Foundations of Real Estate Management

1. BOMA International ® Foundations of Real Estate Management ® Module 2: The Well-Versed Real Estate Manager The Business Plan

2. Objectives • Describe the difference between a business plan and a budget • Define zero-based budgeting and describe how zero-based budgets differ from traditional budget models

3. Budget v. Business Plan Budget: financial plan Business plan: strategic planning document Goals Strategies Tactics Metrics/benchmarks

4. Budget v. Business Plan Concepts and tools Zero-based budgeting Budgeting software Keep a detailed record of calculations and methodologies for future reference

5. Putting it Into Practice Work with your instructor to complete the assignment in the workbook.

6. Income • First enter data on existing leases • Determine leasing plan • Consider effect of free rent and concessions • Set up OE estimates and OE reconciliation calculations • Review and enter misc. income

7. Operating Expenses Compare against previous budgets Use BOMA’s EER Before budget season begins Bid service contracts and “wish list” projects Ask vendors about contract changes

8. Operating Expenses Use averages for unpredictable expenses Develop payroll budget Involve staff in budget development Think “green”

9. Capital Expenses Leasing expenses Commissions Tenant improvements Other capital expenses Building improvements Property Condition Report (PCR)

10. Reforecast Budget Mixes YTD actuals with budget numbers for remainder of year

11. Submitting Your Plan to Owner Check your work Check for mathematical errors Check spreadsheet links Perform final review of business plan before involving other team members Make sure business plan packet complies with owner’s instructions Compare budget to current year re-forecasted numbers

12. Submitting Your Plan to Owner • Submit your business plan ahead of the pack • In this case, it does pay to be first, as long as the business plan you submit is accurate and well done