Blog April 16, 2020

Navigating uncertainty with real estate Investment Management software

By Arik Kogan

The COVID-19 pandemic continues to create volatility in the market and impact the performance of real estate portfolios for investors, analysts, asset managers and fund managers. During uncertain times, Investment Management software and services can help MRI clients keep their finger on the pulse of change, stay in contact with investors and external stakeholders, and make adjustments to new processes and needs. Below are some Investment Management software solutions that can help.

Deferred Loan Payments: Debt Management

As debt service becomes increasingly challenging amidst the economic impacts of COVID-19 and we continue to see dips in operating income across multiple asset classes, borrowers and lenders alike may consider deferring loan payments. For users of MRI Debt Management, adjusting or deferring scheduled payments becomes a simple administrative task – the ‘Adjustments’ tab in the Loan Details allows you to adjust or override any calculated principal and/or interest payments, as well as fees and escrow charges. It will also recalculate the new forward-looking amortization/payment schedule as soon as the adjustments are entered, so you can review your future commitments once operations return to normal.

Assessing Refinancing Opportunities

For years, users of MRI Asset Modeling and Fund Modeling have been able to leverage the refinancing tools in these solutions to identify ideal refinancing opportunities and assess the impact of refinancing on key performance metrics. However, you may not have realized that Debt Management can also be utilized to support these kinds of decisions, especially in the current climate of reduced interest rates. Loans can be copied on the Loan Contracts list page and then flagged as “Speculative” to indicate that they are not executed contracts. Such speculative loans can then be manipulated with different terms, interest rates, and other relevant parameters to allow you to assess the viability of a hypothetical refinance and how it might positively impact your cashflow, without impacting reporting over your in-place contracts.

Investment Accounting: AP and Corporate AR Integration

As offices are closed in response to public health guidelines, many of our clients are facing the predicament of not being able to print paper checks or do mailouts. Thankfully, users of MRI Investment Accounting can leverage its integration with the MRI Accounts Payable and Corporate Accounts Receivable modules to facilitate automated banking transactions for both the receipt of contributions and the payment of distributions.

Investor Communication: Investment Central and Investor Connect

While MRI Investment Central is best known for its Asset Management reports and workflows, it is important to remember in these challenging times that the system has robust CRM and communication tools to support the dissemination of information regarding changes in the key performance indicators of investor portfolios. The Investor Connect portal provides 24-hour access to investor-specific data, but email communications can also be automated with templates and workflow-driven triggers. This empowers Investment Managers to communicate portfolio performance to their investors and add insightful notes to aid in buy/sell/hold investment decision making.

Strategic planning tools

For real estate firms with larger portfolios consisting of assets in multiple classes, regions, and investment structures, reforecasting portfolio-level strategic plans and assessing sensitivity to a prolonged period of market volatility can be an extremely daunting task. Users of Asset Modeling and Fund Modeling can mitigate this challenge by copying their base case model and using portfolio level scenario wizards to flex assumptions like interest rates, market rents, capitalization rates, inflation rates, and more across the entire portfolio. Refinancing assumptions and acquisition/disposition/development scenarios can easily be layered on. Don’t forget that a scenario model can become the source for a subsequent scenario, so you may continue to build model upon model to stress your portfolio iteratively and push it beyond previous optimistic/pessimistic outlooks in light of these unprecedented times.

Learn more about MRI’s real estate Investment Management solution.

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