Recently, a lot of our clients have been asking about MRI’s Investment Management module. Since investment management software solutions can potentially cover a wide range of functions, it’s no surprise that real estate investment firms with a broad range of assets under management (AUM) are inquiring about this powerful tool.
The Complexity of the Investment Management Software Space
Property management software is easy to define. While there are differences between the major players, they each offer the same core components: Accounts Payable, Accounts Receivable, Lease Management, Work Orders, etc. All of these sub-ledgers feed into reports and populate the General Ledger. When you’re shopping for property management software, most property managers know what they are looking for. It is rare that we run across property management companies that still use home-built products or attempt to manage significant square footage with Excel.
The investment management software space is another animal. If you Google “real estate investment management software,” one article that pops up says that Microsoft Excel is the #1 Real Estate Investment Software Program. The other nine offer a mixed bag of functionality, from customer relationship management (CRM) to analytics to modeling to calculators. Our experience confirms that many companies continue to manage millions or even billions of dollars of real estate assets using complicated, home-built Excel spreadsheets. The functions they drive using Excel include investor contact management, fund accounting, contributions and distributions, waterfall calculations, valuation, performance, and debt management.
Many real estate investment companies are beginning to explore software that will enhance efficiency, accuracy, and transparency. But navigating the options can be a challenge. “Investment management” can mean completely different things depending on which software vendor you ask. REdirect can help you navigate this convoluted space by creating an inventory of functions that you currently execute manually, determine where you spend the most time (and where you are therefore most likely to make errors), and then evaluate which software packages can help you automate those functions.
Investment Managers, Meet MRI
MRI, which has long been one of the most powerful, flexible, and popular software solutions for property managers, also offers a robust real estate investment management solution. MRI’s Investment Management suite includes the following components: Global Property Valuations, Global Asset Management for Portfolio Valuations, Property Debt Management, Fund Modeling for Risk Management and AnalytiX Business Intelligence Portal Reporting. The suite extends from a single property view through to complex portfolio and fund modeling, inclusive of partial ownership structuring and complex debt modeling.
MRI’s investment management capacity leapt forward in 2015 when it purchased Cougar Software, a company with over 20 years of experience building custom valuation, asset management, and budgeting solutions for clients around the globe. They have since focused on standardizing this functionality into the configurable solutions listed above as part of an effort to bring the greatest value to the largest number of clients and fill what they see as gaps in the investment management software marketplace.
One of the more compelling components of MRI’s Investment Management solution is the Global Property Valuations module, which forecasts cash flows and value for the most complex of commercial assets. It allows users to pull in existing rent rolls easily via Excel and add market lease assumptions. Multiple “what if” scenarios can be created and applied to analyze changing market conditions. Given Cougar’s long history of working with international clients, this out-of-the-box offering can accommodate many global methodologies such as Discounted Cash Flow, Capitalization, Cost Method, and Term and Reversion.
Other important features include mobile compatibility and an extensive report library.
You’re Not Alone
Navigating the complex contours of the investment management software space can be a tricky undertaking. The MRI Investment Management solution is just one (albeit powerful) platform that is proving to work for a variety of real estate investment firms looking to increase their efficiency and productivity. If your firm is growing along with the size of your AUM, it may be time for you to explore this space, too.