CRE, Moneyball and the Quest for More Productive Office Space

by CoyDavidson on July 19, 2012

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Moneyball: The Art of Winning an Unfair Game is a book by Michael Lewis, published in 2003, about the Oakland Athletics baseball team and its general manager Billy Beane and last year a film starring Brad Pitt, based on the book was released.

The central premise of Moneyball is that the collected wisdom of baseball insiders in regard to assembling a team is subjective and often flawed. The focus of moneyball is the team’s analytical, evidence-based, sabermetric approach to assembling a competitive baseball team, despite the A’s disadvantaged revenue situation.

What does this have to do with CRE?

The enterprise approach to office space in the past has been about balancing a workplace that provides convenient access to customers, projects the desired image and attracts the best employee talent versus controlling occupancy costs.

Historically companies have always focused the spotlight on projecting the cost side of the equation when making real estate decisions with the goal of obtaining the highest quality office space that fits within the budget as a percentage of projected revenues.

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The Moneyball Era

There is no question that projected occupancy costs are a primary factor in building selection for office tenants, and while office space efficiency is a key component to minimizing occupancy costs, today companies are paying closer attention to how office space and real estate impacts the performance and productivity of their workforce.

We live in an increasingly complex business environment that places a premium on productivity as well as the need to control costs to remain competitive. Many are predicting dramatic changes to the workplace stemming from the emerging utilization of mobile devices such as smart phones and tablets, cloud computing, changing demographics in the workforce and corporate efficiency initiatives.

Recently, more companies have started to experiment with alternative workplace strategies as well as open, collaborative workspaces with fewer private offices or dedicated individual workspaces. I don’t agree with the prediction that the need for office space will ultimately go away, but I do agree that the office of the future will look different than it does today.

Today, corporate real estate requires thinking more like Billy Beane and how the office can meet the expectation of delivering higher performance on a budget. Welcome to Moneyball for CRE.

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