Overview

Company: a New York-based, long-short equity hedge fund with over $4 billion Assets Under Management (AUM).

The investment team sought to leverage Reonomy Ownership Portfolios to better understand the potential risk profile of a real estate investment trust relative to the other REITS they were monitoring in the market.

With access to granular insights into the REIT’s retail portfolio, including its tenant exposure, the hedge fund would be able to evaluate potential risk to the REIT’s performance given the current economic environment.

The organization identified Reonomy as a source of actionable insights to inform adjustments to their investment strategy. The firm partnered with Reonomy to drive assessments of their investment strategies and the REIT market as a whole.

Business Challenges

Manual, resource-consuming research

The company found that compiling information on an investor’s real estate portfolio is typically an extremely tedious process that required consulting disparate sources of data from multiple public records offices and annual or quarterly financial filings.

Identifying commercial tenants and industry exposure is a process that historically requires hours of manual research and reconciling disparate data sets, which could cost the company hundreds of hours and thousands of dollars.

Limited, imprecise insights

While some information is available but difficult to access, other data points are intentionally kept hidden, rendering analysis limited and imprecise. Examples of such data include ownership information, ownership portfolio makeup, intra-quarter transaction details, and tenant information.

The company needed these hidden data points alongside manually sourced data to yield actionable insights and ultimately conduct analysis with precision and accuracy.

Delayed decision-making

The company found itself hamstrung without a holistic representation of the REIT’s retail portfolio. Moreover, the company’s lack of timely access to intra-quarter transaction details led to more data blindspots and subsequently caused delayed decision-making, resulting in lost opportunities.

The Solution

Streamlined research process

Portfolio information was previously difficult for investors in the CRE industry to uncover before the publication of quarterly or annual reports. Reonomy’s Ownership Portfolios enable organizations to quickly access and leverage portfolio insights before other industry players without consulting a multitude of data sources.

Clarified commercial real estate portfolio insights

Reonomy provides a verified, organized understanding of all assets owned 
by a single individual or company (public or private) including:

  • Asset Mix
  • Debt Profile
  • Location
  • Tenant Mix
  • Transaction History

Faster, more efficient decision-making

With a transparent, 360° view of an investor’s portfolio unlocked, firms can spend more time performing deeper analysis and making better decisions.

Key Results

By leveraging Reonomy Ownership Portfolios, the company evaluated otherwise unavailable intra-year real estate holdings of the REIT in question, and ultimately determined:

  • The REIT was heavily invested in retail assets that posed sizable risk in the current market.
  • Recent acquisitions and total debt accumulated on retail assets indicated that it was unlikely that the REIT would move out of those positions in the near-term.
  • The company determined the tenant mix of the REIT in question was highly exposed to a breadth of tenants that were in the restaurant and hospitality space, indicating a higher default risk compared to more traditional anchor tenants.

Consequently, the client made the determination to move out of their positions within the REIT and reallocated their investment in other real estate holdings, with measurably less risk, totaling $500M in investment value.

About Reonomy Ownership Portfolios

Reonomy’s Ownership Portfolios provide users with an in-depth understanding of all assets owned by a single individual or company, including asset mix, location, debt profile, and tenant mix of the portfolios. Organizations across CRE leverage Reonomy’s portfolio insights to solve a multitude of problems, including growing client relationships, identifying investment opportunities and local operating partners, and improving risk assessments.

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