As businesses and corporations exit the Covid-19 pandemic, the Great Resignation, and face the possibility of a recession, they are being forced to re-evaluate their corporate real estate strategies. Ongoing development of hybrid workspaces, sharing of workstations, return-to-work initiatives, work-from-home strategies, and mergers and acquisitions are creating opportunities for businesses to down-size or right-size their real estate portfolios. Following are several strategies to consider when managing your corporate real estate portfolios.
Initially, we need to define the responsibilities of a corporate real estate leader and the questions they encounter:
Space planning and forecasting – Corporate real estate leaders help to discover the short and long-term goals for the company's strategy. Are you growing due to mergers and acquisitions, growth in sales, or are you downsizing due to reducing costs or work-from-home initiatives?
Space accounting and cost analysis – How are you justifying the costs of your space to your finance team or executives? In order to provide the most accurate information, corporate RE leaders need to track the total costs of square footage by building/department/tenant.
Conducting cost-benefit analysis – How do you determine whether each property is worth the cost of the lease and the cost of operations? What are your costs for utilities and maintenance? Do you provide amenities? What is your ROI (Return on Investment) for the property? Do you measure space utilization vs. seating assignments?
Improving employee and tenant experience – According to the latest CBRE Occupier Sentiment Survey, conducted in the spring of 2021, 87% of large companies plan to adopt hybrid work. Even if they return to the office, employees want a workplace that provides a comfortable, inspiring place to work. A workplace where they can choose from a variety of workspaces or rooms, depending on the work they will be performing that day.
Overseeing building design, construction, and vendors – During the pandemic, many new projects were put on hold. Real estate leaders focused on renovating/repurposing existing space, changing to meet the needs of the new workspace. During the pandemic, if the workforce needed to be on-site, the focus was on providing separation of workers, cleanliness, and using technology for conducting meetings. Now that things have returned to “normal”, new projects are coming back online and the real estate leader must focus on managing multiple vendors, including architects, engineers, general trades, food service providers, and many more.
What can you do as a corporate real estate leader to prepare for the future? The key to fine-tuning your corporate real estate strategy to the needs of your company will be asking the right questions and then spending enough time exploring the answers.
More Questions to consider:
Where do employees commute from? Where are clients located? Is there close proximity to public transportation?
What are current market rates/concessions? How long does the lease need to be?
What building amenities are desired? Is a new build or an existing building more conducive? What growth opportunities are available?
To help answer these and many more questions, consider the following strategies.
Flexible space strategies – Re-evaluate every property/building currently in your portfolio. Do you need to be located in a downtown environment or can you exist in a suburban location, and vice-versa? What is the typical commute time for your workers? Does it make sense to have smaller facilities closer to where they live, instead of a large corporate presence?
Embrace a hospitality mindset – If you treat space as a service, similar to a hotel, the experience becomes everything. Can office hoteling be more cost-effective than assigned seats for everyone?
Invest in the right workplace technology – In today’s environment, having the right technology available makes it easier to manage your space and requirements. It allows you to adjust spaces and seats quickly as your needs change. Desk booking software and user-friendly mobile apps allow workers to find people, reserve rooms, and request services when needed.
In today’s marketplace, your corporate real estate strategy can be directly tied to your business success. You need the right commercial real estate portfolio to help with this and you need to manage that portfolio effectively. A lease management platform improves all major parts of the process: broker relationships, site location, lease negotiations, lease accounting, etc. As commercial real estate becomes more complex, consequential, and competitive, it risks becoming a liability.
Engaging a commercial real estate broker can be an asset to any company re-evaluating its corporate real estate strategy —even if there is a dedicated real estate team in-house. Commercial real estate brokers have extensive market expertise and knowledge, especially in markets where a company might be new and unfamiliar. They know the ins and outs of leasing in a particular building or neighborhood, which makes it faster to find corporate real estate that supports the needs of your business.
Final Thoughts
In today’s marketplace, your corporate real estate strategy can be directly tied to your business success. You need the right commercial real estate portfolio to help with this and you need to manage that portfolio effectively. A lease management platform improves all major parts of the process: broker relationships, site location, lease negotiations, lease accounting, etc. As commercial real estate becomes more complex, consequential, and competitive, it risks becoming a liability.
Engaging a commercial real estate broker can be an asset to any company re-evaluating its corporate real estate strategy —even if there is a dedicated real estate team in-house. Commercial real estate brokers have extensive market expertise and knowledge, especially in markets where a company might be new and unfamiliar. They know the ins and outs of leasing in a particular building or neighborhood, which makes it faster to find corporate real estate that supports the needs of your business.