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News release

CHICAGO, IL

Top 10 Benefits of Outsourcing Life Sciences Real Estate and Facilities Management

Jones Lang LaSalle (JLL) looks at the significant impact outsourcing corporate real estate and facilities management can contribute to life sciences productivity.


CHICAGO, March 13, 2013 – The lifecycle of pharmaceutical, medical device and biotechnology products that save and enrich lives requires billions in investment – and not just in direct scientific activities. Supporting the science, manufacturing and sales functions are the actual facilities—labs, factories, offices and so on. Strategic investment in those facilities can drive profitability and productivity, when real estate strategies are supported by industry-leading professionals and technology. Outsourcing corporate real estate and facilities can improve corporate performance metrics such as efficiency ratios and “R&D as percentage of revenue” and other measures that reward effectively allocated capital. Allowing real estate experts to deal with the real estate also frees corporate managers to focus on the mission-critical activities that take place within the buildings, rather than the space itself.

Most large pharmaceutical companies are already realizing the benefits of outsourcing. However, many middle-market life sciences and biotechnology companies have not yet taken the step of outsourcing this non-core function capable of significantly impacting key business metrics. Contrary to popular perception, outsourcing facilities management can produce measurable competitive advantage even for middle-market companies that are not multinational conglomerates.

Experts from Jones Lang LaSalle (JLL) have compiled the Top 10 ways that outsourcing corporate real estate and facilities management can potentially drive productivity, reduce expenses, engage employees, shorten the R&D lifecycle and keep manufacturing compliant and on-schedule, as follows.

  1. Improve ROI of the corporate real estate portfolio.
    Outsourcing corporate real estate and facilities management can lead not only to cost savings from centralized purchasing, energy management and so forth, but also more strategic use of the facilities that a life sciences company owns or leases. Under-utilized or poorly located facilities can be a drag on revenues, for example. Real estate can drive better company-wide performance on key benchmarking factors such as efficiency ratios, all while driving productivity that by nature improves other measures of ROI as well.  For example, a sales force may see its revenue generation figures rise after fully implementing a new workplace strategy. Additionally, there is particular value for pharmaceutical companies who outsource real estate activities within the R&D function, where reducing the cost of operating, managing and acquiring research-related real estate can in turn improves the key metric for “R&D as a percentage of revenue.” Commonly used by shareholders and analysts to benchmark a company’s management strength against industry averages, leveraging real estate strategies to improve that number becomes critical as a company prepares for M&A or an IPO.
  2. Access to best practices for corporate real estate management.
    An outsourced real estate services provider with a global portfolio will bring diverse best practices to bear on a life sciences company’s portfolio. Large-company practices can be applied to middle-market companies, and approaches used in one industry can be applied to life sciences organizations. For example, an outsourced real estate service provider can apply best practices to shorten the considerable lag time between the completion of a merger and execution of the follow-on real estate strategy.
  3. Drive overall real estate productivity with consistent service delivery.
    With its single-minded focus, an outsourced real estate services provider can ensure that facilities and employees across the organization benefit from standard operating procedures and support. This streamlined approach improves efficiency, along with increasing employee satisfaction and productivity.
  4. Gain access to corporate real estate analytics and intelligence.
    With its single-minded focus, an outsourced real estate services provider can provide access to all of the latest facilities performance measurement tools and use this intelligence to boost performance. Data may reveal, for example, cost-per-researcher is higher in one facility than in another. Leveraging the real estate partner’s tools and metrics empowers the life sciences company to clearly see such inefficiencies and address them strategically and holistically.
  5. Reduce procurement costs with centralized purchasing.
    Representing a large number of client companies and associated facilities, a professional real estate company will have a centralized purchasing system and negotiating power that result in cost savings for all clients. For example, the provider can leverage the collective buying power of its life sciences clientele in purchasing supplies for laboratories or GMP-regulated areas, and negotiating contracts with specialized vendors.
  6. Support regulatory compliance in facilities operations.
    As one of the most highly regulated industry sectors, life sciences companies face highly technical challenges in managing facilities. Not only must companies address compliance with cross-industry building regulations and insurance, but also industry-specific issues such as FDA requirements, equipment maintenance and laboratory safety. Outsourcing to an expert facilities team specializing in life sciences can help a company improve its compliance procedures and on-site compliance.
  7. Improve safety and security.
    An outsourced real estate services provider with life sciences expertise can help a company manage risks associated with handling extremely valuable or hazardous raw materials and finished products. Sophisticated security systems are required to reduce the risks of theft or threats to employees working with highly valuable ingredients or on controversial projects.
  8. Provide a career path for real estate and facilities employees.
    Many in-house life sciences real estate and facilities professionals can benefit from partnering with an experienced real estate firm. Working together can significantly enhance the quality of operations as well as the quality of the employees work experiences. Access to industry-leading training, competency testing, technical mentoring and goal setting translates to a more satisfied workforce with a clear professional growth path. Career satisfaction, in turn, boosts productivity, recruitment and retention.
  9. Achieve energy cost savings through use reduction and price negotiation.
    Through the application of best practices and centralized purchasing, both the cost of power and the amount of energy used can be significantly reduced.  Additionally, the latest smart building technology and service platforms can be leveraged to ensure that each building is operating at peak efficiency, and that maintenance issues are not resulting in unnecessary energy costs.
  10. Transform corporate real estate from cost center to strategic investment.
    Having survived the patent cliffs of recent years, the life sciences industry has emerged a leaner, more focused sector. The new challenge for life sciences firms is to control costs without sacrificing research timelines or manufacturing safety. Outsourcing some or all aspects of the real estate and facilities functions can play a pivotal role in leveraging the corporate real estate portfolio as a strategic investment in support of the mission to enrich and save lives.

Jones Lang LaSalle has a team of real estate and facility management experts dedicated to helping life sciences companies optimize and manage their real estate portfolios. The firm provides a comprehensive range of facilities management services to the life sciences community covering 70 million square feet of research, manufacturing and commercial space. Jones Lang LaSalle’s industry leading full-service platform includes: integrated facilities management, engineering and operations, energy and sustainability, transaction advisory services, lease administration, project management and a new platform for integrating laboratory services, Labwell.

A leader in the real estate outsourcing field, JLL’s Corporate Solutions business helps corporations improve productivity in the cost, efficiency and performance of their national, regional or global real estate portfolios by creating outsourcing partnerships to manage and execute a range of corporate real estate services. This service delivery capability helps corporations improve business performance, particularly as companies turn to the outsourcing of their real estate activity as a way to manage expenses and enhance profitability.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management. For further information, visit www.jll.com.

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