Driving Value with Corporate Real Estate
Today, the role of Corporate Real Estate is increasingly challenging and many companies have approached real estate in the past purely as an administrative function, rather than taking a more strategic mindset. CRE executives and their service providers are being challenged by senior management like never before to reduce occupancy costs and contribute to bottom line savings.
CRE3 Consulting recently surveyed a pool of corporate real estate and facility management professionals and participants were asked:
“Under the current challenging economic times there is increasing need for organizations to reduce real estate related operating expenses thru lower occupancy costs. What steps or initiatives do you have in place to reduce occupancy costs?”
Some of the responses as outlined in the Corporate Real Estate Benchmarking Whitepaper included:
- “Maximize our space utilization and densification”
- “Utilize energy management systems for energy reduction”
- “Out source maintenance to third party providers”
- “Exercise early renewals at the bottom of market rents”
- “Adjust acceptable level of utilization to determine which spaces we can consolidate into facilities that have more attractive rent rates or owned facilities that are more efficient to operate and opt not to renew the lease or sell the surplus asset.”
- “Reduce the overall need for space by implementing alternative workplace strategies of ‘hot desking’, hoteling, creating ‘touchdown areas,’ and more efficient room booking”
- “Utilize information systems to develop optimum Cost/SF metrics and identify those facilities that could be subject to cost reduction, consolidation, or disposition based on a financial performance benchmark”
- “Address operational efficiency of our owned facilities and thereby reduce energy consumption”
- “Decrease the utilization of expensive facilities with space management to show vacant and under-performing facilities”
- “Rationalize our portfolio and consolidate staff/facilities to dispose of non-core assets”
My 3 part series of posts titled “Driving Value with Corporate Real Estate” takes a look at various methods and strategies to align Corporate Real Estate with your overall business objectives for better operating efficiencies and financial performance.