Corporations Face Steep Uphill Challenges with Their Real Estate for 2018 and Beyond
The world of corporate real estate has become more complex than ever. Landlords are far more sophisticated, partly due to better information and also due to the prevalence of institutional owners.
On top of that, markets around the country, and around the world, continue to tighten measurably. Increased demand and lack of good quality supply are diminishing the corporate space user’s leverage. The challenges brought about by these economic and fundamental shifts and greatly compounded by the antiquated service and business models of the vast majority of real estate service provider firms. All this just when corporations are looking to transform their real estate holdings from static cost centers into strategic enablers of their business plans! Some keys to focus on:
FIND OTHER OPPORTUNITIES FOR COST REDUCTION BEYOND RENT
- Sweep your portfolio, practices and standards regularly for holistic opportunities.
- Creatively increase your space efficiency quotient.
- Boost employee productivity and morale.
- Improve your ability to attract and retain talent through the application of Labor Analytics.
- Pay more attention to government incentives opportunities.
- Start the process of site selection earlier.
- Reduce your energy costs.
- Put better real estate management technology to work.
WHAT TO LOOK FOR IN A STRATEGIC PARTNER FIRM
- Are they 100% aligned with your best interests? Too many firms in the real estate services industry are wrought with conflicts. Do they represent landlords? Do they represent your company’s competitors?
- Who is really doing your work? Too many firms put senior practitioners up to secure your business, but then the client’s important work is delegated to junior people behind the scenes.
- Are you getting best in class, non-conflicted services from their partners? Too many firms offer “in house” adjunct services like space planning, government incentives & project management. It seems like a great idea at a reasonable cost. However, their partners are NEVER best in class. More often than not, they are a guise to get the client’s transactional business and increase overall fees. Your team should know who the best service providers are in each discipline and in each market and should be able to align and manage them in your best interest at competitive costs. The benefit and end result differences in these two approaches can be startling.
- Do they truly specialize in national work? Having offices in most every city under the same brand is not an indicator of national capabilities. More often than not, it’s actually a “red flag”. There is a huge difference in results achieved between practitioners that “dabble” vs. the ones that truly specialize. The resulting cost difference has been proven to be north of 20%. Can your team pull in local talent from any firm based on your needs and criteria?
Not sure if your company’s current real estate team can handle the challenge?
Call Mike for a complementary review of:
A key lease
Your overall portfolio
Your standards and practices
Anything else real estate related that’s on your mind
Mike Maroon, SIOR is the Founding Partner of The Acclaim Group, a leading real estate adviser to corporations locally, nationally and globally.
THE ACCLAIM GROUP, LLC
108 North Union Avenue, Suite 2
Cranford, New Jersey 07016