Nearly all commercial real estate investment transactions are financed with some combination of debt and equity. Debt is usually obtained from a bank or real estate lender while equity is raised from one or more investors who allocate capital to the deal with the hope of earning a return on it. Large, individually syndicated deals could include dozens or even hundreds of individual investors. To manage and communicate with them, commercial real estate firms create an investor relations team.
At a high level, an investor relations professional is responsible for presenting new opportunities to potential investors and managing relationships with current investors. Common tasks include:
- Networking & Relationship Building: Investor Relations is a people facing role that requires an individual to actively build relationships with the commercial real estate investment community. This happens by attending networking events, hosting lunches, and visiting with potential investors.
- CRM & Database Building: When new investor contacts are made, their information must be entered into a CRM system or database so that future contacts may be tracked. A strong CRM forms the foundation of investor relations activities.
- Prospecting: When looking for new investment capital, investor relations specialists may dedicate a significant amount of time to prospecting and calling the contacts in their database to see if they are interested in allocating capital to a deal or fund.
- Closing The Deal: For individuals who are interested in making an investment, it is the job of the investor relations staff to provide them with the necessary documentation & disclosures and work with them to answer all questions prior to closing the investment.
- Reporting: Once an investment round has been closed, the investor relations staff is responsible for providing periodic updates on the property’s performance, risks, and any notable events. In some cases, they may also deliver the same reports internally, to senior management.
- Trends & Market Data: In order to provide potential investors with the most up to date information, investor relations staff is responsible for reading and staying up to date on the latest market data and trends.
- Education & Training: Not all investors are commercial real estate experts. As a result, a major portion of the investor relations role may be dedicated to providing potential investors with education and training to make them comfortable with the risk/return profile of a deal.
In addition to the above, investor relations personnel may be called upon to complete ad-hoc projects related to bringing an investment to market or related to keeping investors informed about a property’s performance.
When do you need to hire an investor relations professional?
An investor relations team is typically one of the later hires in the growth cycle of an organization. When a firm is small, most investor relations activities are handled by the firm's principals.
However, large commercial real estate firms have big investor relations teams to support the large volume of investor requests throughout the lifecycle of an investment.
What differentiates a good investor relations professional from a great one?
The difference between hiring a good Investor Relations professional and a great one has financial consequences because it means more money raised and/or happier investors. Commercial real estate firms in need of a great marketer should look for the following qualities:
- Personable: Investor Relations is a people facing role and the individuals who work in this position should be friendly, personable, and outgoing. For investors, they are the face of the firm and should be able to represent it well.
- Elite Communicator: The best Investor Relations professionals are elite communicators who can clearly express the value proposition of their project in a way that makes it appealing to potential investors.
- Trustworthy: While they aren’t directly providing financial advice, Investor Relations professionals are dealing with large amounts of capital. They must be trustworthy, have a strong moral compass, and take their fiduciary responsibility seriously.
- Knowledgeable: Investor Relations professionals must be a quick study. Often, they need to digest large amounts of information about a deal quickly and be able to communicate it, accurately, to investors.
- Persistent: Everyone is busy, but great Investor Relations professionals are persistent and don’t give up on trying to get meetings and presentations scheduled.
- Excellent Presentation Skills: Great Investor Relations professionals have excellent presentation skills and are comfortable speaking both in large groups and in one on one settings.
- Organized: When trying to raise capital, Investor Relations professionals may talk to dozens or even hundreds of potential investors. The great ones are highly organized and take the time to track their contacts, make notes, and schedule follow ups.
- Collaborative: Raising capital is a team effort and the best Investor Relations professionals leverage their marketing and underwriting colleagues to deliver effective and accurate presentations.
When it comes to raising capital for new projects and keeping investors happy for existing projects, an Investor Relations professional is an invaluable asset for any commercial real estate organization.
Where can you hire an investor relations professional?
Fundraises can be a stressful time for you and your team. When the workload becomes too heavy, additional investor relations support can be a lifesaver.
At Bullpen, we specialize in helping commercial real estate acquisition and development firms find and hire the best freelance investor relations professionals in the industry. We pre-screen the candidates, verify their experience, and handpick the best talent for your hiring needs … all within 72 hours.