Tag Archives: Real Estate Fund Accounting

With buildings contributing nearly 40% of global carbon emissions, sustainability is no longer optional but a business imperative. Making the thinking forward for real estate firms’ compliance is no more a regulatory obligation but a strategic advantage. Carbon credits allow the real estate firms to compensate for their greenhouse gas emissions. It is by investing in projects that reduce or eliminate an equal amount of carbon production. The shifting framework of the ESG structure is now observing a shift from a cost center to a growth driver for the real estate industry. Utilizing the major shift, integrating ESG frameworks, and leveraging carbon credits. They are projected to reach $50 million by 2030 (McKinsey), developers, along with asset managers, are turning regulatory pressure into financial upside.

How Real Estate Firms Are Acting

Real estate companies are shifting from ESG promises to real action by integrating sustainability into construction, operations, and financing, They are also addressing scaling gaps. Coping up utilizing embodied carbon by using low-carbon materials like green concrete and recycled steel. And this is also by retrofitting mature assets with energy-efficient HVAC, lighting, and insulation systems to lower energy consumption. To reduce the scalability of emissions, developers and REITs are becoming buyers of more high-quality carbon credits. They are backed by record transactions like JPMorgan’s 450,000-metric-ton CO₂ offset deal, highlighting the pace. Circular construction methods, including recycling demolition waste in new construction. They are gaining momentum to reduce resource intensity.

Global Investment Trends Shaping Real Estate Firms

Global Investment Trends Shaping Real Estate Firms

Meanwhile, leading players are joining net-zero tracks under the Paris Agreement, raising their attractiveness to investors. Around 57% of whom currently are making ESG-driven decision-making. The emphasis is coupled with reducing regulatory risk, fueling returns, and achieving green-certified buildings. They receive premium rents of 6–11% and up to 18% sales premiums. This illustrates that ESG adoption in real estate firms is also a driver of long-term market competitiveness.

Green Building Certifications

Green building certifications, including LEED, IGBC, and GRIHA, are quickly transforming the real estate arena by awarding credits to buildings for sustainable design, construction, and operation. More than 180 countries across the world have adopted LEED, covering over 100,000 projects that span 29 billion square feet, while India recorded 370 LEED-certified projects in 2024 across 8.5 million square meters.

IGBC-rated buildings in India number over 600, spanning 185 million square feet, achieving energy savings of 40–50% and water savings of 30–35%, with construction premiums cut down to just 2–3% and payback periods as low as 18 months. Aside from environmental advantages, green-certified buildings provide lower operating expenses, greater tenant satisfaction, and greater property values, which render them a regulatory or moral option but also a strategic benefit for real estate companies looking to prove their portfolios and attract investors and environmentally sensitive buyers alike.

Retrofitting Legacy Assets

Real estate firms are increasingly adopting retrofitting old buildings as a strategic means to make them more sustainable, energy-efficient, and lower their operating expenses. Through improved building systems, insulation, lighting, and HVAC systems, companies can increase the lifespan of their properties while achieving ESG targets.

Energy use can be cut by 30–40% via well-designed retrofits

Payback periods tend to be as low as 2–3 years

Retrofitted buildings make substantial utility savings

Tenant satisfaction and occupant comfort are significantly enhanced

High-profile instances demonstrate the effect: the Empire State Building cut energy consumption by 38%, saving more than $4 million a year, and other city buildings have cut up to 46% of their energy consumption. For real estate companies, retrofitting existing assets is not just an environmental commitment but also a smart investment that adds value to the property, reduces risk, and puts them at the forefront of green development.

Smart Infrastructure & PropTech

Real estate firms are translating ESG commitments into action in construction, operations, and finance. On the construction side, they are reducing embodied carbon through the deployment of low-carbon concrete, recycled steel, and sustainable wood. Some are embracing circular practices, like recycling demolition waste for use in new developments, to minimize material intensity.

On the operations side, ageing assets are being retrofitted with efficient HVAC, lighting, and insulation systems. This enhances energy efficiency and reduces emissions throughout property portfolios. To offset unavoidable emissions, developers are investing in carbon credits. For instance, JPMorgan bought offsets of 450,000 metric tons of CO₂, illustrating how carbon markets are becoming an integral part of real estate firms planning. On the funding front, companies are joining net-zero trajectories and ESG reporting norms to win over institutional investors.

Over 57% of investors around the world screen portfolios for ESG performance. The business case is powerful—green-certified buildings fetch 6–11% higher rents and up to 18% sales premiums. This establishes the fact that ESG in real estate is no longer compliant but a way to grow and a competitive edge.

ESG-Linked Financing

ESG-linked finance is growing fast in real estate firms as companies draw on green bonds, sustainability-linked bonds, and ESG-bound loans to finance climate-resilient and energy-efficient projects. Green, social, and sustainability bond issuance around the world reached $1.1 trillion in 2024, up 5% from 2023. Green bonds alone are still expected to hit $1.55 trillion by 2033.

ESG Finance Outlook for Real Estate Firms

ESG Finance Outlook for Real Estate Firms

In emerging economies, green bond issuance amounted to $137 billion cumulatively as of 2016 and accounts for 16% of the total labeled sustainable bond issuance. In Africa, ESG-linked property finance has expanded at an average annual rate of 41% since 2018. It is to reach a cumulative amount of $4.2 billion by mid-year 2024, with $1.3 billion emitted during the first half of 2024 alone. REITs in the U.S. have registered an increase in green bonds. While in India, Mindspace REIT collected more than ₹1,200 crore from two sustainability-linked bond offerings. One of which was a ₹550 crore transaction in 2025 under SEBI’s new ESG regime.

These tools benefit real estate firms not only by reducing the cost of capital but also by enhancing investor attraction, as capital markets are increasingly rewarding tangible progress towards sustainability targets.

Future-Proofing Real Estate Firms with ESG Integration

The subsequent stage of competitiveness among real estate companies will be characterized not by place or size. It would be by how integrated ESG is into strategy. Green buildings are already providing 10–21% value premiums and more resilient rental yields. They are also retrofitting mature assets can reduce energy consumption by up to 40% with paybacks in as little as two years. In India alone, more than 300 million square feet of aging inventory is a retrofitting opportunity of almost USD 4.5 billion.

On the other hand, non-conforming assets risk value loss of 20–30% as funding becomes expensive. Tenants seek out greener buildings. By embedding ESG into development, operations, and funding, real estate companies can turn compliance into resilience. There are also future-proofing portfolios while locking in long-term investor trust.

Magistral’s Services for Real Estate Firms

Magistral collaborates with real estate companies to enhance decision-making, maximize operations, and release investor confidence with the help of tailored research and analytics capabilities. Our solutions cater to the complete range of ESG, investment, and operational needs, defining the industry today:

ESG Research & Reporting

Creating frameworks for sustainability, designing ESG disclosures, and comparing performance with peers.

Financial Modeling & Valuation

Creating elaborate financial models for assets, portfolios, and REITs to aid in fundraising and investment choices.

Market & Investor Research

Monitoring trends in real estate markets, investor attitudes, and regulatory changes by geography.

Presentation & Deal Support

Creating investor-friendly pitch books, transaction materials, and deal analysis to drive capital raising faster.

Operational Outsourcing

Aiding operations like procurement analytics, portfolio tracking, and performance measurement for efficiency improvement.

Through the integration of deep domain knowledge with scalable implementation, Magistral assists real estate companies. It is in adapting to global sustainability agendas and remaining competitive in rapidly evolving markets.

 

About Magistral Consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates, and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modelling, Portfolio Management, and Equity Research

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

Nitin is a Partner and Co-Founder at Magistral Consulting. He is a Stanford Seed MBA (Marketing) and electronics engineer with 19 + years at S&P Global and Evalueserve, leading research, analytics, and inside‑sales teams. An investment‑ and financial‑research specialist, he has delivered due‑diligence, fund‑administration, and market‑entry projects for clients worldwide. He now shapes Magistral Consulting’s strategic direction, oversees global operations, and drives business‑development support.

FAQs

How does Magistral Consulting support real estate firms with ESG integration?

Magistral helps real estate firms design ESG frameworks, prepare sustainability reports, and benchmark performance against global standards, enabling them to attract investors and future-proof their portfolios.

How does Magistral enhance market research for real estate firms?

Magistral provides deep insights into real estate market trends, regulatory changes, and investor preferences across geographies, helping firms identify opportunities and mitigate risks.

Where is Magistral Consulting located, and does it serve global clients?

Magistral operates with delivery centers in India and serves clients across the U.S., Europe, the Middle East, and Asia-Pacific, offering true global coverage with a cost advantage.

Can Magistral assist in financial modeling for real estate investments?

Yes. Our team builds detailed financial models and valuations for assets, portfolios, and REITs, supporting real estate firms in investment analysis, fundraising, and strategic decision-making.

 

Introduction

In today’s fast-moving business world, mergers and acquisitions (M&A) are key strategies for growth, consolidation, and diversification. However, these transactions involve complex processes that require expert guidance. Accounting firms play a crucial role by providing insights and expertise at every stage. This article explores how these firms contribute to successful M&A deals.

Due Diligence: The Foundation of Informed Decision-Making

Due diligence is essential for making informed business decisions. Whether for mergers, acquisitions, or partnerships, it involves detailed investigations and careful analysis. This process ensures businesses understand risks and opportunities before proceeding, ultimately reducing uncertainties and enhancing strategic planning.

Comprehensive Financial Analysis

CPA Firms thoroughly review financial records, including balance sheets, income statements, and cash flow reports. This deep analysis helps acquirers assess financial health, performance trends, and potential red flags. Consequently, they gain a clearer understanding of the target company’s value and sustainability.

Risk Assessment and Mitigation

Beyond financial analysis, CPA firms identify risks such as legal liabilities, regulatory issues, and operational challenges. By evaluating these risks, they help acquirers develop mitigation strategies. As a result, businesses can safeguard their investments and ensure smoother post-acquisition integration.

Valuation Expertise and Fair Value Determination

Using financial modeling, CPA firms determine a target company’s fair value. Through discounted cash flow analysis and market comparisons, they ensure acquirers negotiate fair terms. This expertise prevents overpayment and aligns pricing with the company’s actual worth, facilitating well-informed investment decisions.

Regulatory Compliance: Navigating Legal and Regulatory Frameworks

Businesses must comply with regulations to operate legally and ethically. CPA firms help acquirers navigate complex legal frameworks, ensuring adherence to financial reporting standards and industry regulations. Their involvement reduces compliance risks and promotes transparency in transactions.

Adherence to CPA Standards and Regulations

CPA Firms guide businesses through standards such as GAAP and IFRS. They meticulously review financial statements and reporting practices to ensure compliance. This approach not only enhances transparency but also builds trust with stakeholders, investors, and regulatory bodies.

Tax Optimization Strategies

M&A transactions have significant tax implications. CPA firms design tax-efficient structures to minimize liabilities and optimize post-merger value. Their expertise in tax laws and incentives helps businesses maximize financial efficiency and long-term profitability.

Regulatory Due Diligence and Compliance Audits

Accounting firms conduct thorough reviews of legal documents, compliance filings, and regulatory requirements. By identifying gaps, they enable acquirers to proactively address compliance issues. This reduces the risk of regulatory penalties and legal disputes, ensuring smooth transitions.

Financial Integration: Harmonizing Operations and Systems

Successful mergers require seamless financial integration. CPA firms play a key role in aligning financial systems, policies, and reporting structures. Their expertise helps businesses streamline operations, enhance reporting accuracy, and reduce post-merger disruptions.

Financial Integration of CPA Firms and M&A

Financial Integration of CPA Firms and M&A

Alignment of CPA Policies and Procedures

After an acquisition, firms work closely with management to standardize financial policies. This alignment ensures consistency across financial reporting systems. As a result, companies can produce accurate financial statements and maintain regulatory compliance.

Post-Merger Integration Planning and Execution

CPA Firms develop integration plans with clear milestones and responsibilities. They assist in aligning organizational structures, IT systems, and financial workflows. By doing so, they minimize disruptions and enhance operational efficiency during the transition.

Performance Measurement and Synergy Tracking

By setting key performance indicators (KPIs), CPA firms track integration progress. They assess whether expected synergies are achieved, helping businesses identify areas for improvement. This structured approach ensures that post-merger goals align with strategic expectations.

Risk Management: Mitigating Operational and Financial Risks

Uncertainty is a constant in business. Effective risk management is essential to safeguard operations and investments. CPA firms help companies identify, evaluate, and mitigate risks that could threaten financial stability and long-term success.

Identification of Operational Risks and Control Weaknesses

CPA Firms assess internal controls, risk management frameworks, and operational processes. By identifying weaknesses, they help businesses strengthen control mechanisms. This reduces the likelihood of financial misstatements, fraud, or operational inefficiencies.

Implementation of Robust Internal Control Frameworks

Based on risk assessments, CPA Firms establish control frameworks tailored to business needs. These include access controls, duty segregation, and fraud prevention strategies. By enhancing accountability, they create a more secure financial environment.

Contingency Planning and Risk Mitigation Strategies

Anticipating potential challenges and contingencies, these firms collaborate with management teams to develop comprehensive contingency plans and risk mitigation strategies. By identifying alternative courses of action and preemptively addressing potential risks, they help acquirers navigate uncertainties and safeguard their investment against adverse events.

Empowering CPA Firms: Magistral Consulting’s Tailored Solutions

Magistral Consulting helps CPA firms enhance performance and competitiveness. Through customized strategies, it enables firms to achieve growth, efficiency, and long-term success. Its expertise covers various aspects of financial consulting and operational excellence.

Magistral's services for CPA firms

Magistral’s services for CPA firms

Strategic Growth Planning

Magistral Consulting works closely with CPA Firms to craft clear strategic visions aligned with long-term goals and market dynamics. Through in-depth analyses of internal strengths and external opportunities, Magistral Consulting assists them in formulating actionable strategies for sustainable growth and competitive advantage. Leveraging market insights, Magistral Consulting identifies growth opportunities and expansion paths. Whether entering new markets, diversifying services, or targeting specific clientele, Magistral Consulting tailors’ strategies to enhance market presence and revenue streams.

Operational Efficiency Enhancement

Magistral Consulting assesses operational workflows within these firms to pinpoint inefficiencies and streamline processes. By implementing automation solutions and streamlining workflows, Magistral Consulting boosts productivity and reduces operational costs. Magistral Consulting supports firms in adopting state-of-the-art technologies such as cloud-based accounting software and data analytics tools. Embracing technology enables them to enhance efficiency and elevate client service delivery.

Talent Development and Training

Magistral Consulting offers tailored training initiatives covering technical competencies, soft skills, and leadership development tailored to the specific needs of these firms. Collaborating with them, Magistral Consulting facilitates the development of succession plans to groom future leaders and ensure seamless transitions.

Regulatory Compliance and Risk Management

Magistral Consulting provides expert advice on regulatory compliance, assisting CPA firms in interpreting new regulations and implementing compliance measures effectively. Magistral Consulting conducts thorough risk assessments and devises proactive strategies to mitigate vulnerabilities and strengthen resilience, ensuring they are well-prepared to navigate regulatory challenges and operational risks.

About Magistral Consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates, and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modelling, Portfolio Management, and Equity Research

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is authored by the Marketing Department of Magistral Consulting. For any business inquiries, you can reach out to prabhash.choudhary@magistralconsulting.com

CPA firms bring essential financial expertise to M&A transactions, conducting thorough due diligence, risk assessments, and financial analyses that are crucial for informed decision-making.

CPA firms guide acquirers through complex regulatory landscapes, ensuring adherence to accounting standards, tax laws, and industry-specific regulations to mitigate legal risks.

CPA firms collaborate with management teams to harmonize accounting policies, financial reporting practices, and operational workflows across acquiring and target entities, facilitating seamless integration.

CPA firms conduct comprehensive risk assessments, identify operational vulnerabilities, and develop proactive strategies to mitigate risks, safeguarding the interests of acquirers and preserving shareholder value.

Yes, CPA firms offer tailored training programs covering technical competencies, soft skills, and leadership development to enhance the capabilities of these firms engaged in M&A transactions, ensuring they are well-equipped to navigate the complexities of the process.

In the fast-paced world of finance, accuracy and transparency are essential. Fund administration and accounting play a crucial role in ensuring investment funds operate smoothly and reliably. This article explores their importance, processes, challenges, and best practices.

Fund Administration: Facilitating Operational Efficiency

Fund administration covers a range of tasks that keep investment funds running efficiently. From regulatory compliance to investor relations, administrators ensure seamless operations. Key aspects include:

Fund Administration: Facilitating Operational Efficiency

Fund Administration: Facilitating Operational Efficiency

NAV Computation

At the heart of fund administration is the calculation of Net Asset Value (NAV). This metric reflects a fund’s per-share value after deducting liabilities. Since it serves as a key performance indicator, accurate NAV calculations are critical for investors and regulators.

Compliance and Regulatory Oversight

Fund administrators must ensure compliance with regulations set by authorities like the SEC in the U.S. or the FCA in the UK. They handle record-keeping, reporting, and internal controls to mitigate risks and maintain compliance.

Investor Relations and Service

Fund administrators act as a bridge between funds and investors, managing inquiries, subscriptions, and redemptions. By offering excellent service, they build trust and strengthen investor relationships.

Fund Accounting: Ensuring Precision in Financial Reporting

Fund accounting forms the foundation of financial reporting for investment funds. It includes specialized processes tailored to fund structures. Key elements include:

Fund Accounting: Ensuring Precision in Financial Reporting

Fund Accounting: Ensuring Precision in Financial Reporting

Portfolio Valuation

Fund accountants value assets such as equities, fixed-income securities, and derivatives. They follow industry standards and regulatory guidelines to ensure accurate financial reporting.

Expense Management and Allocation

Proper expense management optimizes fund performance and maintains fairness among investors. Fund accountants track and allocate costs like management and custodian fees based on fund documents and regulations.

Financial Reporting and Transparency

Fund accountants prepare financial statements that provide clear insights into a fund’s performance. These statements, including income statements and balance sheets, follow strict accounting standards to ensure transparency.

Risk Mitigation and Regulatory Compliance

Beyond valuation and reporting, fund accounting involves risk mitigation and regulatory compliance. Fund accountants identify risks, ensure regulatory adherence, and implement strong risk management strategies to uphold fund stability.

Challenges and Considerations in Fund Administration and Accounting

Despite their pivotal role, fund administration and accounting encounter diverse challenges in today’s dynamic financial landscape:

Regulatory Complexity and Compliance Burden

The regulatory environment governing investment funds is characterized by its complexity and continual evolution. Fund administrators and accountants must navigate a labyrinth of regulatory requirements, spanning reporting obligations to compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations. Remaining abreast of regulatory changes and implementing robust compliance frameworks is essential to mitigate regulatory risks.

Data Management and Technological Integration

The exponential growth of data poses significant challenges for fund administrators and accountants, necessitating robust data management systems and technological solutions. Leveraging cutting-edge technologies such as artificial intelligence (AI), machine learning, and blockchain can streamline processes, enhance data accuracy, and mitigate operational risks. However, integrating these technologies necessitates careful planning and investment in infrastructure and talent.

Operational Efficiency and Cost Optimization

In an increasingly competitive landscape, fund administrators and accountants face pressure to enhance operational efficiency and optimize costs. Streamlining processes, automating routine tasks, and leveraging economies of scale through outsourcing are strategies employed to achieve operational excellence while containing costs. However, striking the right balance between efficiency gains and cost containment necessitates careful consideration of organizational priorities and strategic objectives.

Emerging Trends and Best Practices

In response to evolving market dynamics and technological advancements, fund administrators and accountants are embracing innovative trends and best practices:

Digital Transformation and Automation

The digitization of fund administration and accounting processes is revolutionizing the industry, enabling greater efficiency, accuracy, and scalability. Robotic Process Automation (RPA), artificial intelligence (AI), and cloud-based solutions are being leveraged to automate routine tasks such as NAV calculation, reconciliation, and reporting, freeing up resources for higher-value activities.

ESG Integration and Sustainable Investing

ESG (environmental, social, and governance) factors are influencing fund management strategies and investment choices more and more. In response to investor demand for sustainable and ethical investing, fund administrators and accountants are incorporating ESG issues into their reporting systems and investment analysis. Funds can reduce long-term risks related to environmental and social variables and attract more socially conscious investors by adhering to ESG standards.

Outsourcing and Strategic Partnerships

In order to concentrate on their core skills, a growing number of fund managers are outsourcing non-essential tasks to specialized service providers, such as accountancy and fund administration. Businesses can obtain specialized knowledge, scalable infrastructure, and cost savings through outsourcing, which also lowers operating expenses and lowers compliance risks. Establishing strategic alliances with dependable service providers can improve operational resilience and agility, allowing businesses to more effectively adjust to shifting market conditions and regulatory demands.

Magistral’s Services on Comprehensive Fund Administration and Accounting Support

In the complex realm of finance, where accuracy and openness are essential, Magistral Consulting shines as a symbol of quality, providing thorough fund administration and accounting services customized to the specific requirements of investment funds. Committed to integrity, effectiveness, and client contentment, Magistral Consulting provides precise financial management solutions that enable clients to navigate the intricacies of the investment world with assurance and simplicity.

Fund Administration Expertise Unveiled

Our team specializes in providing fund administration services, leveraging a profound understanding of regulatory requirements and industry standards. From Net Asset Value (NAV) calculation to ensuring compliance and managing investor relations, we guarantee seamless operational efficiency for investment funds of all types and sizes.

Reliable Financial Reporting with Fund Accounting Solutions

Our fund accounting services are renowned for their precision and dependability. By utilizing advanced technologies and adhering strictly to accounting standards, we furnish accurate portfolio valuations, transparent expense management, and comprehensive financial reporting. Our focus on clarity and transparency empowers clients to make well-informed decisions and maintain trust among investors.

Tailored Solutions and Personalized Support

What sets us apart is our commitment to understanding the unique requirements of each client. Through personalized consultations and bespoke solutions, we ensure that every client receives the tailored attention and support they need. Whether it involves navigating regulatory intricacies or optimizing operational effectiveness, our dedication is to surpassing expectations.

Innovative Strategies for Today’s Challenges

In addressing contemporary challenges, we employ innovative strategies that prioritize staying ahead of the curve. Through the integration of automation, artificial intelligence, and blockchain technology, we streamline operations, enhance data accuracy, and minimize operational risks. By embracing a forward-thinking approach, we empower clients to navigate evolving market dynamics and seize emerging growth prospects.

The Future of Fund Administration and Accounting

The trajectory of fund administration and accounting is set for innovation and evolution as the financial landscape progresses:

Enhanced Regulatory Oversight and Transparency

Regulators are anticipated to heighten their supervision of investment funds, emphasizing the augmentation of transparency, investor safeguarding, and systemic resilience. This may involve regulatory enhancements such as elevated reporting obligations, more rigorous compliance criteria, and heightened scrutiny of fund governance frameworks. Fund administrators and accountants will be required to adjust to evolving regulatory directives and harness technology to bolster transparency and adherence to regulations.

Adoption of Blockchain and Distributed Ledger Technology

Increased efficiency, security, and transparency offered by distributed ledger technology (DLT) and blockchain can totally change accounting and fund administration processes. Fund administrators and accountants can use blockchain-based solutions for record-keeping, settlement, and transaction processing to increase data quality, streamline operations, and reduce fraud risks. However, for blockchain technology to become extensively used, industry stakeholders’ collaboration and governmental clearance are required.

Focus on Cybersecurity and Data Privacy

Amidst the proliferation of digital technologies and interconnected systems, cybersecurity and data privacy have risen to the forefront for fund administrators and accountants. Preserving the confidentiality of sensitive financial data, fortifying defenses against cyber threats, and adhering to data privacy regulations are essential focal points. It’s imperative to invest in robust cybersecurity measures, conduct routine audits, and implement data encryption protocols to effectively mitigate cyber risks and uphold investor confidence.

About Magistral Consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates, and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modelling, Portfolio Management, and Equity Research

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is authored by the Marketing Department of Magistral Consulting. For any business inquiries, you can reach out to prabhash.choudhary@magistralconsulting.com

Introduction to Real Estate Financial Research

Real Estate is considered one of the golden investments that are pretty safe from the vicissitudes of financial markets. Everyone can’t own a piece of cash-generating real estate as it requires massive investments. That is why various real estate-based financial instruments help investors get a pie of the Real Estate market and enjoy the share of the returns.

At the same time, the Real Estate market requires comprehensive research to ascertain the quality of assets, to be successful. Real Estate finance is even more tricky.

Magistral Consulting specializes in operations’ outsourcing for Asset Management players specializing in RE across the globe. Our clientele comprises the following types of RE Financial players

Magistral Services for Real Estate

Magistral’s services for Real Estate

Real Estate Private Equity: It’s a form of Private Equity which has an underlying asset in the form of RE or RE based stocks. Players choose their area of expertise depending on the specialization of partners or picking up an asset class that is growing rapidly. Multiple forms here can be elders’ living, self-storage, infrastructure, redevelopment funds, renewable energy-based infrastructure, meth farming lands, or several other types of residential and commercial Real Estate.  The Private Equity fund invests in the RE stocks, REIT stocks, or RE ETF and gives returns in the form of dividend or capital appreciation.  There are also multiple RE based hedge funds too on similar lines.

Real Estate Investment Trust (REIT): These funds are invested more directly in RE as compared to Real Estate Private Equity. After buying the Real Estate, these funds actively manage the asset for maintenance and rental collections and yields. They then distribute their earnings in the form of dividends to their investors. REIT stocks are also traded bringing in capital appreciation or profits from trading. Many investors including RE Private Equity apart from Investment Banks and other Financial institutions buy into REIT stocks.

Real Estate Owners/ Developers: These are the direct owners of the Real Estate or developers of the properties. They may have land and may look for funds from investors to develop it and then distribute the profits accordingly.

Real Estate Consultants/Real Estate Brokers: Like the Real Estate owners, property consultants and brokers may also have interests in collaborations for development and fund-raising.

Magistral Consulting services cover the full range of operational support for all types of players in the Real Estate finance business. Here are our lines of services offerings:

Real Estate Fund Raising and Exits

These assignments are taken on a retainer basis. It includes all the operations’ support that is required for fundraising. This includes services like Identifying Limited Partners that may invest in a given asset, funding strategy, funding environment analysis, pitch deck, investor committee presentations, equity waterfall analysis, and several other similar assignments to close the funding round as soon as possible.

Real Estate Pre Deal Support

The service is related to document and operational support before a deal. This includes preparing investment memorandums, financial modeling that finds out the Real Estate valuations and returns, market analysis, property profiling, data, and data rooms’ management. Real Estate due diligence is also performed under this bouquet of services

Real Estate Deal Structuring

These are the services offered during the RE deal. This includes Real Estate modeling, rent rolls analysis, rental comps, equity waterfalls, funding requirement analysis, and investor committee memorandums

Real Estate Portfolio Management

This includes services like board updates, occupancy and yield trackers, Real Estate yields, REIT dividend calculations, tracking real estate fund indices, rent roll analysis, expenses and budgets, Real Estate Fund Accounting, fund administration, and accounting, fund fee structures, and portfolio dashboards.

Advantages of Operations’ Outsourcing for a Real Estate firm

There are multiple advantages of outsourcing for a Real Estate based investment firm or an Asset Manager

Advantages of Outsourcing

Advantages of Outsourcing for a Real Estate Based Asset Management firm

Everything in-house will bring down your pace of growth: For any organization, whether it’s a REIT, RE Private Equity, or a RE based Asset Manager, growth is good news. But it also brings with it, huge uncertainties in terms of cash flow. Outsourcing here acts as a temporary patch. You get the project, you outsource it till the client stabilizes, and then decide what to keep in-house and what to outsource. It brings down the cash flow risks dramatically. Outsourcing keeps pace with your project flow and you don’t wait for months for the new associates to join you.

Quality concerns around outsourcing are unfounded:  Another factor that is sighted against outsourcing is quality concerns. Some of the biggest Real Estate players have outsourced their operations to low-cost countries like India. We also encourage clients to have low-cost pilots to ascertain quality before deciding on a larger scope of work to be outsourced.

Unmistakable advantages in terms of costs: The complete business case of outsourcing is usually built around saving costs, and it is very easy to understand the advantages here. Depending on your location in the US, Europe, the UK, or Australia, outsourced analysts are cheaper in tune to 30% to 80% of the costs of onsite analysts. There are further savings in terms of lower supervision time, costs of databases, skill bandwidth of the whole outsourced team as compared to a few onsite analysts, and the flexibility with which new resources could be added or removed

If you are small, you can’t do without outsourcing: It is understood that outsourcing will bring mighty savings on top of the headcounts in thousands. Though that is correct, there are immense benefits for small setups too. A small set up sometime may miss some of the critical skills that bigger Real Estate players have.

Assignments move at double the pace: Outsourced team acts as an extended team to the onsite team. With time zone differences, it is like the combined team is moving at double the pace working in the day and the night as well. So an assignment that would have taken 30 days to complete may see itself being finished in 15 days. Agility does have value in the marketplace.

No exit barriers from contracts: If you are not happy with the quality, timeliness, and responsiveness or have any other issues with your own business or the quality of services, the contracts have a swift exit clause. You can terminate the contract with a few days’ notice.

Competitive pressures regarding outsourcing: Real Estate Financial services are increasingly outsourcing their operations. It gives them an immense advantage in terms of costs and hence pricing their services to their clients. Someone who is doing everything in-house will be costlier without adding any additional value to the client. Competitive intensity regarding outsourcing is huge, and it may force everyone to outsource at some point. Early movers may rope in significant rewards though.

Hiring an individual Vs. Hiring a team: When you outsource, you don’t hire a single individual, you also hire the expertise of a team that is working across the various RE players for years. This means an international standard quality being delivered on day 1 as compared to months for an onsite hire.

Magistral Consulting has helped multiple RE firms in outsourcing their operations to build in significant cost savings. To drop an inquiry get in touch

About Magistral

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The Author, Prabhash Choudhary is the CEO of Magistral Consulting and can be reached at Prabhash.choudhary@magistralconsutling.com for any queries or business inquiries.