Challenging Times for Real Estate Investors Require a Fresh Approach
The real estate industry has been faced with many challenges over the past few years. Higher operating costs, a slow economy, weak tax credit pricing, and tough financing market have all been contributing factors. This has led to higher overall asset replacement cost, leaving a growing percentage older building stock without needed capital upgrades. In these cases, outdated technology and inefficient construction have combined with increasing energy costs to further hinder the financial performance of these assets.
Our Role in Reducing Utility Costs
Strategic Energy Group assists clients not only in reducing these challenges but also capitalizing on them. High new construction costs are increasingly leading real estate investors towards acquiring under performing assets and re-positioning them. This provides savvy investors an opportunity to address needs while not diluting the market with additional building stock.
The goal is to identify assets that meet investors’ acquisition criteria, quantify potential, and implement an effective capital and operational plan to increase the net operating income by reducing utility costs. This analysis combined with the financial analysis of each improvement as it relates to first cost and cash flow can be the difference between adding a high quality asset or an under-performer.