| The Investment process Due to the expenses and opportunity costs related to a full-fledged real estate due diligence and due to the structure of the investment organization, real estate due diligence is not a stand-alone task but phased into the investment process as shown below. 
The six sub-streams of a real estate due diligence process are:
| - | Economical analysis
(micro and macro market)
| | - | Financial analysis
(leases, tenant credit standing, operating costs, cash flows, budgets, capital structure, service provider deal structures, appraisals etc.)
| | - | Legal analysis
(title, liens, easements, violations of permits, purchase, tenant and service contracts, etc.)
| | - | Tax analysis
(business tax, income tax, capital gains tax, value added tax etc.)
| | - | Technical analysis
(zoning plans, permits and constraints, construction plans, structural quality, construction materials, installations, energy efficiency, design, inspection reports, quality of installation and equipment, capacity of installations, service reports, refurbishment projections etc.)
| | - | Environmental analysis
(permits and constraints, site quality, operations, construction materials etc.)
| Each asset is managed by a specific asset manager. Before an investment project can be discussed, this asset manager must be found and assessed with regards to his skills and trustworthiness. This process is structured in separate work packages as shown below . When a target country is identified, Real Future taps into its large international network of real estate professionals and researches publicly available information, to either directly or indirectly locate potential asset managers for specific regions within the macro market.
After a potential asset manager has been identified, Real Future performs a preliminary assessment on the basis of the information available before approaching the asset manager as a potential client. Typical reasons to refrain from a collaboration at this early stage are a lack of trustworthiness, an unattractive micro market or possible conflicts of interest. In the kick-off meeting Real Future and the asset manager discuss the investor’s needs vs. the asset manager’s scope of expertise, the required level of professionalism and the distribution of roles and responsibilities. If no basic disagreement emerges, a structured assessment of the quality of this asset managers services is performed by the help of a value-benefit-analysis. This due diligence is based on discussions, project material, site visits and 3rd party references etc. The criteria categories are soft skills (incl. trustworthiness), real estate skills, real estate network and general business skills.
If the asset manager meets the requirements of Real Future AG and its clients, a basic collaboration agreement must be found (non-contractual). This includes a common understanding of the extent and structure of the reimbursement of the asset management services to be delivered, as well as the definition of tools (due diligence, planning and reporting) and processes to be applied for properly managing future investments. Finally, the asset managers operations must be adjusted or set up before actually engaging in specific investment projects (legal structure, service suppliers, regulatory compliance etc.). |
