Homework answers / question archive / SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Real Estate Asset Management Course Project Instructions: Working through this project, you will practice critical asset management skills through the development of parts of an Asset Management Strategic Plan for the property you identified in the activity “What is Your Asset Manager Style” at the beginning of the course

SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Real Estate Asset Management Course Project Instructions: Working through this project, you will practice critical asset management skills through the development of parts of an Asset Management Strategic Plan for the property you identified in the activity “What is Your Asset Manager Style” at the beginning of the course

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SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Real Estate Asset Management Course Project Instructions: Working through this project, you will practice critical asset management skills through the development of parts of an Asset Management Strategic Plan for the property you identified in the activity “What is Your Asset Manager Style” at the beginning of the course. In Part One of the project, you will perform a SWOT analysis for the property you identified. You will consider both internal and external factors that impact the property and determine the appropriate quadrant for each factor. In Part Two of the project, you will develop an annual schedule for the meetings and other activities you would engage in as the property manager of your property. In Part Three of the project, you will envision a value enhancement project for your property that results in a better, more creative use of the space and increases revenues. In Part Four of the project, you will consider the appropriate hold period for your property and identify potential triggers that might necessitate a change in that strategy. Based on this analysis, you will also devise an exit strategy for your property. Once you have completed all four parts of the project, submit this project document and any supporting documents to your instructor for grading. A Submit button can be found on the Part Four assignment page. Information about the grading rubric is available on any of the course project assignment pages online. Do not hesitate to contact your instructor if you have any questions about the project. 1 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Part One – Conducting a SWOT Analysis Before you can set appropriate strategies for a property, it is important to perform a thorough analysis of the strengths, weaknesses, opportunities, and threats of the building. This information is included in the Asset Management Strategic Plan and will inform strategic decisions made about the property. In this part of the project, you will perform a SWOT analysis for the property you identified earlier in the module. 1. Using the template on the next page, brainstorm relevant factors for your property in each quadrant. Ideally, each quadrant should have two or more factors and you shouldn’t have more than 15 factors total. You may want to refer to the SWOT analysis tool for typical factors that are relevant in a SWOT analysis. Note: If you are actively working with this asset as part of your job, you can include your co-workers or members of the property management team in your brainstorming exercise. 2. Identify two factors from different quadrants that you think are most critical. Provide a brief analysis of these factors (150-300 words total) that discusses why each factor is important to the property and strategies for capitalizing on it or overcoming it, depending on whether the factor is a strength/opportunity or weakness/threat. 2 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Strengths Weaknesses • What do you do well? • What could you improve? • What unique resources can you draw on? • Where do you have fewer resources than others? • What do people in your market see as your strengths? • What are people in your market likely to see as weaknesses? Opportunities Threats • What good opportunities can you spot? • What obstacles do you face? • What trends can you take advantage of? • What are your competitors doing? • How can you turn your strengths into opportunities? • Could any of your weaknesses seriously threaten your business? 3 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University SWOT Analysis Identify two factors from different quadrants that you think are most critical. Provide a brief analysis of these factors (150300 words total) that discusses why each factor is important to the property and potential strategies for capitalizing or overcoming each one. Factor Analysis 4 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Part Two – Planning the Annual Asset Management Activities To be an effective asset manager, you need to gather information about a property on a regular basis so that you can monitor performance and identify potential issues. Being thoughtful and proactive in your communications with the property management team is critical to developing a positive working relationship and making the most of your interactions with them. In this part of the project, imagine that it is the beginning the year and you, as the asset manager, are updating the Asset Management Strategic Plan and scheduling the meetings and activities with the property management team for the coming year. While this might seem like a straightforward exercise, it is critical for both the asset manager and the property management team to plan for these meetings, thinking strategically about when to have them and what topics to cover. Because there are many people involved in these meetings, being proactive when scheduling the meetings is key. Complete the table below, considering all the meetings or other activities you would have throughout the year with the property management team. You should include at least 3 different meetings or other activities. We have completed the first row as an example for you. Meetings/Activity Capital Expenditure budgeting When will activities occur Topics covered Annual meeting to occur Projects to be approved in upcoming annual capital expenditure in July (or mid-fiscal year) budget (major renovations, large equipment, etc.) (See Read page in Module 3 for full description of activities) 5 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University 6 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Part Three – Envisioning a Value Enhancement Project The primary goal of the asset manager is to create or grow the value of the asset. To achieve this objective, a common strategy is to apply the “highest and best use” principal. This strategy encourages the asset manager to transform spaces within the building to increase the revenue they generate. In this part of the project, you will apply this strategy to the asset you identified at the beginning of the course. To generate value enhancement project ideas, review the results of the SWOT analysis you performed earlier for this property. Consider competitors and determine if these buildings have creative amenities or other ideas that you could implement. Ask yourself the question: if money were no object, what would I do in this space? Write one page (~300 words) that describes the value enhancement project: • Include a thorough description of your project idea. You can include photos of the space if this will help your explanation. • Provide a rationale for your project based on the revenue or other benefits you think it will generate. You don’t need to include specific revenues or ROI values but you should discuss what you think the impact to revenue will be. • Describe your first few steps in implementing the project. 7 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. SHA586: Optimizing Asset Management Strategies SC Johnson College of Business, Cornell University Part Four – Planning the Hold and Exit Strategy The hold and exit strategy usually result from a combination of the overall real estate strategy of an owner and the specific characteristics of an asset, such as the stability of the market, prospective cash flow, and future capital expenditure needs. How long an owner plans to own an asset impacts many decisions around maintenance and renovation expenditures. In this part of the project, you will formulate the hold and exit strategy for the asset you identified earlier in the course. Focus your analysis on the specific characteristics of the asset, not on the real estate strategy of the owner (unless you have specific knowledge about the strategy). If you are not that familiar with the asset, you can make some logical assumptions about the asset if you make these assumptions clear in your analysis. Write ~300 words that describe your hold and exit strategy, including the following: • • • • • Will you hold your asset for the short-, medium-, or long-term and why? Consider things such as: o Neighborhood dynamics and changes to demand generators o Competitors and any expected changes o Asset condition and potential renovation needs Explain the rationale for the strategy, considering market and operational conditions. Provide a brief description of some of the activities you would potentially plan to execute during the hold period to maximize the value of the asset (for example, renovations, maintenance, repositioning, rebranding). Provide explanations for two triggers that could occur that would change your hold strategy. Describe two activities you would perform to prepare this asset for sale. 8 © 2017 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.