Building an investor base with low turnover and repeat investment is a marker of success and security for CRE Firms. But in an increasingly competitive market and when there are higher investor expectations than ever before, investor retention can be a challenge.
Read ahead to discover best practices for securing repeat capital in the world of commercial real estate.
Exceed Investor Expectations
According to Forbes, commercial real estate is more attractive to investors than other types of investments because it is backed by physical assets. But you still want your investors to feel as if they made the right choice in that type of investment as well in their sponsor. Once you have an investor’s vote of confidence, continue to wow them by continuously meeting and exceeding their expectations. For example, the modern investor is not going to be content with quarterly reports. Investors want to be in the know at all times, with unfettered access to the details of their portfolio and how their investments are doing. These insights provide your investors with increased control over their investments, creating comfort and confidence amid the unpredictability and risk of investing.
Communicate Frequently and Regularly
Always clue investors in on what’s happening with their assets. Investors want to be in the know and expect you to be honest with them about the status of their assets and how you plan to approach any unforeseen obstacles. Don’t shy away from communication, especially when things are going well! With a CRM software you can send personalized emails in bulk, saving you time and enabling you to keep your investors informed. Eighty Percent of business professionals say that email marketing drives retention, so leverage this technology fully. You can use a CRM to send your investors quarterly newsletters with industry updates, distribute K-1s, release personalized statements and more. This technology helps your investors to feel acknowledged and adds a personal touch to your communication while requiring minimal time and effort.”
Curate a Best-in-Class Investor Experience
Generally speaking, any product or service must demonstrate value to attract and retain consumers. CRE operates by the same principle, but your investors don’t have a tangible product and first-time investors may not clearly understand the value associated with an investment. When it comes to investor retention, the greatest risk occurs with new investors who may feel their experiences are not what they initially anticipated. Many first-time investors jump in and then get cold feet, expecting a huge payout and then facing the reality of market volatility. Set yourself apart from other firms and demonstrate value by leveraging progressive investor management strategies that reflect the evolution of capital holders and investor expectations.
Demonstrate Industry Knowledge
Don’t be a jack-of-all-trades, master of none. Know your market niche and demonstrate your expertise. Your smartest investors will already have a diversified portfolio, but that doesn’t mean you necessarily have to diversify your offerings. Your confidence in your asset class will come across to your investors and fuel their drive to commit capital. Let your investors worry about diversification, while you provide opportunities within your own market expertise. NREI touts integrity and intuition as CRE investing rules you should not ignore. Investors who have not yet developed extensive market knowledge will be drawn to your integrity through the facts you present and information you provide. Commit to your investors by building trust through transparency, and your investors will commit to you. Adding an investor management software to your digital strategy will help you to improve investor transparency while saving you time and driving back office efficiencies.
Want more tips for improving investor relations? Download our free best practice checklist: 7 Ways to Exceed CRE Investor Expectations