“Every man has his breaking point.”
– Ellis Boyd ‘Red’ Redding, The Shawshank Redemption
We at Pereview believe the same as many of you believe – Excel is the world’s best modeling software, but also the world’s worst database. Previously, we’ve addressed the reputational and operational risks of real estate investment managers using Excel, but what does Excel Hell really mean? Why does the real estate industry continue to stay with the Excel Hell status quo?
Most real estate investment management firms are receiving monthly and quarterly financial and operational data from operating partners, JVs, and Borrowers in PDF and Excel. Even companies who are running property management in-house with their own PM/GL software all still allocate numerous employees and man hours to manually convert and extract the necessary data. Then that data is entered into another series of Excel spreadsheets to drive decisions around asset management, portfolio management, reporting, valuation models, annual business plans, amortization schedules and more. Every firm also has those roguish one-off spreadsheets that circumvent their traditional processes to answer a question the way someone wants it to be answered in the first place. Still, repeated errors, unfortunate miscalculations, missing data, and the world famous #REF occur throughout the process. And guess what? Investor and key stakeholder reports haven’t even been assembled yet, which will require more bodies and more hours because they have questions from the property level that still need answers.
What can you do? Escape, of course!
Pereview is built by real estate veterans who have lived these troubles firsthand and have developed a software platform to address this. Other vendors who think they have a solution to your problems have never experienced the long late hours, night after night, struggling through it all.
I spoke recently with the head of asset management for a client firm in Southern California that manages four opportunistic funds across all asset classes with an AUM of almost $2B.
When did you finally say it was time to escape?
She responded by saying, “Once we topped $1B in AUM years ago, we swore we would start looking into more efficient ways to manage our property level info received from, at that time, a handful of select operating partners on 2 different PM/GL systems. Then as you can guess, we got busy, we got so overwhelmed, that we just threw more and more employees at the ever-growing problem. ‘Excel is free,’ we told ourselves, never thinking of what the grind was truly costing us. Then suddenly, we almost hit $2B in AUM where we needed even more processes in place only to realize we are almost at a point of no return. Mistakes were being made and the grind was too much to continue to ignore. We learned about Pereview from an industry peer that had come across you at a NAREIM event and we reached out to learn more. The rest is now happily just history as we are so much more efficient now from property through to the fund to our investors.”
How did Pereview create an escape for you?
She replied, “Pereview connects directly to our now 11 operating partners Yardi, MRI and Entrata platforms pulling all of our data automatically into our user, property, and portfolio dashboards. Our reports are automated and trusted because all data is clean. We focus on enhancing the property’s value and driving returns now without interruption. The grind is over. But it is far more than just data aggregation and collection, we now have all of our data in one location which we never dreamed was possible in real estate.”
Rapid ejection from Excel Hell.
In speaking with another client firm in Chicago managing almost $6B in AUM across multiple value-add and opportunistic funds, their head of portfolio reporting stated they quickly hit the famous easy button – rapid ejection style from Excel Hell by implementing Pereview with Data Management Services. He said, “It was a no brainer for us to engage Pereview and their team of real estate professionals who know and understand the intricacies of a trial balance with variances and rent rolls to not only receive but to also collaborate with our operating partners on ensuring quality, accurate data is received month in and month out, freeing up our team to do what we do best in making our next strategic decision based on our past and present data with forward looking assumptions.”
What are the immediate indications of ROI by implementing Pereview?
He simply responded with, “The fractional amount of money we pay for Pereview’s professional Data Management Services as opposed to what a handful of full-time employees would cost is amazing. It is probably our most successful investment, outside of our properties of course. Excel usage has been greatly diminished and replaced with Pereview custom reports built to my requirements. In fact, I think we only use Excel for our modeling now, which Pereview also connects to.
Now that you know there is an asset management platform designed specifically for you giving you an opportunity to also escape from Excel Hell, the entire Pereview team looks forward to seeing you, Andy and Red in Zihuantanejo! Give us a call for directions. We will have the chess board ready.