The role of asset management is expanding well beyond traditional oversight responsibilities. Today’s asset managers are increasingly expected to act as strategists, operators, capital allocators, data stewards, technology advocates, and organizational connectors, as heard during NAREIM’s Asset Management Meeting held last week in New York City.
Whether the topic was expense optimization, acquisitions alignment, portfolio strategy, team structure, or technology adoption, the conversations consistently pointed to a profession that is becoming more central to investment performance than ever before.
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When asked to describe the role of an asset manager, responses ranged from "quarterback" and "value creator" to "operator," "problem solver," and "head coach." Others offered less glamorous but equally revealing descriptions such as "fire extinguisher" and "herder of cats."
Collectively, the responses reflected a growing recognition that asset management has become the function responsible for turning investment strategy into operating results.
"At the end of the day, somebody has to turn the business plan into reality."
Alignment Drives Results
A recurring theme was the importance of alignment between teams, incentives, systems, and objectives.
The expense optimization discussion challenged the traditional view that value creation comes primarily from negotiating lower costs. Instead, many firms are focusing on compensation structures that encourage the desired behavior from property managers, operators, brokers, and service providers.
Several firms described incentive-based structures tied to controllable NOI, business-plan execution, and performance thresholds rather than relying solely on fixed fees or percentage-based compensation.
"People generally do what they're paid to do."
The broader takeaway was that while fee reductions may create one-time savings, properly aligned incentives can drive performance throughout an asset's hold period.
Participants repeatedly emphasized that many operational challenges are not operational problems at all, they are incentive problems.
The Value of Constructive Tension
Many described the relationship between acquisitions and asset management as one of "constructive tension,” a dynamic that creates better decision-making when managed effectively. While disagreements are inevitable, most viewed them as a healthy part of the investment process rather than a sign of dysfunction.
Nearly two-thirds of firms in attendance conduct formal lookbacks involving acquisitions and asset management, and 70% believe those reviews are effective.
Interestingly, more than half acknowledged that the meetings can be contentious, reinforcing the idea that productive conflict often leads to stronger underwriting and better execution.
"If everyone agrees all the time, you're probably not getting the benefit of different perspectives.”
Many organizations described formal feedback loops that include 30-day, 90-day, annual, and post-disposition reviews.
These sessions are designed less to assign blame and more to evaluate assumptions, identify lessons learned, and improve future investment decisions.
Accountability Starts Before the Deal Closes
The discussion naturally evolved into a broader conversation about accountability. While some firms involve asset management early in the acquisition process, others engage the team only after pricing has largely been established.
- Nearly one-third of respondents indicated that asset management never formally signs off on leasing assumptions
- 29% percent involve asset management before best-and-final pricing decisions
- More than half of respondents said asset management is often perceived as overly conservative when reviewing underwriting assumptions
"If asset management's assumptions alone drove every decision, we probably wouldn't buy many deals.”
Yet many acknowledged that acquisitions teams benefit from the operational perspective asset management provides, particularly when evaluating leasing assumptions, operating budgets, and execution risk.
The healthiest organizations appeared to be those that create enough tension to challenge assumptions while maintaining shared accountability for outcomes.
The increasingly strategic nature of the asset management function was also evident in the discussion around hold-sell decisions. Participants repeatedly emphasized that disposition decisions are not fundamentally real estate decisions, they are capital allocation decisions.
"If we owned cash today instead of this asset, would we buy it again?"
That mindset reflects a growing focus on future return potential rather than historical performance. Capital expenditure requirements, refinancing risk, portfolio objectives, liquidity needs, and alternative investment opportunities are increasingly driving disposition decisions.
- Nearly 90% respondents require Investment Committee approval before a disposition can move forward
- Most firms establish minimum sale pricing before launching a marketing process
- Three-quarters indicated they would pause and reevaluate rather than sell if bids failed to meet expectations
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