Triumph defines Asset Management in commercial properties as the application of economics to manage risk and enhance value. Triumph’s proprietary CRE Value Extraction System™ is a plan-based model that starts by looking at the relative strengths of the property and the economic conditions it is competing, so as to develop a competitive advantage in the marketplace. Like markets, the System is dynamic and reactive in order to maximize the potential for investment returns.
The function of commercial real estate is to provide space or facilities for commerce. Economic factors such as interest rates, unemployment, productivity, inflation, taxes, international trade and regulation affect real estate both directly and indirectly. We endeavor to be students of economics and business in order to fully understand the array of influences on real estate. Investing in real estate is often considered to be investing in the consumer product of business space, however unlike investing in the stock of a single company that manufactures a product or sells a service with reasonably predictable growth, investing in real estate involves many industries and therefore relative unpredictability. Managing that unpredictability, and finding all opportunities within every single investment requires time, resources, experience, and savvy.
Just like business, real estate markets are cyclical. This is a time tested and unavoidable reality, and it is an opportunity. Real estate is a fundamentally sound investment, in that it will never be completely without value. However the value it has will change over time, and not always in a positive direction. When and how real estate is bought and sold becomes a key factor to whether or not value is enhanced, so to that end, Triumph spends a great deal of time on the task of recognizing the cycles and their turning points. We also understand that it is important to be aware that when the trends are pointing in one direction, it may very well be prudent to go in the other. That is why it is imperative to translate economic news into real estate terms, especially at the local level.
There are important distinctions to be made between simply investing money and managing it, and between owning property and operating it. Investing and owning can be passive activities, while managing money and operating property entails a role as the steward of assets, fully engaged in the detail required to make each and every property better today than it was yesterday. We believe the latter is required in order to minimize risk and maximize returns.
- Always gain complete understanding of all risk factors.
- Always work to reduce risk.
- Always seek counsel from those who have been there.
- The only way to find opportunity and manage risk is to know how to look forward, and never assume the past will be repeated.
- Never betray your gut instinct.
- Always seek substantial upside potential, but never pay for it.
- Always strive to be ahead of the crowd, and avoid the urge to follow it.
- There is more money in getting out too early than in staying too late.
- In taking profits, it is good business to “leave something for the next guy”.
- Over-managing properties never leads to failure.
- A building fully occupied at below-market rents is better than one that is vacant at any number.
- Never underestimate the value of good credit.
- Treat everyone fairly, and always do what you say you will.