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How to Create a Strategic Plan
Looking for a way to take your company in a new and profitable direction? It starts with strategic planning. Keep reading to learn what a strategic plan is, why you need it and how you can strategically create one.
What Is a Strategic Plan?
When it comes to business and finance, strategic planning will help you allocate your resources, energy and assets. When implemented, a strategic plan will begin to move your operations in a more profitable direction. The primary goal of the plan is to ensure you and any other stakeholders are on the same page and striving to reach the same goal.
Creating a strategic plan requires a disciplined effort. Once you put the plan into action, it will influence the segment of customers that you target, how you serve those customers and the experience those customers have.
Assess the Current Infrastructure and Operations
The first step in creating a strategic plan is to carefully assess your existing infrastructure and operations. You can do this through a SWOT analysis, which is an analysis of the company’s strengths, weaknesses, opportunities and threats. The goal here is to pinpoint the resources that you use to carry out your day-to-day operations, to look at your monthly revenue patterns, to list any company challenges related to the customer experience and, most importantly, to look at your marketing methods and ways to improve the overall customer experience.
Creation of Mission Statement and Objectives
The next step is to create a mission statement. You may already have one, but it’s important to note your mission at the top of the strategic plan document you create. This ensures everyone is focused on the same goal. Your mission statement should cover why you started the company and what you intend to accomplish through the products and services that you offer.
In addition to the mission statement, make sure to outline both short- and long-term objectives. List the objectives according to their priority and designate certain managers or employees to be responsible for each one. Also, jot down the resources that will be used to achieve each objective.
Now that you know what you’re trying to achieve and who is responsible for each goal, it’s time to deploy the plan and measure its progress. A weekly meeting is extremely important for all managers and stakeholders provide feedback. Your goal is to determine if the company is headed in the right direction. If not, you’ll need to revise the strategic plan accordingly.
Strategic Plans Are Ongoing
Once your strategic plan helps you achieve several objectives, it’s smart to regroup and set new objectives. As your company grows, you can set new goals to ensure the company keeps moving forward. You can share the success of your strategic plan with potential investors as a way to tap into new capital funding.
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6 steps for creating a strategic plan in corporate real estate.
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November 01, 2019
Contributor: Sharon George
CRE teams should understand how multiple stakeholders contribute to corporate strategic goals.
As organizations develop their corporate strategies for the year, corporate real estate (CRE) teams need to make sure they can keep the lights on — quite literally — and continue to work on activities outside of their traditional remit, looking beyond cost and space reduction to find ways to support company strategy .
“ It’s important to consider the impact of CRE on fulfilling corporate goals rather than just tracking operational metrics”
“ Because business needs and technology capabilities are shifting rapidly, CRE is expected to deliver value faster than ever , says Douglas Shapiro, Senior Principal, Advisory, Gartner. “ CRE teams must continue to implement strategies that are cost-efficient and that enhance the employee workplace experience.”
The following six steps will help.
Lay the groundwork
Heads of CRE teams must first define and set a vision for the function. To do this, be sure to avoid an insular view by engaging business partners early. Consider which activities no longer support the vision to free up resources to support new initiatives.
The CRE team should also collaborate with stakeholders, particularly the CFO, to set out a timeline for the strategic planning process and obtain commitment to the plan, which will be important to ensure funding of CRE initiatives.
Even the best-laid plans can be upended by short-term priorities, so teams will need to design plans that can be managed and tracked through the year.
Learn more: Five shifts corporate real estate must make for the future
Understand business goals
Heads of CRE should collaborate with C-level executives and other senior managers to understand how they can support long-term strategy. CRE can then assess external forces (economic, regulatory and technological factors) and how they will affect real estate priorities.
Managers of different corporate functions may not completely understand their real estate requirements, so CRE teams should look at the overall objectives and offer support, when possible. It is crucial to have confident customer relationship managers on the team to have constructive conversations around occupancy planning and space forecasting — both of which are critical to facilitating business goals.
Identify improvement areas
Next, CRE leaders will need to evaluate the function’s current capabilities. Through self-assessment and business partner feedback, leaders can better understand the strengths and weaknesses of the team.
It’s important to consider the impact of CRE on fulfilling corporate goals rather than just tracking operational metrics. Don’t simply focus on hitting metrics.
Determine how to achieve real estate objectives
CRE leaders should leverage their knowledge of the team’s capabilities to translate business goals into functional objectives. Once CRE teams determine how to fulfill these goals, they then need to identify metrics to measure progress, determine the resources required and assess the risks that could affect their plan.
Ultimately, the end goal is for CRE to obtain a prioritized list of strategic initiatives that also includes metrics to measure them.
Communicate your plan to stakeholders
To drive alignment and commitment across the function, the strategic plan must be communicated to different stakeholder groups. Build a dashboard that connects portfolio and workplace performance with business outcomes. Dashboards should contain compelling metrics for the target internal audiences to support the value proposition of CRE teams.
With input from senior leadership , the plan can then be delivered to business-unit leaders, the function’s leadership team and then to all staff. It’s key to deliver a consistent message across the organization to ensure that employees don’t receive conflicting information.
Learn more: Focus on the right corporate real estate activities
Monitor your progress
Once the plan is implemented, employees have to measure progress against defined objectives. Periodically reassess guideline relevance to ensure changes in CRE strategy and local needs are reflected. Reevaluate the asset management task list to add or eliminate tasks . This is a crucial step to reassure business partners who are typically risk-averse and could hinder the execution of the entire strategy.
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CRE Strategic Planning in the New Normal
By chris zlocki | 20 april 2022.
The way businesses occupy real estate portfolios in the “new normal” could change dramatically. Questions such as offshore footprint, remote work, and balance of owned, leased, and flexible space are just some of the areas where a re-engineering could be required. Many CRE leaders will have the opportunity to support core business transformation and innovate the CRE strategy, as well.
Developing restructured plans can, of course, illustrate what CRE brings to the business. This will require a holistic approach that spans multiple disciplines to provide a comprehensive road map for change. We recommend following these three steps:
- Understand scenarios for the future of the business
- Develop CRE strategy and plan for each business scenario
- Implement immediate opportunities and prepare for future clarity
Understand Scenarios for the Future of the Business
Ensure a clear understanding of the potential direction of the business. We like to remind people of the golden rule of CRE: “don’t let a real estate decision drive business strategy.” Of course, business transformation, or even less transformational shifts, is not easy to predict even for the C-suite. So, instead of the burden of choosing one, map out several more likely scenarios that the C-suite is envisioning. Ideally these scenarios are developed with CRE having a seat at the table, but regardless, the understanding of the core business scenarios under constant consideration by the C-suite is most important. These commonly include digital transformation, supply chain re-engineering, changes to target markets, customers and/or geographies, shifts in the makeup of the workforce, less transformational but incremental changes to the status quo, etc.
Develop CRE Strategy and Plan for Each Business Scenario
Once the potential directions (the scenarios as described above) of the core business are understood, CRE strategic planning can take shape. Key questions to help frame the scale of change include:
- What are the important core business key performance indicators and measures you are solving for? Examples: sales performance, talent attraction, employee engagement, productivity, operating and capital expense reduction.
- What CRE gaps do you see between what exists and what is needed to meet future business objectives? Consider company culture, management structure, metrics from above, the definition of success, decision making, priorities, etc.
- What are the emerging strategies, opportunities and disruptors that will change or challenge how work is performed in the new normal (in HR, IT, Brand, RE/Facilities, Other)? Examples: talent hub locations, distributed work requirements, new technologies, significant shifts in customer or political expectations, etc.
How and where will the business continue to expand/contract in regional and global centers.
1. Analyze “how work gets done” for each business scenario
The developed core business strategy scenarios will provide the basis for analyzing CRE alternatives and questions such as “what is work in the future” and “how should the work get done”? There will be multiple CRE alternatives, given there are multiple business strategy scenarios. Additional questions include: Where will the work be occurring? Does the work require more individual contribution or collaboration? Does the work require partnering with external stakeholders (universities, partners, alliances, government, etc.)? How will artificial intelligence (AI), machine learning and advancing technology define how and where people fit within the lines of business?
2. Focus in on one of four primary CRE strategies for each
As you answer these questions on the potential CRE models (workplace, footprint, CRE organizational design, etc.) that apply to each business strategy scenario, you will see a primary CRE vision and strategy that emerges for each. We have previously shared in some webinars and other materials that we see that most business will have one of four CRE strategies as their primary focus:savings, optimization, experience or growth. This will then lead to important tactics unique to each of the four.
3. Develop tactics/action plan for each
Once you select the priority CRE strategy for each business strategy scenario, you can then develop plans to support the intended outcomes of each. The plans can be laid out through actionable steps.
To develop action plans and tactics, we recommend incorporating these five key areas:
a) Optimization of Financial Structuring – Assess the financial position relative to your company’s balance sheet and operating expense requirements. Performa a post-COVID-19 stress-test cashflow and review the balance sheet requirements with your finance organization. Analyze opportunities to reduce cost and raise capital by unlocking underutilized equity sitting in your real estate portfolios. If your balance sheet needs shoring up, consider a sale-leaseback or other potential capital markets opportunities.
b) Workforce Re-alignment – COVID-19 has dramatically changed the way we will work in the future. Given recent changes in remote and distributed work, this provides the opportunity to realign access to key talent with the business units they serve either by examining realignment of functions to take advantage of key labor markets or more distributed labor pools to align with increased use of remote work policies.
c) Portfolio Rationalization – Re-examine your current portfolio plan, prioritizing locations for immediate impact relative to business disruption and critical lease/project dates. Any analysis should be tempered by the impact of remote work and potential change recommendations to the business units noted above relative to in-house versus remote work. Scenario options should be developed to right-size assets through consolidations, decommissioning, etc.
d) Workplace, Flex and Remote Work – How has remote work changed the way your employees will work in the future? You will need to develop plans that translate the new cultural and operational priorities into workplace strategies as well as measure the utilization emerging from the workplace and remote work changes made.
Incorporate ideas around flexible workspace. What role did flex workspace play during the pandemic? How effective was it as a solution to help your businesses? How does this change your portfolio strategy to be more inclusive in incorporating future location strategies?
e) Change Management – Develop a plan for managing organizational and workplace change. Questions focused on the right people in the right places will be top of mind. Where will the work be occurring? Does the work require more individual contribution or collaboration? How will AI, machine learning and advancing technology define how and where people need to fit within the lines of business moving forward? All these considerations will need to be planned and managed from a real estate footprint emphasis.
4. Identify commonalities / differences in each plan
Once the various action plans and tactics are developed for each CRE strategy tied to the applicable business strategy scenario, an analysis can be done to bring the next steps into focus. This starts by answering the key question of, “what are commonalities and differences between action plans and tactics?” In addition, this can also include the evaluation of today’s CRE model, and whether the CRE solutions in place today are still applicable to some of the new action plans?
Implement Immediate Opportunities, and Prepare for Future Clarity
The commonalities will lead to a clear understanding of immediate tactics that fit all or most CRE strategies, and ultimately all or most business strategy scenarios. Implement these short-term, after demonstrating to other stakeholders and the C-suite how these tactics carry a plan forward without incurring unnecessary risk of unaccommodated changes to the business.
Further, identify the differences between each action plan. These differences can frame the basis for an ongoing process of ensuring that longer-term alternatives and decisions are ready to act on once the business is ready.
To learn more, please contact our Enterprise Consulting team , including experts in management, workplace, portfolio and financial disciplines to co-create your revised CRE strategy, portfolio and operating plan.
About the Author:
Chris leads Consulting for Colliers’ Occupier Services platform. He oversees service lines including portfolio strategy, workplace advisory, flexible workspace, supply chain solutions and workforce analytics. As the Head of Client Experience, Chris also leads efforts to grow client relationships and expand service offerings for our global enterprise clients.
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The Ultimate Guide to Corporate Real Estate Strategy
Last Updated on September 27, 2022 by Morgan Beard
A corporate real estate strategy has never been more important.
That might sound counterintuitive given the unprecedented shift to remote work we saw due to the COVID-19 pandemic. Offices emptied, and companies discovered they could make do without them — at least temporarily. However, keep this in mind: Companies might need less square footage than they did before; many people will continue working remotely after the pandemic; the idea of shared workspaces will never be the same again. But that doesn’t make workplace strategy any less relevant to a company’s success.
Let’s run through an example. Many commercial spaces aren’t working as intended because they no longer meet the needs of staffers looking for a flexible work situation or enhance a company’s ability to attract talent. Every indicator suggests companies are reevaluating their office footprint, but that raises a host of difficult questions: How much space is necessary? What’s the ideal location? Which amenities are most important? What’s the market price point for rent?
With office vacancies not predicted to return to peak pre-pandemic levels until 2025 and commercial landlords more willing to negotiate lower rents , there’s an unparalleled opportunity to find a great deal. Unfortunately, the right location doesn’t have a massive arrow above it. Great locations take a lengthy search to find, and there are unmistakable consequences for choosing the wrong one.
Regardless of whether corporate occupiers are upsizing, downsizing, switching locations, or rethinking their existing ones, commercial real estate will be an important subject in the coming months and years. With that in mind, here’s everything you need to know about developing a commercial leasing strategy that truly works.
Planning for Growth: It’s Time for a New Corporate Real Estate Strategy?
The most obvious sign that it’s time to seek out new corporate real estate is having more staffers than space to seat them.
During and after the COVID-19 pandemic, however, other concerns might necessitate a move. Your company might need a space that allows for social distancing or serves as a gathering space rather than a sea of cubicles. Leadership might see better opportunities to expand to new markets to attract customers or staff members located elsewhere. Or your firm might need a space that’s smaller or less expensive than what you currently have. All these reasons and more will result in a wave of relocations and portfolio rebalancing in 2021 and beyond.
Your company’s key players in real estate planning should ask themselves this question: What’s the primary goal of our leasing strategy, and does our current real estate portfolio serve that strategy?
Don’t expect an obvious answer. Instead, seek input from throughout your company to help the real estate team make the right choice. Ask the C-suite what image it wants to project through real estate and how much money there is to spend. Consult with HR about what the staff needs in terms of space and personal work preferences. Ask IT what technical requirements an office, warehouse, or store must have, especially as technological needs morph and grow. In short, gather input from all business unit leaders so no detail or requirement is overlooked when it comes to your corporate real estate space requirements.
The next question is this: What’s the minimum square footage we need for office space? The answer requires a close examination of what the on-site team looks like at this point. How many people come into the office regularly? Do they have dedicated desks, cubicles, or offices? Are people meeting in groups, and do those groups include clients?
Figuring out what’s necessary and what isn’t gets a company closer to the right number of square feet. However, as a general rule of thumb, plan for 150 square feet of space for every on-site employee. By this calculation, for instance, a company with 70 employees will need 10,500 square feet of office space. However, if half the employees work from home at any given time, a 5,000-square-foot office could provide plenty of space at a decidedly better cost.
The key to fine-tuning your corporate real estate strategy to the needs of a company operating in a fast-changing economy will be asking the right questions and then spending enough time exploring the answers. Here are some great prompts to start with:
- Where do employees commute from?
- Where are clients located?
- What are the current market rents and concessions?
- What type of building is necessary?
- What building amenities are necessary?
- How long does the lease need to be?
- Is building a space an option, or does the space need to exist already?
- What location draws will attract and retain talent (think restaurants, coffee shops, stores, and so on)?
- Similarly, is there close proximity to public transportation?
- Are there flexible space operators (such as WeWork) in the area that allow more freedom than a traditional lease?
- What ratio of remote-to-in-person working time do employees prefer, and what kind of location will be most convenient for that?
- What technology is required to support a mobile workforce, and what investment is necessary?
Once you’ve answered these questions, you reach the more difficult part: finding a space that checks all the boxes. That’s where a commercial real estate broker— specifically a tenant representative — comes in.
Making the Most of a Tenant Representation Broker
Brokers can be an asset to any company rethinking its corporate real estate strategy —even if there’s a dedicated real estate team in-house. That’s because commercial real estate brokers (also known as tenant representation brokers) have extensive market expertise, 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 better than anyone else, which makes it faster to find corporate real estate that supports the needs of your business.
And even though commercial real estate brokers make moving more successful, they also do the same for staying put. When it comes time to renew a lease, a broker can help a company secure more favorable terms — especially in a depressed corporate real estate market where landlords are eager to keep tenants around or are desperately trying to fill vacancies. Working with a broker might lower the price of staying so much that it’s financially viable to renovate the space or seek out supplemental locations rather than moving everyone out.
Whether you’re relying on a broker to stay or go, the savings you can arrange by negotiating or renegotiating lease terms almost always outweigh a broker’s commission fee. Be aware that broker’s fees for both the landlord and the tenant are often built into pro formas and listing agreements, too. If the tenant fails to utilize a broker, the fees allotted for that purpose go to the other broker or the landlord. Given this fact, the return on investment of working with a tenant representation broker is very compelling.
However, the most compelling reason of all to bring in outside help is because of the access brokers have to insider information. Brokers subscribe to expensive databases such as CoStar and LoopNet, and they often know about off-market opportunities that would be invisible to tenants trying to find commercial real estate on their own. While transparency into commercial real estate data has increased in recent years, we’re not yet at a point where availability data is public and accurate. So beware of the Google search for “office space” and the reliability of the results.
Valuable as brokers may be, they’re not all created equal. When searching for the top tenant rep brokers , ask these questions about your list of candidates:
- How do they communicate and collaborate with clients? Do they use technology, or are they relying on antiquated methods?
- What past deals have they completed that are relevant to this one?
- What additional resources do they bring to the table that are relevant to this one?
- Will they get along with your culture and team?
Enlisting a broker is a great decision, especially when you find just the right one. However, making the most of the relationship also requires a shared understanding that’s difficult to establish with just phone or email. Having a shared platform to work on gives the broker and you — the corporate occupier — a single source of truth.
When everyone has a complete set of facts and information at their disposal, it eliminates misunderstandings and duplicated work while streamlining the decision-making process on both ends. Why use a commercial real estate broker if the partnership can’t be maximized? After all, a shared platform makes a good process great.
Leasing 101: Common Commercial Leases
Having the right lease matters just as much as having the right space. Your company should decide for itself — hopefully in consultation with a broker — what kind of lease you need and what the most favorable terms look like. There are many different types of commercial lease agreements, but the most common options include:
- Short term (one to three years): The advantage of a short-term commercial lease is the flexibility to leave in a short period of time without paying a penalty. But this option might cost more and be harder to find as landlords generally prefer to have tenants commit for longer time periods. The good news is that there are plenty of flexible space operators out there that specialize in this type of lease.
- Standard term (three to five years): This lease is the standard because it’s often the best option for tenants and landlords. The length of time offers some flexibility at a competitive rate. And by committing for a bit longer, tenants make themselves eligible for concessions like buildout allowances or free rent — especially with a broker as an advocate.
- Long term (five or more years): A long-term commercial lease might allow you to achieve the best rental rate, but your flexibility is limited, and you’re typically paying for significant capital expenditures out of pocket. Typically, this option works best for companies with a clear vision of the future and the capital necessary to provide a long-term home for their employees.
Whether for office, retail, industrial, or mixed-use spaces, there are a few other types of commercial leases worth considering:
- Full-service lease: The tenant pays the landlord to handle all or most of the expenses related to a property (think taxes, maintenance, insurance, and so forth).
- Net lease: The tenant pays a lower rental rate to the landlord but also pays out of pocket for services such as trash removal, landscaping, parking lot repaving, or whatever conditions the lease terms stipulate.
- Modified gross lease: Somewhere between a full-service and a net lease, a modified gross lease involves the tenant paying the landlord for rent and select services charged and recalculated on an annual basis. Some fixed costs, such as electricity, are explicitly stated in the lease.
- Co-working lease: This is a kind of short-term commercial lease agreement with a high degree of flexibility. Companies can access highly customized spaces but at a premium price.
- Percent lease : The tenant pays a base rent plus a percentage of monthly sales. This type of commercial lease agreement favors the landlord and is commonly imposed on shopping mall tenants or businesses with high sales volume.
In any lease agreement, however, certain tenant rights should be nonnegotiable. These include the right to renew the lease, which gives a business the right to stay in a quality location for as long as the lease stipulates and avoid the disruption of a sudden move.
Alternately, tenants also need the right to terminate a lease and leave a space, ideally with the least expense and inefficiency possible. And when termination isn’t possible, tenants need the right to sublease commercial space to recoup some of their costs. They should also have the option to occupy more space within a building when possible and necessary with preference over outside tenants. Finally, the ability to restructure a lease agreement makes a commercial real estate strategy flexible in the face of the unexpected (such as, say, a pandemic).
Speaking of the pandemic, COVID-19 altered expectations around commercial real estate in ways that every tenant needs to be aware of. Before, flexibility wasn’t a strong feature within lease agreements. That’s changing now that companies are shifting to remote work, thinking differently about work-life balance, and trying to outpace the competition in fluid markets. Expect to see landlords offer more short-term, co-working, or gross modified lease options as tenants increasingly demand more flexibility. Post-pandemic, commercial real estate can’t limit your company’s agility. It must enable it by allowing your organization to scale, move, and adapt to spaces with ease.
Lease Accounting in a New Era of Commercial Real Estate
Recent changes to lease accounting standards add yet another wrinkle to today’s commercial real estate market. Before diving into the details, however, let’s review the two major types of commercial leases:
- Capital lease: Similar to owning a piece of property, a capital lease appears on a company’s balance sheet. Interest payments on debt financing go on the income statement, the present market value appears under the assets side, and the loan amount is included under liabilities.
- Operational lease: Similar to renting a property, lease payments are accounted for as operating expenses on the income statement. That’s the extent of the accounting requirements.
New lease accounting standards (right now, that’s FASB ASC 842 and IFRS 16) change how companies must account for lease payments. With the exception of short-term lease payments, all leases must now appear on the balance sheet as a lease liability and right-of-use asset. The distinction between capital lease versus operating lease no longer matters from an accounting standpoint, which eliminates some ambiguity but also makes lease accounting more complicated overall.
FASB ASC 842 also requires companies to separate leases embedded in contracts. For example, if a contract includes stipulations around leasing equipment for manufacturing, leasing servers for IT, or leasing billboards for advertising, those agreements must appear on the balance sheet as well. Accounting for commercial real estate leases now requires more input from staff and more time in general.
Making matters worse, companies must comply with another update that affects lease accounting. Known as IFRS 16, this lease accounting standard works similar to FASB ASC 842 in that it creates a single accounting model to recognize assets and liabilities from all leases. But there are also differences between the two standards. Without getting into the weeds of how they deviate, the fact is that companies must comply with two sweeping and separate rule changes that make lease accounting far more challenging than before.
As you revise your corporate real estate strategy moving forward, then, you should be aware of these changes and put the right policies in place to comply with them. Accounting violations can have expensive, lasting consequences, so it’s ideal to avoid them at all costs. A shared platform for real estate data can both help with long-term compliance, as can the best practices we’ll outline in the next section.
Best Practices for Lease Management
When so much depends on your company’s real estate portfolio, it requires careful management and oversight. We’ve mentioned the importance of partnering with commercial real estate brokers. But internally, there also need to be partnerships between your back and front offices as well as between your real estate team and other stakeholders throughout the organization. After all, everyone has a stake in where your company operates. Therefore, everyone should have some input.
Best practices around commercial real estate management all relate to keeping various stakeholders coordinated and in close communication. All the potential problems — from choosing the wrong space to violating lease accounting standards — result from a misalignment between different moving parts. Knowing that, the single best practice your company can follow is to integrate everyone and everything relevant to your real estate portfolio in one place.
A single source of truth can save you time because no one has to wait to get the information they need. It can also eliminate errors that arise from miscommunication or bad data. Most valuable of all, a communal data resource synthesizes the three pillars of a corporate real estate strategy: transaction management, lease administration, and lease accounting. Best practices really boil down to keeping everyone on the same page, and today’s lease management software makes that easier than ever.
A Tech-Driven Corporate Real Estate Strategy
Technology can make commercial real estate manageable — even as it becomes more complicated and a higher-stakes endeavor. There are a number of cloud-based “proptech” solutions on the market, for instance, that are of varying quality. In your hunt for helpful tools, look out for these features to dig up the best options:
- Simple: From beginning to end, commercial real estate deals consume massive amounts of time, enlist multiple stakeholders, and generate huge volumes of data. Lease management software should make everything easier by simplifying, expediting, or eliminating work that would otherwise have to be done manually. Look for solutions that promise clear, substantial ROI in terms of time saved, costs avoided, and so forth.
- Collaborative: In a future driven by remote work, any proptech platform worth its salt needs to integrate stakeholders across various locations. Hosting data on the cloud helps with accessibility, but the solution itself should facilitate collaboration by moving more data into the right places automatically instead of letting it get lost in spreadsheets or PDF files. Look for solutions that help your real estate team and everyone they rely on work in perfect sync.
- Secure: When commercial real estate software becomes a single source of truth for all relevant data, it also becomes a valuable target for hackers. And when there are multiple people, locations, networks, and devices involved, the risk of a successful attack is high. With this in mind, always look for solutions that can support a single sign-on and include multiple data protection capabilities.
Why Business Success Depends on Having the Right Approach to Commercial Real Estate
Because it’s now directly related to business success, your corporate real estate strategy has never been more important.
Of course, the two have always been linked. But never has your company’s fortune depended more on its footprint , lease obligations, and accounting standards. You need the right commercial real estate portfolio to help with this. Just as important, you need to manage that portfolio effectively in the face of positive, negative, and surprising circumstances.
A lease management platform improves all major parts of the process: broker relationships, site location, lease negotiations, lease accounting, and so much more. And as commercial real estate becomes more complex, consequential, and competitive all at the same time, it risks becoming a liability. Great software keeps that from happening and does just the opposite: It transforms commercial real estate into a strategic asset and a driver of business success.
Occupier leads the way in this new era of lease accounting and lease management. Schedule a demo to chat with our dedicated team and see what a better approach to corporate real estate management looks like.
Check out our Lease Accounting Resource Hub for additional guidance.
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The ABJ team can help you position your real estate portfolio for maximum efficiency through strategic planning and proactive decision making. Our team of real estate professionals will look beyond your current real estate needs and also look at your overall business objectives. By understanding each client’s needs and goals, the ABJ team can perform a comparative analysis to identify areas of cost reduction and optimization. Talk to us about your company’s goals and let us help you strategically plan your real estate approach.
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Strategic Planning – The Best Kept Secret in Commercial Real Estate Brokerage
- Post author By John Highman
- Post date November 11, 2013
The process of strategic planning is critical for any commercial real estate agent on a personal basis. It helps define where they will be focusing their efforts in listing and market activities. Things are always changing so you have some market indicators to watch in prices, rents, time on market, and property supply.
So, as an agent you also have a couple of choices here. You can be a ‘generic’ agent that sells, leases, and manages commercial real estate in your town or city; or you can be property type specific for the same location. The ‘specialised’ agent wins more listings than the ‘generic’ agent every time.
If you want to specialise it directly follows that you should focus your efforts on the type of property that you understand and enjoy. There should also be plenty of listings and market share up for grabs as part of your prospecting model; check that out first.
Let’s look at how you can get this planning process underway:
- Convenience – the property type and the location should be easily accessible. It is very hard to work a market and property location that is distant from your office location. Market evidence and listings should be locally based so you can be part of your market and not distant to it. When your market is all around you it is easy to see shifts and changes in rents, prices, and the demand and supply within that property type.
- Variety – look at the property type and your location. What variety exists within that to allow you to diversify services and income or commission? Can you get involved in selling, leasing, and managing properties within your chosen type? Check that you have the resources and people within your office to do that.
- Market share currently – given that you work for a particular agency or brokerage, the brand will be of great assistance when it comes to contacting new people. If you work for a brokerage that has a strong name, people are more inclined to talk to you when you are cold calling. The reverse is true when you work in an obscure and unknown new agency.
- Reputation – what reputation does your brokerage have now locally? Will that be a strength or weakness in your ongoing marketing? Logic says that any strength should be built on; they could be in sales, leasing, or property management. Many a successful brokerage has been built around property management portfolios and services.
- Value offered – the services you provide as a brokerage or as an individual agent should be ‘value for money’. Value comes in many different ways; that could for example be in dominant market share, real experience, a database of quality, marketing systems that are superior or proven listing performance for the property type.
These simple considerations will help you with the foundations of your strategic plan in commercial real estate brokerage. Work from the foundations that are solid and proven; from that point onwards it is easier to build your dominant market share. Clients and prospects will seek out your professional services.
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- Logos and Trademark Rules Only members of NAR can call themselves a REALTOR®. Learn how to properly use the logo and terms.
- Your Membership Account Review your membership preferences and Code of Ethics training status.
- Highlights & News Get the latest top line research, news, and popular reports.
- Housing Statistics National, regional, and metro-market level housing statistics where data is available.
- Research Reports Research on a wide range of topics of interest to real estate practitioners.
- Presentation Slides Access recent presentations from NAR economists and researchers.
- State & Metro Area Data Affordability, economic, and buyer & seller profile data for areas in which you live and work.
- Commercial Research Analysis of commercial market sectors and commercial-focused issues and trends.
- Federal Advocacy From its building located steps away from the U.S. Capitol, NAR advocates for you.
- REALTORS® Political Action Committee (RPAC) Promoting the election of pro-REALTOR® candidates across the United States.
- State & Local Advocacy Resources to foster and harness the grassroots strength of the REALTOR® Party.
- REALTOR® Party A powerful alliance working to protect and promote homeownership and property investment.
- Get Involved Now more than ever, it is critical for REALTORS® across America to come together and speak with one voice.
- All NAR & Affiliate Courses Continuing education and specialty knowledge can help boost your salary and client base.
- Code of Ethics Training Fulfill your COE training requirement with free courses for new and existing members.
- Continuing Education (CE) Meet the continuing education (CE) requirement in state(s) where you hold a license.
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- Library & Archives Offering research services and thousands of print and digital resources.
- Commitment to Excellence (C2EX) Empowers REALTORS® to evaluate, enhance and showcase their highest levels of professionalism.
- NAR Academy at Columbia College Academic opportunities for certificates, associates, bachelor’s, and master’s degrees.
- NAR Newsroom Official news releases from NAR.
- REALTOR® Magazine Advancing best practices, bringing insight to trends, and providing timely decision-making tools.
- Blogs Commentary from NAR experts on technology, staging, placemaking, and real estate trends.
- Newsletters Stay informed on the most important real estate business news and business specialty updates.
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- History Founded as the National Association of Real Estate Exchanges in 1908.
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NAR’s Strategic Framework Succession Planning Resources
Unleashing the Power of Real Estate Data (2016) View and download the latest AEC Strategic Issues Report, "Unleashing the Power of Real Estate Data," for assistance in your strategic planning initiatives. NAR commissioned this report to study the industry's evolution in order to help set strategic direction for agents, brokers, and associations alike.
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Simplify: Real Estate Trends in a Time of Uncertainty (2012)
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The nexus of long-term workplace strategy and short-term tactics.
Many business owners end up as landlords by accident - and their space probably doesn’t effectively support their operations. It all happens rather organically: you start a business, lease some space, realize your operations have scaled and your space doesn’t work anymore... so you buy a building.
Maybe you already own a building but are in the midst of a corporate relocation and don’t know where to begin. Or maybe you’re a business owner that currently leases but is wrestling with the question of leasing vs. buying commercial real estate. Whatever the circumstances, your decisions don’t simply impact workplace strategy - they have legal and accounting, tax, equity, and growth implications as well.
Unfortunately, business doesn’t provide us with a neatly drawn roadmap to help our decision making process. But strategic property planning assists in answering the questions that matter to your firm - from what type of real estate financing you should secure, to whether you should buy, to whether a sale-leaseback can help drive more business growth.
The CEO’s Guide to Strategic Real Estate Planning
Is strategic real estate planning, or a lack thereof, affecting your business.
The importance of effective Strategic Real Estate Planning in driving a company’s ability to maximize profitability and minimize risk is often woefully underestimated and overlooked by business leaders; often until it is too late.
A company’s real estate assets, liabilities and real estate decision making will, on varying scales, either enhance or compromise the overall success of the business. If managed effectively, the aforementioned factors can add tangible value at all levels. It is therefore important that those responsible for corporate real estate strategy and operations are experienced in doing so, and that they take full advantage of the benefits of professional advice from a qualified commercial real estate consultant.
“Organizations that continue to use 19th Century workplace designs and 20th Century workplace practices to do 21st Century work will not survive.” Global Workplace Analytics
Strategic real estate planning examines the business issues affecting a company’s real estate requirements and performance. This determines how real estate assets or liabilities can be best positioned to support its financial and operational objectives. And now so more than ever, the performance of its workforce. The ability to respond quickly and effectively to changes in operations, organizational structure, markets and business strategy is more important than ever in today’s competitive and disruptive business environment.
Hence, the quality of decision-making intelligence a company gains from strategic real estate planning will directly impact its ability to maximize value and adaptability and minimize risk. Corporate real estate risks should be identified, understood, and translated into business risks, to determine the business consequences of a decision. This can be done by analyzing which risks are consistent with expected business returns, and which risks should be avoided because the cons outweigh the pros.
Maximizing value creation is one of the most challenging issues facing senior management today. Strategic real estate planning can enable companies to effectively map corporate real estate decisions to business strategy. When conducted properly, the result is witnessed typically in improved financial, operational and workforce performance. It can also be useful for establishing specific criteria for transaction structure, capital requirements, financing, P&L and tax planning, and decision making and approvals.
An effective strategic real estate plan begins with a detailed review of the business’s financial and operational objectives and the key business issues facing the organization. The goal of this review is to consider the real estate from a business strategy perspective, and determine how it can be positioned to most effectively support strategic business objectives.
Below is a summary of some common issues companies need to consider when formulating an effective corporate real estate strategy:
- Corporate Strategy
- Workplace Strategy
- Short and long-term goals and objectives
- Operational Drivers
- Physical and geographical locations
- Demographic and economic audits
- Proximity to Workforce
- Qualitative and quantitative analysis
- Lease review
- Operating expense audits
- Forecasting revenues
- Space programming
- Economic and municipal incentives
- Early lease renewals and negotiations
- Acquisitions and dispositions
- Sale and leasebacks
- Staffing and space utilization
Through aligning corporate real estate strategy with financial, operating and strategic goals, companies can derive greater value from their real estate assets and obligations. The right balance of a sophisticated, broad reaching, and intelligent approach that enhances corporate performance can mean the difference between “cutting good real estate deals” and driving business success.
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