For some time now, we have heard about the melt down in the residential real estate market. The foreclosure rates on homes are rising, and many other homeowners are barely able to meet their payments. This problem is exacerbated by the fact that some people are also worried that they may lose their jobs in a deteriorating economy. What has not, until recently, been in the press to the same degree is information regarding the state of the commercial real estate market.

In spring, 2008, investment in commercial real estate has decreased to levels not seen in about 4 years. However, the fundamentals remain relatively strong. Vacancy rates continue to be low, and few markets are experiencing negative rent growth. These signals might suggest that now is the time to invest in commercial real estate in addition to carefully managing your current real estate portfolio.

If you own commercial real estate, what can you do to protect your asset? Commercial real estate is no different than any other type of asset. It must be actively managed to achieve the highest return on the investment.

Professional real estate asset management is the best, most reliable, solution. Most people who have a large portfolio of stocks, bonds and cash have professional money management. The same should be true of your real estate asset. Professional real estate asset management will increase the likelihood that your objectives will be met. Since real estate is a highly unique form of financial investment, your real estate asset manager will possess different skills than your money manager.

The nature and size of the real estate investment assets would define the asset management services needed. However, in all instances, the asset manager should physically mange the property, advising the investor on the fiscal viability and timing of maintaining/upgrading the property to ensure market competitiveness. An accomplished real estate asset manager should also be able to sit down with the investor to discuss the financial objectives and performance expectations the owner has from the asset and if/when to add additional types of real estate to the portfolio. When working with a money manager, there are certain funds that are bought for growth or for dividends, and the same is true of real estate. An astute real estate asset manager will be able to provide advice and guidance, and perhaps more importantly, recommend a real estate portfolio that will achieve the return desired.

When choosing a real estate asset manager, the investor should make sure that the manager does more that just use a computer program to determine the investor’s needs. Unlike stocks and bonds, the management of real estate is an art as much as a science. A great real estate asset manager is like a great chef who studies and trains in a number of different techniques and cuisines. However, the greatness comes when he adapts and changes depending upon the tastes of the diner and the ingredients at hand when actually preparing the dish. A real estate asset manager should be able to do the same. He/she should be trained in the disciplines of building management and finance. The asset manager should also possess the CCIM (Certified Commercial Investment Member) designation, which identifies him/her as one of only 6% of commercial real estate practitioners who have successfully completed the required rigorous coursework and exams in commercial and investment real estate. The designation, however, needs to be enhanced by an advisor who is able to adapt those skills to the individual real estate asset and the individual owner. Only then will the investor be getting the best possible management focus for his/her real estate assets.