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Real Estate Risk Advisory Services
The landscape for real estate companies is constantly evolving, as access to funding and potential acquisitions present opportunities for growth. But while deal-makers focus on day-to-day operations, risks associated with property management, fraud and back-office infrastructure can threaten the health of the organization. Our risk advisory team offers services to help mitigate risk and increase the effectiveness of operations without stifling growth opportunities.
Real estate risk issues:
We provide risk advisory services across the real estate spectrum, working with lenders, investors, partners, joint venture partners, registered investment advisors and third-party managers. To help your organization address existing and emerging risks, we develop and implement proactive strategies, utilizing a full suite of services, including:
Real estate internal audit services: In many cases, real estate companies experience difficulty with decentralized operations, poor internal controls, inadequate process design and documentation, reporting errors, and inconsistent subsidiary financial reporting. In addition, REITs or potential REITs may not be prepared for additional oversight and regulation.
Real estate internal controls: As real estate companies grow, their controls often struggle to keep pace. Poor internal controls can lead to fraud; processing, accounting and financial reporting errors; and surprise write-offs.
SOX compliance: Since the Sarbanes-Oxley Act of 2002 was signed, publicly traded companies—including REITs—have had to adjust to tougher reporting requirements, including formalizing and documenting controls, processes and compliance.
Contract compliance: Real estate is a contract-driven industry with significant procurement agreements and reliance on key vendors, as well as sizable commitments for construction and development projects. Money can disappear easily, and management must ensure that it gets what it pays for, including appropriate discounts and change orders.
SOC reporting: Service organization control reporting is becoming increasingly important to assess the risks associated with an outsourced service. Many contracts now require SOC reports from third-party property managers and companies that process or perform transactions for clients.
Information technology risk management: Within real estate companies, IT risks typically emerge with outdated platforms, with new systems that may not provide proper coverage or when integrating systems following an acquisition. In addition, some systems simply have a history of issues, such as outages, security vulnerabilities and slow processing.
Real estate information security: The frequency and severity of hacking and data breaches demonstrate that all companies are at risk for a potential incident. All information has value, and if a company maintains sensitive data, management must take measures to protect it.