targets connected to real estate activities.

A lot of interesting research questions wait to be answered!

Documents

Nomenclature, Scope of Service, and Interfaces of Real Estate Investment-, Portfolio-, Asset-, Property and Facility Management based on the “Basic Concept