After a challenging 2023, there are signs of an improving environment for real estate in 2024.
With rates expected to fall, the scene is being set for investors to increase their exposure to the sector in search of more attractive returns. However, the market environment remains challenging, particularly for small and medium-sized firms, who have suffered from the perceived ‘flight to quality’ that favored the largest, best-known names.
Insight, preparedness, focus, flexibility, and timing will all be vital to make the most of emerging opportunities, while efficiency will be essential to maximize profitability. In this respect, leveraging the capabilities of a specialist third-party real estate fund administrator has a host of advantages.
Resolving staffing and resourcing issues
Tight labor market conditions make recruiting and retaining high-quality real estate investment professionals a constant challenge. Outsourcing to a high-quality provider puts your fund administration in the hands of a dedicated and flexible team of diligent experts, eliminating the ongoing challenge of recruiting and retaining an in-house team.
Keeping up with innovation
Technology to automate fund administration is evolving at an accelerating rate. AI’s ability to rapidly analyze huge data means it already plays a pivotal role in transaction monitoring; increasingly, generative AI will be implemented across tasks including data management, reporting, client profiling, customer experience, cybersecurity, forecasting and even decision making. Third-party administrators can use their scale and relationships to give you access to the latest technology at a low-cost while minimizing integration issues.
Meeting regulatory requirements
The investment industry is highly regulated. With that regulation constantly evolving, real estate funds face a growing reporting burden, along with a constant challenge to stay on top of the latest rule changes. Partnering with an administrator with the requisite experience and resources to monitor and interpret regulation can help you remain compliant and removes the compliance headache for GPs, freeing your team to focus on their core role.
Accessing new markets
With real estate funds facing strong competition for capital from both inside and outside the sector, one way to access new clients for your firm is to expand into new areas. Working with an experienced fund administrator that already has a presence and relevant connections in new geographies, sub-asset types and investor segments can be invaluable to maximize opportunity while minimizing risk.
Addressing the cybersecurity threat
Investment firms have a legal responsibility to keep sensitive client data safe. With cybercrime rapidly evolving in terms of both scale and sophistication, working with a high-quality fund administrator that understands the threat both ensures compliance and reduces risk.
Delivering for clients on environmental, social and governance (ESG)
For US-focused real estate funds, Opportunity Zones provide a powerful way to deliver for clients on ESG and impact investing goals. A specialist provider can offer you a bespoke solution for Opportunity Zones fund administration that streamlines the complicated tax and administrative requirements while ensuring investments deliver on their intended ESG impacts.
Partnering with the right third-party provider will give you access to a dedicated team of experienced staff, ensuring your ongoing fund administration is in safe hands while everything is in place to ensure transactions reach completion, whatever the timeframe. A high-quality administrator will be able to deliver highly specialized support to assets held in structures ranging from active large developments to dry single tenant investments, and covering uses from industrial, retail, hotels and office space to student housing, care homes, residential and mixed use.
JTC has been involved in the real estate space for 35 years and has over US$54 billion of real estate assets under administration. We provide the highest standard of professional fund administration, accounting, and investor reporting services to our clients.
To find out how JTC can help your business, get in touch with Todd directly by filling out the below form.
