September 14, 2022
WHITEPAPER

From OMs to IC Memos in Record Time

Building Investment Committee Memorandums (IC Memos) is a big time sink for many real estate acquisition teams. For marketed deals, the process usually starts with receiving an Offering Memorandum (OM) and other supporting materials from the broker or seller. 

However, the OM presents all of that information from the perspective of the seller (i.e., the asset owner, enlisted broker, developer, or deal sponsor). As a result,  investment teams have to do a lot of work to translate that information into a summarized format that captures relevant details that members of the IC need to make informed decisions. 

Problem: Lack of Standards

This process involves much more than simply copying and pasting information from one format to another. There are no standard templates for OMs. They vary in structure and the level of detail provided. For example, although some OM sections are relatively common, such as the Executive Summary, Property Description, and Market Overview, there is no guarantee that the information will be in one place in a consistent format.

On the real estate investment side, IC Memos have specific requirements based on their own underwriting approach and internal processes such as due diligence. While these processes make use of the information from an OM, they are custom to the way each investment company does business.

Solution: Bringing Data and Workflow Together

Building an IC memo requires human judgment and real estate investment screening expertise. That need is unlikely to change soon. But it should not require chasing down details across many disparate sources or extensive back and forth to figure out how the screening process is progressing.

Origin by Altrio is an ideal solution to these challenges. It integrates data and workflow into one easily accessible working environment. It helps teams leap over some of the most common hurdles quickly, significantly reducing the amount of time between receiving an OMs and generating IC Memos. 

Origin helps to accelerate the process by delivering four essential benefits.

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Data Extraction from the OM

First, Altrio’s Data Service extracts deal, asset, and market data from OMs and other documents you receive, saving hours spent on data entry every week. Scraping this data gives deal teams a clean starting point for the rest of the screening process. Moreover, we have designed Origin so that the data and tools to analyze it can be customized to firms’ internal screening processes.

Using Deal Flow and Historical Pipeline to Your Advantage

Second, Origin saves teams an enormous amount of time looking through historical documents. Very few real estate companies are able to make effective use of the data they gather on their current pipeline and historical deals, especially those where they choose to pass. Teams can populate underwriting assumptions with property data, make underwriting comparisons, and give teams access to proprietary sales, lease, and cost comparables for any property they have considered. As a result, they can tap into a holistic view of every investment over time with a proprietary data set. This data set helps underwrite properties more quickly and confidently, with easy access to data about add-on investments, refinancing, and dispositions.

Incorporating Third-Party Data

Third, Origin brings together essential real estate, capital market, economic and demographic data from industry leaders in real estate analytics, including Real Capital Analytics, Statebook, and Cherre. These sources help flesh out an IC Memo. They provide complementary detail that is not included in the OM or visible within your proprietary pipeline. In Origin, they have the added benefit of being available within the context of your own data via a single platform.

Making Workflows More Efficient

Fourth, because it is more than just a pipeline tracking tool, Origin Workflow makes it easier to manage the process from receiving an OM to creating an IC Memo to deal approval. It includes tools that track every stage of the investment process alongside essential data about active, passed, and closed deals. It helps keep team members on track with automated reminders of key upcoming dates and tasks. Finally, it increases consistency across each deal by defining standard stages, tasks, milestones, and required fields. Real estate investment companies can examine performance across deals to find opportunities for ongoing improvement, getting faster and faster than the competition.

Conclusion

Getting from an OM to an IC Memo can be a long and arduous process, but it doesn’t have to be. Origin by Altrio can help by automating a lot of the tedious, low-value-add tasks so that you can focus on dialing in assumptions and honing scenarios to ensure your investment committee has the information they need to make the right decision.

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