5 Steps to Mature the CRE Function
Let’s just say Corporate Real Estate ain’t what it used to be. Gone are the days of signing a quick lease (or rather, buying a building) with plans to just stay there forever or until you outgrow it. The intricacies of CRE seem to be growing by the day, and if you’re reading this, I assume you might work in or around Corporate/Commercial Real Estate and are sometimes underestimated by an older family member. When people ask you what you do for work, you might just simply say “Oh, I work in real estate,” to which they respond, “Can you tell me how much my house is worth?” *sigh*
If you are in the industry, I don’t have to tell you the impact Corporate Real Estate has on your company – in any sector. It’s typically one of your largest expenses. Let’s say you’ve got a team of about 45 people in an ~8,000 square foot office in Downtown Dallas. With today’s rates, a backhand (baseline) calculation will have you spending at least $440,000/year on facilities – and that’s not even factoring in all the furniture and “fluff” you’ll need. Imagine having 30 offices like that across the country! With the stakes that high, you better have a sophisticated way of managing the countless decisions you face within the CRE department – and more importantly – how to improve them. Want to impress your shareholders? We’ve got some tips for you.
It’s time to try and get your ducks in a row. The ducks might be aimlessly swimming around a master spreadsheet, (and that’s okay – for now!) but you need to set a vision for how you’re going to wrangle them up. Collaborate with senior leadership (especially your CFO) to first determine your pain points/places for improvement, and then develop a timeline to commit to the plan.
2. Understand Business Goals
What’s the firm’s long-term strategy? I’ll go out on a limb and guess the overarching theme is to reduce expenses and increase revenue. Surprisingly, the pandemic has presented plenty of opportunities to do so (especially if you can decrease your office space footprint by implementing a FLEX workplace). Are shareholders pushing for ESG initiatives? Corporate real estate is a good place to start as the real estate industry makes up 49% of global carbon emissions. It’s no easy task, but implementing the right corporate real estate technology will take most of the “lift” off of you, no matter your objectives. How will you know if your objectives are competitive enough? They say comparison is the thief of joy, but when it comes to business, benchmarking is invaluable to make better strategic decisions. Those are just a few of the decisions leadership may be facing, and thankfully RefineRE can help streamline all of them.
3. Identify Improvement Areas
Once you have the long-term framework pinned down, it’s time to get into the weeds. What are the current capabilities and technology that can be improved? What is a manual and time-consuming process that shouldn’t be? There’s basically an app for everything now – all it takes is a little digging. As you identify the strengths and weaknesses of your team, don’t forget to consider the impact of CRE on the firm’s long-term strategy and goals, not just hitting metrics.
4. Determine How to Achieve Your Objectives
While figuring out the “what” and the “why” of your goals is crucial, the “how” is probably the most important part. Translating the strategies and initiatives into step-by-step processes is no small task, but with clear communication and CREtech utilization, you’ll be able to translate goals into functional objectives. Start communicating the plan with your entire team to ensure you’ve got the right people wearing the right hats. Encourage feedback from the folks on the “ground floor” – they may or may not be experiencing the same pain points that leadership believes to be the issue. It’s an iterative process and a team effort, so take the plunge and start maturing the functions of your corporate real estate department.
5. Implement CRE Tech
By now you’ve figured out your goals, identified areas of improvement, and (at least loosely) determined an execution plan. Most (if not all) of the initiatives you’ll be working on will require a new or improved technology solution to streamline the process. That’s what we’re here for. Is ESG top of mind for shareholders? Explore RefineRE’s ESG Module to optimize your sustainability and determine what you need to do to become carbon neutral. Maybe you’re planning to downsize your portfolio and utilize FLEX workplaces – our FLEX Module will identify corporate real estate leases that are prime candidates for a flexible working strategy. We talked about getting your ducks in a row, and Data Foundations will do just that (with a painless effort from you!) Data Foundations is the core of RefineRE’s platform and joins your data from multiple disparate business systems into a single location, ensuring critical transparency across your entire organization and corporate portfolio.
The times, they are a changin’ – and your corporate real estate portfolio is no exception. We’re here to help you (over)achieve your goals, so let’s fast-track your success by getting in touch with us here.