3 Effective Methods for CRE Modelling Success

Written by Forbury | 21-Oct-2024 19:47:35

In the fast-paced world of Commercial Real Estate (CRE), choosing the right modelling method can significantly impact your business's efficiency. With multiple options available, making the best choice can be challenging. In this article, we’ll break down the pros and cons of each approach to help you find the best solution for your needs.

1. Hiring an Analyst

Hiring a dedicated analyst seems like the most direct solution, providing a specialist who can focus solely on your specific modelling requirements.

Pros	Access to expert knowledge tailored to your business Custom-built models for your specific property portfolio
Cons	With average starting salaries for analysts around £50,000, plus overheads, it’s a costly commitment Analysts tend to stay in roles for about two years. Frequent turnover means additional time and costs associated with recruitment and training

Hiring an analyst may be feasible for large companies, but for many businesses, the cost and retention risks make it less attractive.

2. Managing Your In-House Model

Some groups rely on in-house models they've developed over time.

Pros	You maintain full control over your model, with the ability to adjust it as needed Familiarity with the model’s structure and logic
Cons	Modelling might not be your primary focus. Spending time tweaking the model takes you away from higher-value tasks, such as deal-making or portfolio management Even with the best intentions, in-house models are prone to errors, especially if they're not regularly audited by a dedicated team. Without rigorous testing, mistakes can easily slip through and lead to costly miscalculations

Lacking a dedicated modelling team, maintaining and updating an in-house model can become a drain on resources and lead to avoidable errors.

3. Third Party Modelling Software

For those looking for a more reliable and cost-effective approach, dedicated CRE modelling software offers an ideal solution.

Pros	Standardised, industry-tested models that you can rely on Advanced features that save time and improve accuracy Built by experts, ensuring that the software caters to industry-specific needs Don’t need to invest in updating or maintaining own internal systemsProvides technical support, user training, and documentation
Cons	Might not meet the specific needs of every company, especially for those with unique processes or niche market needs Customisation options can be limited Investing time to learn how to use new software

While adopting third-party software has its pros and cons, Forbury stands out by addressing many of these challenges head-on.

Why Forbury?

Proven track record	Acquired by Altus Group, leading global provider of asset and fund intelligence for CRE, Forbury has solidified in the market as a proven tool in the industry
Time saving	Benefit from time saving features like the tenancy uploader and scenario manager. Free yourself from manual data input and admin tasks associated with deal modelling
Customisation	Tailor reports to your branding, giving you a polished, professional look that sets you apart. Alternatively, you can add customised calculations that allow you to continue to get the specific insights that are important for your company
Transparency	Eliminate 'black box solutions,' allowing you to easily trace outputs. Being based in Excel, you are able to verify calculations, ensuring transparency. This transparency enables you and your clients to check calculations with ease
Data confidence	Relying on a third-party tool instead of an in-house model ensures accurate numbers, reducing second-guessing from clients. Advanced error alerts notify and guide you to the source of any issues, minimising risk even further. GDPR compliant and ISO/IEC 27001:2013 certified
Support & training	Our team of UK-based analysts provide support whenever needed. Training is straightforward; after an hour-long onboarding call, you can dive into modelling a deal without needing additional support
Cost-effective	From £3,000, you gain peace of mind, knowing that your CRE modelling is both affordable and top-tier

Don’t just take our word for it, see it for yourself. Why? Because users quickly see the return on investment, realising the time and cost savings compared to hiring or maintaining in-house models. Book a demo here.

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