Real Estate Investment Trusts (aka REITs) have been popular investment vehicles, with many being traded on major exchanges, enabling easy investing in real estate. Meanwhile, managing REITs is associated with additional challenges due to their complex and diversified structure.
While all REITS heavily rely on governance and compliance work, many of these organizations still have manual processes for their entity management, which hinders their business growth. Below, we discuss more in detail the main pillars for changing your legal entity management, boosting data visibility across the organization and increasing the quality of your compliance.
Single Source of Truth for Your Data
Most REITs manage multiple properties and management companies and constantly create new legal entities for various projects. When information about these entities is stored in multiple disorganized spreadsheets, it becomes difficult even to find these data, let alone ensure timely compliance or visualization of your records.
When the number of legal entities constantly increases, the new amount of management work calls for a system to serve as a single source of truth for all legal entity data, organized and stored in a coherent format. A modern legal entity management software can achieve this and more, providing a well-organized database for all corporate records, auto-populated templates for creating new entities, audit trails, useful reminders and org charting functionality, among other options.
Automated Filings and Compliance
It is a well-known fact that REITs are heavily regulated organizations both on a local and federal level. With such regulatory scrutiny, REITs have to do a lot of compliance work, relying on the quality of their corporate records and their internal or external compliance teams.
When entity information is stored in Word documents or Excel spreadsheets and is managed manually, the teams start to struggle with the ever-increasing workload, which leads to inefficiencies, higher costs and lower quality of governance and compliance. This creates compliance risks, can lead to missed deadlines and filing errors and generally hinders the development of the organization.
Meanwhile, those real estate investment companies which choose to work in entity management software can significantly increase the quality of their compliance work thanks to a central database of corporate data and automated filings. Their teams become less stressed about important deadlines, assisted by important reminders, virtual minute book capabilities and electronically signed documents.
Automation Tools for Org Charting
In many cases, REITs rely on org charts to represent their businesses to investors and need multiple org charts for their raising decks. Meanwhile, most real estate investment companies have very large and complex structures. When the teams try to represent those structures and various ownership relations on org charts, the results are often far from accurate and take too much time and effort due to manual processes.
Automated Org Charting
When org charts are generated using a modern entity management software like Athennian, the teams no longer have to retrieve data from spreadsheets, enter them into org charts, draw ownership connections manually or puzzle over the best visual representation.
Instead, the org charting is automated based on the data, which are auto-populated into the org charts. With entity management software, org charting your business becomes an easy automated process, taking minutes instead of hours and providing always accurate results.
Bringing Out Details as Needed
Org charts can be used for various purposes, including representing the whole organization or only certain subsidiaries or projects. In many cases, org charts need more than just the name of the legal entity and its connections and should include other details, such as percentage of ownership or a type of tax structure. When org charts are done in Athennian, the users can toggle details on and off, making org charts as informative as needed, for example, by showing each entity's registration ID, formation date, tax structure and other details.
Rich Functionality and Customization
In Athennian, the org charting module presents users with extensive customization options, including various geometric shapes for different tax structures and a color-coding system for representing different jurisdictions. It is possible to zoom an org chart in or out and download only a section of the whole in various formats, making it easy to share the files for presentation among the team and investors.
Unrestricted Collaboration Across the Board
With most REITs being large organizations including many entities and actors, cross-departmental collaboration becomes a substantial challenge. Meanwhile, REIT teams need the ability to have instant access to corporate records, which is hindered when entity management is disorganized or relies on spreadsheets stored locally.
With entity management software, real estate investment companies receive the instant benefit of having a central cloud database that can be accessed from anywhere on any device. Businesses can further benefit from enabling restricted access rights for various actors, improving collaboration with external teams.
Learn More About How REITs Can Benefit from Entity Management Software
Legal entity management software can help REITs in many more ways to improve the quality of their governance and compliance work, optimize their workflow and contribute to overall business growth and development. For more information about how you could benefit from managing your legal entities with Athennian, please don't hesitate to request a customized demo with our business entity management expert.