Three-minute guide to optimizing your real estate
Uncover five pro tips for real estate optimization.
So you’re ready to unlock new value from your real estate? Then first, give yourself a pat on the back for making it past the initial roadblock: dispelling the conventional perception that corporate real estate (CRE) is a necessary evil on the expense ledger, rather than a strategic tool in your organization’s belt.
Optimizing your real estate can support a range of broader organizational goals, from uncovering efficiencies that enhance performance, to helping shape human experiences that keep your organization ahead in the war for talent.
By leveraging new opportunities in advanced data and analytics as well as mobility trends and demographic change, you can reduce costs, improve utilization, and ultimately drive more value out of your organization’s owned and/or leased assets. In fact, we’ve seen thoughtful optimization enable our own clients to curb real estate costs by 10-30 percent.
The time is always right to initiate this effort. Whether you’re looking to turn around an underperforming facility, make informed decisions around a possible merger or simply respond to changing work habits, it’s well worth your while to align facility planning with your larger strategy.
Five pro tips for real estate optimization
While the landscape of every organization will pose its own challenges and opportunities, some strategic truths are universal. Following are key considerations in any optimization strategy:
- Go for the #PropTech gold. Goodbye “guesstimates,” hello data-driven intelligence. Today’s leading CRE teams are leveraging the Internet of Things, big data and predictive analytics, and machine learning to improve a range of valuable decisions. From swiftly comparing lease rates to market rates across your portfolio to pinpointing facilities with above-average operating costs, CRE tech tools enable you to determine which facilities are performing optimally—and where there may be room for improvement. You can also uncover more insights from the vast quantities of real-time data your buildings turn out, with a real estate intelligence platform that helps measure, aggregate, report and evaluate performance.
Proptech solutions aren’t only available to the biggest organizations out there. A trusted service partner who has already invested in technology tools and expertise can equip you with the toolset it takes to transform data into actionable insights.
- Understand the true cost of owning, leasing and operating your real estate.
Traditional accounting systems don’t capture occupancy costs as consistently or holistically as they could, or should. In fact, in many cases, the number on the general ledger may be significantly lower than actual real estate costs. But with intelligence tools that track total occupancy costs, you can uncover important trends over time, like whether costs are rising, staying flat or falling, and compare costs among specific facilities, going beyond rent or mortgage payments to cover everything from snow removal and landscape to energy usage and security. This broader understanding is critical for organizations in the midst of change—whether driven by organic growth—when the demands of expansion can constrain your capacity to track real estate costs.
- See how your metrics measure up against the competition. Most organizations benchmark revenue, market share and other metrics to see where they stack up against peers, but fewer apply a similar focus to their real estate. Benchmarking big picture measures–think total occupancy costs, space utilization and operating costs–as well as finer points like maintenance and taxes can generate valuable insights toward more efficient, productive facilities that also enhance the human experience.
- Gain fresh insights on the own vs. lease debate. The fast-changing world is making today a prime time to analyze the risks, economics and strategic value of leased versus owned assets. Such analysis can help you achieve greater goals, whether it’s in your organization’s best interest to move debt off the balance sheet and gain agility by leasing, or forge ahead on a prudent longer-term investment.
Active, tech-fueled lease management can help control leasing costs, streamline the process of creating lease abstracts, and automate monitoring for approaching rent escalations and lease expirations. You can also more easily assess whether your rents are above, below or on par with the market—and, in turn, whether there may be an opportunity to renegotiate the rate or reduce underutilized square footage.
- Invest in space management and planning. Are your facilities being used to their full potential? Chances are, they are not, considering JLL research shows that on average, 40 percent of office space is underutilized, not to mention all the half-empty classrooms, waiting rooms and other spaces you may have in your portfolio. Rise above this statistic with workplace management and business intelligence tools that fuel utilization studies and occupancy planning.
Whether your industry is healthcare or higher ed, life sciences or government, you can use real-time data and business intelligence to optimize the real estate footprint. Wow the C-suite by uncovering savings opportunities, while delivering well-designed, well-located facilities—that people will actually use.