StoneCreek Partners provides performance audits for real estate assets including municipally-owned facilities, office and industrial portfolios, hotels and resorts, retail properties, and location-based entertainment. Our includes both public and private sector clients. A performance audit can take several forms depending upon the organization’s objectives.
Our work is about asset performance compared to benchmarks, asset management best practices, and highest-and-best-use. In the end, those providing oversight for an organization seek to understand their opportunities and alternatives that may improve the asset portfolio. Improvement can begin with assurance of best practices but most certainly includes new earnings or efficiencies (cost savings) in associated cash flows and occupancy costs.
For investment properties the focus is on cash throw-off to owner.
For facilities housing a public sector entity’s public services, or a private company with corporate offices in one or more locations, the focus is on occupancy costs and staffing-to-office space efficiencies.
There is a highest-and-best use aspect to this work, for either investment properties or organizational facilities. Moving operations to more suitable and sometimes less expensive facilities may provide an opportunity for adaptive re-use or sub-lease (including ground lease) of the existing facilities.
Beyond the assets themselves, there is also the matter of organization human resources, in terms of structure, core competencies, and deployment. Many years ago our co-founder learned the “executive developer” approach to lean overhead at The Irvine Company, where new owner Donald Bren directed an overhaul of the 1,300-person company. The objective in the strategic planning process was to achieve a core in-house team of about 300 (or less) professionals and staff with well-selected third-party developers and property managers handling a significant portion of the multi-billion-dollar portfolio of investment properties and lands held for development.
There is also the matter of accounting, reporting, transparency, and accountability. In performing audits for real estate assets, we rely upon third-party accounting firms for their evaluation of financial reporting and how well general accounting standards are met. For the technical side of IT support to such reporting, software in use, and the like, we collaborate with other third-parties in identifying whether industry best-practices are in place or if there are opportunities for modification to meet such standards.
Sometimes our work involves a single asset or a portfolio of like properties such as shopping centers or industrial buildings. For school and port districts we have reviewed leasing practices and surplus property dispositions.
Some of our more interesting assignments have involved location-based entertainment including attractions and gaming properties, each needing repurposing for continued economic viability.
We have even been brought in to provide performance audits for real estate assets in connection with the design and leasing reviews for properties in development. Such a situation can occur when owners learn that the assumed end-user marketing (leasing or sales program) for the project is not working well.
The work is essentially the same as when evaluating an organization’s complete property portfolio.
The Pandemic has created an urgency among property owners to re-think how real estate is utilized in their organizations; whether for an organization’s occupancy or for earnings.