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Measuring Your Portfolio’s Financial Performance Is the Key to Making Future Investments

October 27, 2022 | Manisha Rivas, Marketing Manager, Retransform
Anne Spulber, Products Manager, Technology, Retransform
3 min read
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The industry looks to nuances like market trends and patterns to run a commercial real estate (CRE) business - decide between buying or building on an empty lot, find corporate occupiers, manage the leases and then rinse and repeat. The rinse and repeat method only work if you know your portfolio is in the green.

Why is real estate financial modeling important?

Real estate financial modelling creates an effective way for real estate investors, lenders, asset managers and brokers to make informed decisions about their financial assets. It cuts out redundant intermediaries in real estate transactions, reduces costs and increases opportunities through improved data management and quality. With the proper financial tool, you can conduct sensitivity and scenario analysis with a built-in stress test that produces faster business decisions. Manage risk and understand the impact of changes on your property and portfolio KPIs.


Do you have the right assumptions in place?

Let’s take a practical example like The Project 50 that consists of 50 multi-use property project, hypothetically worth $2M each when all is said and done. One or two of the properties will not sell and you’re worried that the vacancy will negatively impact the foot traffic to your properties. The assumptions you make about backfilling that space are vital. Some assumptions to guide your financial modeling are the total end value, cost to purchase the lot, construction costs and let’s not forget upfront financing costs. Real estate projects require funding upfront to acquire the lot. After that, the developer makes monthly drawdowns to cover construction costs as the project progresses.


The construction costs are forecasted upfront by both the developer and the lender with the lender employing a surveyor to monitor the costs and sign off on the monthly drawdown requests during the project. Typically, drawdowns can vary from month to month as it outlays change and inflation occurs. A construction project usually won’t generate enough to any revenue until the construction is complete and the property is ready to occupy, which means the interest charged by the lenders is accrued and compounded over the term of the project. Choosing the wrong financing and not putting the proper assumptions can mean paying more interest than necessary. One way to prevent that is by managing your portfolio through a real estate financial modeling platform.


User-friendly – easy interface

Modern financial modelling tools go beyond spreadsheets and that ideology might scare one from using models, however ‘modern’ can also mean easier to use. A cloud-based application can produce clear projections, managing multiple property valuations all in one central, accessible location. The models can easily be integrated within your own property management system, giving you side by side comparisons amongst different data points on one or multiple buildings.


Custom reporting

The power of reporting puts you in control. The reports should be able to record performance metrics from property asset, capital revenue to gain+/loss- to CAM expenses and lease rent rolls. By combining the data, the valuations and future projections, a property owner can assess the information to their team with a 360-degree perspective. Another helpful tool are notifications and alerts which can be set up to flag thresholds being reached or highlight loss of revenue. It is so quick that ultimately, precautionary measures can be taken care of.


Full transparency

The right financial modeling tool can manage multiple property valuations, investments, budgets and portfolios, all in one central, accessible location. A cloud-based application should be able to provide visibility a specific asset or group of assets throughout the terms put in place. This in turn allows you to optimize your assets and portfolios by projecting their performance and financial future with much greater detail and accuracy with anyone, anywhere in the cloud.


Fintech is transforming real estate. By having a powerful financial modelling tool, it enables the precise projection of performance and growth that you won’t find in a spreadsheet.

Manisha Rivas, Marketing Manager, Retransform
Manisha Rivas has spent the last 17 years building up a skillset in business and real estate marketing. She plays a pivotal role in Retransform's brand management, logistics and understanding how its important to be relatable and approachable to the customer experience.




Anne Spulber, Products Manager, Technology, Retransform
Anne Spulber has over 14 years of experience in technology and built environment. She has worked for companies such as Hilton where her responsibilities included innovation with real estate, real estate development or sustainability. She has a mixed educational background in architecture, technology , business and smart cities. She has also successfully co-founded two PropTech start-ups.

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