NAREIM Data Strategy meeting: Key takeaways

May 12, 2022

How do you improve the performance of the asset? By introducing property manager scorecards that track not only asset and tenant performance but also a property manager’s missing data, ESG performance, deadlines and downtimes.

During the NAREIM Data Strategy meeting this week, members discussed one of the key challenges they face in understanding the trends and performance of deals and drive future changes – the data that comes from property managers. As the key element between investment teams and tenants, property managers are essential to asset, fund and portfolio performance and are becoming even more critical in relation to ESG reporting and performance.

But how do you drive improvements when data can often be found lacking? 

Introduce a scorecard and ranking system that can then be used during quarterly or semi-annual reviews with property managers where you compare their performance on key metrics against other property managers or rival organizations.

Members highlighted the key 6 categories of metrics they collect to track property managers, including:

• Tenant occupancy & retention – physical and economic, including rent payments & renewals, NOI, weighted average lease term (WALT), appraisals, tenant satisfaction

• Data exceptions (missing data), including lease abstract completion/time to enter lease data, NAICS code completion

• Meeting deadlines/downtime/turn times

• Lead vs lease/Stale deals report (90-days +)

• ESG and equitability

Members also discussed the key systems they use to track property managers, with Yardi, VTS and RealPage the three most commonly cited. 

To download the meeting presentations, including the data strategy issues top of mind and the Property Manager scorecard metrics, click here.

Consequences to poor performance? 

Members largely agreed the data was being used to incentivize behavior rather than threaten under-performing property management organization.

One member said, however, they had used their scorecard system to drive for a change in an individual property manager. “You can use this to say either lose us as a client or find someone to perform better,” the member said.

Another recommend against incentivizing property managers through cash bonuses. A pilot they had conducted with cash incentives meant only that the property managers logged on and logged off again. Instead they focused on the need for weekly reporting, which encouraged property managers to go into their reports, where mistakes could be caught.

Automation vs manual

Members were working on ways to ensure scorecarding was an automated process without the need for manual aggregation. One emerging strategy is for automatic data feeds to be delivered from systems such as VTS into Yardi.

Other key takeaways from the Data Strategy meeting in Chicago

• Top of mind for members is performance management and improving asset and deal reporting structures. Members discussed the need for real-time, data-driven performance reporting tools that understood the regional nuances of real estate, with one member saying there was a “lack of high-fidelity data in benchmarks and the comp set”.

• Talent was the biggest area of concern after performance reporting. There is a growing need for new roles in the company but there is a lack of talent generally in the market. So how do you attract talent to private real estate? And how do you get the buy-in? Post-Covid members also asked whether firms would increasingly outsource data strategy or keep it in-house?

• Data utilization and data demand. Demand for data is growing but it needs to be more and embedded across the entire organization, not just in the hands of the data-savvy. Tenant-level data is the biggest challenge facing managers

• There is no clear-cut winner in the data analytics platform war

• Vendor-led integration is desperately needed in the industry

To download the meeting presentations, including the data strategy issues top of mind and the Property Manager scorecard metrics, click here.