In the world of real estate investing, decisions are sometimes made by the gut as much as the brain. But successful, long-term investments have to be backed by data, actionable intelligence, and Key Performance Indicators (KPIs). High-performance investment teams have to quantify their progress and be willing to adapt according to the data.
BPM recently compiled a list of the top KPIs that real estate investors should consider and separated them into three categories:
- Speed
Patience may be a virtue, but in CRE investment, time is of the essence. KPIs such as ‘Hours per initial pursuit decision,’ ‘Days per approval,’ and ‘Days per closed deal’ can track the efficiency of your workflow and communication.
Investment firms are increasingly leveraging CRE technology to streamline their deal flow, and, ultimately, save time. Centralized deal information and pipeline tracking, along with well-engineered user-interfaces have shown to be some of the most effective methods to increase your deal speed.
- Accuracy
When evaluating multi-million-dollar real estate deals, investment teams have to work with accurate, up-to-date information at all times. Important metrics to track over time include ‘Number of versions per presentation,’ ‘Number of Internal Rejections,’ and ‘Total value change from initial underwriting to final offer.’
CRE investors and developers have more data than ever, but with more data come more opportunities for errors. Maintaining good data hygiene, following best practices for security, and working with reputable service providers will help maintain the integrity of your data.
- Adaptability
The commercial real estate market can be unpredictable at times. Financing rates and access to capital can fluctuate with the economic and political landscape. Adaptability is the key to remaining resilient in the face of a tumultuous environment. While adaptability can be difficult to quantify, the ‘Number of open APIs or connectors’ can serve as a valuable KPI.
In addition, investors should make checklists to evaluate their mobile capabilities and the UI of potential technology solutions. Features to look for should include integrations, mechanisms for collaboration, and a promising product roadmap.
We live in a data-driven age, and CRE investing is no exception. By tracking these KPIs and altering your strategy based on the results, you can optimize your investment portfolio and streamline your deal management process.
To read more about the top KPIs for savvy real estate investors, be sure to check out the full article by BPM.
