The 5 Building Blocks of the Next Big CRE Firm
The 5 Building Blocks of the Next Big CRE Firm
If you’ve clicked on this article, it likely means you want to know what it takes to be the next sensation in commercial real estate development and management.
Taking your firm to the next level is about strategy and cumulative effects — not a genius fix in any one area.
To effectively grow our businesses, we need an integrative approach that leverages our team’s aggregate skills to create a synergy of functional areas that strengthens our brand, value proposition, and decision-making capability.
The results are improved project outcomes, greater access to capital, and more opportunity.
Naturally, a future that promises these effects is too good to pass up. So, let’s look at five areas that work together to help you scale.
1. Sufficient capital
Not much can happen without sufficient funding.
It is the centerpiece of a successful CRE operation and requires a concerted team effort and strategic planning to fill and maintain the capital pipeline.
So essential is raising funds that it’s both the direct and indirect objective of all our dealings. The following factors we’ll discuss are all intrinsically tied to and support generating capital.
1a. Demonstrating strong performance
To prove that we know what we’re doing, we need to show that we can deliver results. That said, how do we prove we possess that expertise and the potential to come through, rain or shine?
A principal point here is, we must leverage data to build a strong case for investment in our enterprise.
While other factors are important, as we’ll see, at the end of the day investors want quantitative, empirical evidence that we can generate a stable and satisfactory ROI.
To efficiently and consistently accomplish this, we need systems that monitor and collect data — across our enterprise — for acquisitions, revenues, operating costs, and more.
With centralized and organized data, we can quickly generate reports to incorporate into our pitch decks. And with those insights, we can make better decisions, which will further demonstrate our capability and expand our portfolios.
1b. Data-driven decision-making
Business, like life, is a series of decisions.
Although we’re all prone to a few errors and hiccups along the learning curve, a conscious effort to leverage data and think critically enables us to consistently improve the quality of our decisions.
Fortunately, data is abundant, and with the right technological tools — and human insight — we can make choices that yield a net positive effect on the value of our businesses.
We’ve mentioned ‘data’ a few times up to this point — and we’ll do so a handful of times more — for good reason.
Investors respect data-driven decision-making and the informed projections we’re able to offer based on evidence rather than conjecture or intuition.
Though there is something to be said for experience and gut feeling, in the high-stakes field of commercial real estate, we have to balance intuition with the scientific method.
1c. A strong brand and marketing
Data is crucial, but it’s not enough to differentiate from our successful competitors — and there are many vying for our investors’ capital.
Inspiring faith in our brand is the other side of the data coin to make a unified differentiator. Trust emerges from a combination of proof and an alignment of values and personalities.
Consequently, we need to build a marketing system and web presence to tell our story and share our values. An effective value-expression strategy incorporates a compelling website, social media, thought leadership, and public relations.
Aside from the pragmatic need to generate leads, we use effective marketing to position our brands and executives as credible experts in the field and to illustrate what drives us and how we act with integrity.
Through this process of engaging with our target market, we gain a better understanding of our prospects and use that insight to refine our value propositions and messages.
The outcome is an alignment of values and expectations with investors and other stakeholders, which allows us to attract capital and talent — and take our firms to the top.
1d. An excellent management team, staff, and strategic partners
We saved the best — and most crucial — for last.
Your team, including yourself, is your most important asset. The people behind your organization are where your brand’s true value lies. There is no data collection or interpretation without the keen minds to plan, organize, implement, and monitor these measures.
Additionally, trust is built not only on fact but also on a sense of rapport. In your pitches to investors and other partners, highlight the experience and personality of the members of your team.
Then, demonstrate how the unique capabilities and track record of each team member coalesce and resonate to create synergistic value that is greater than the sum of its parts.
Skip the growing pains
Rather than struggle through the growing pains, leverage the advice in this article to accelerate your growth. Rapid scaling starts with building your capital resources, showing your performance by the numbers, establishing a core competency in strategic, data-based decision-making, and conveying the value and personality of your team to forge trust.