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Welcome to the International Right of Way

Association’s

Course 703

Real Property Asset Management

703-PT – Revision 2 – 04.30.07.INT

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Introductions

Who we are…What we do…

Where we do it…

How long we’ve been doing it…

Our goals for the course...

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Objectives (1)

At the conclusion of the course, you will be able to…

• Define and understand the differences between property and asset management

• Express an understanding of the goalsof asset management

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Objectives (2)

At the conclusion of the course, you will be able to…

• Identify the needs and prerequisites of a successful asset management program

• Develop and implement an asset

management program

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Housekeeping

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Schedule (1)

8:00 - 8:30 Introductions, Etc.

8:30 - 9:15 Definitions and Needs

9:15 - 10:15 Key elements of an Asset Management Plan

10:30 - 11:15 Developing an Integrated Asset Management Plan

11:15 - 12:15 Foundations of an Integrated Asset Management Plan

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Schedule (2)

1:15 - 1:45 Portfolio Management

1:45 - 2:30 Determining Needs and Setting Priorities

2:45 - 3:15 Developing the Asset Management Plan

3:15 - 3:45 Measuring Success

3:45 - 4:00 Summary and Review

4:00 - 5:00 Exam

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Terms (1)

Property Management is a process of maintaining and creating value in real property, which is consistent with the owner’s objectives.

Asset Management is the comprehensive integrated management plan for all realestate assets. It is the optimization of assetsto produce the most productive use.

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Asset Management

Asset management is…

• Mission driven• System oriented• Long-term in outlook• Customer focused

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Terms (2)

An integrated asset management plan is a structured process that brings all(assets) parts together into a whole.

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Terms (3)

Asset rationalization is the process ofdetermining the need for a given asset and the role that asset will play in an organization.

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Asset Management Plan Goals (1)

• Assist in meeting expectations, goalsand targets related to core business activities.

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Core Businesses (1)

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Core Businesses (2)

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Core Businesses (3)

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Core Businesses (4)

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Asset Management Plan Goals (2)

• Assist in meeting expectations, goalsand targets related to core business activities

• Ensure performance at optimum levels

• Improve operational capacity

• Increase occupancy and reduce expenses

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Asset Management Plan Goals (3)

• Increase revenues

• Enhance asset value

• Provide flexibility

• Increase social or community benefits

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Terms (4)

A portfolio is the collection of like assets.

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Key Elements (1)

• Core business

• Table of organization

• Accountability

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Key Elements (2)

• Real estate’s role

• Communications plan

• Teamwork

• Directions and goals

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Prerequisites

• Commitment

• Proper placement

• Performance measures

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Ingredients (1)

• Inventory

• Needs assessment

• Clear priorities

• Accountability footprint

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Ingredients (2)

• Schedule

• Plan review

• Multiple layers

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Terms (5)

An integrated asset management plan is a structured process that brings all (assets)parts together into a whole.

Asset rationalization is the process ofdetermining the need for a given asset and the role that asset will play in an organization.

A portfolio is the collection of like assets.

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Terms (6)

A property inventory is a database of the organization’s properties with specific information on each parcel.

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Inventory Classifications

• Operating property (present use)

• Future use

• Surplus

• Other

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Criteria (1)

User friendly and simple

Compatible

Meaningful cross-references

Searchable

Increase efficiency

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Criteria (2)

Reduce response time

Hard copies

Protect original documents

Off-site storage

Growth

Cost effective

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Another Inventory Classification (1)

• Core business uses

• Core business related uses

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Terms (7)

Secondary use is organizational acquired property that allows for others to also use, provided that there are no conflicts with the primary use.

Secondary use is two or more organizations using jointly acquired property, which provides for shared costs and responsibilities.

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Another Inventory Classification (2)

• Core business uses

• Core business related uses

• Potential future core business uses

• Transitional

• No potential future core business uses

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Terms (8)

Stranded assets are real estate assets with no potential future core business uses.

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Another Inventory Classification (3)

• Core business uses

• Core business related uses

• Potential future core business uses

• Transitionals

• No potential future core business use

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Terms (9)

A needs assessment is a systematicexploration of the way “things” areand the way they should be. Usually,

these “things” are associated with organizational performance.

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Terms (10)

A feasibility study is a preliminary study undertaken before a project starts to ascertain the likelihood of the project’s success, in termsof investor objectives.

A financial analysis is an assessment of the viability, stability and profitability of a project.

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Terms (11)

Hurdle or discount rate is an interest rate to convert future payments into present value.

Net present value is the difference between the present value of all the positive cash flows and the present value of all the negative cash flows.

Internal rate of return is the rate that discounts future cash flows to the amount of the original investment.

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Objectives (1)

At the conclusion of the course, you will be able to…

• Define and understand the differences between property and asset management

• Express an understanding of the goalsof asset management

39

Objectives (2)

At the conclusion of the course, you will be able to…

• Identify the needs and prerequisites of a successful asset management program

• Develop and implement an asset

management program

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Thank you!

703-PT – Revision 2 – 04.30.07.INT