Succession Planning for Commercial Real Estate Firms: Benefits, Best Practices and Common Challenges

Leaders of commercial real estate companies often face additional, unique challenges due to their firms’ complex valuation processes, intricate tax strategies and multifaceted ownership structures.

The NAIOP Research Foundation, in conjunction with Wipfli and The DRG, authored this study,
"Succession Planning for Commercial Real Estate Firms: Benefits, Best Practices and
Common Challenges," to explore the challenges and opportunities associated with succession planning for CRE firms.

Best practices include:

• Begin the planning process early, preferably years before an expected succession. Early planning reduces risks associated with an unplanned transition and gives a firm more time to prepare successors.
• Carefully identify successors who will be capable of and interested in running the firm, and prepare them with any additional training or experience they will need.
• Leverage planning teams and outside experts. Establishing a transition committee and engaging objective third parties can help a firm navigate the process.
• Communicate about the succession plan with employees, lenders, investors and other stakeholders to build confidence in a successful transition.
• Regularly reassess succession plans and make changes as needed to adapt to new circumstances.