Corporate Real Estate Portfolio Research Articles

Enterprise program management: A Sprint case study

In the midst of a major corporate reorganization and an ever‐changing industry landscape, how does a corporate real estateorganization successfully build enterprise alliances and create integrated approaches to problem solving in order to 1) realign the real estate portfolio and 2) achieve optimal real estate portfolio efficiencies? The answer lies in the use of enterprise program management approaches to identify stakeholders and to invest in lifecycle management. This case study will examine how Sprint Enterprise Property Services successfully adopted the use of enterprise program management principles in order to achieve significant gains in process improvements, to transform a traditional work environment, and to institute a dynamic long‐term vacancy reduction plan for the corporate real estate portfolio.

Cracking the landlord and capital markets code

This paper looks at three routes to maximising the value of a corporate real estate (CRE) portfolio in the UK, although they apply also in other countries: ‐ Know what space you have and ensure its efficient use. Benchmarking is a useful discipline by which to monitor progress. ‐ Know your landlord. Up‐to‐date corporate intelligence is essential. Make the landlord your servant, not vice versa. ‐ Research capital markets and use them to your advantage. The paper also identifies major shortcomings in the way that corporates (at least in the UK) approach the management of their real estate.

Four cases of corporate real estate portfolio outsourcings

The results indicate that the main reason for portfolio outsourcing was the immediate cash pay‐out. In addition, corporations generally aimed to increase their capital and space‐use efficiency, as well as flexibility in occupation. Corporations were generally successful in increasing their space‐use and capital‐use efficiency. However, a common problem for all corporations was the difficulty of predicting future needs for flexibility. This is why all the corporations under investigation now have leases of unsuitable lengths. Another general problem worth mentioning was the lack of control over property refurbishment and alteration issues, resulting from portfolio outsourcing.

A quality process approach to corporate real estate management

How, with minimal staff and limited resources, do you manage a corporate real estate portfolio consisting of thousands of sites around the world? How can you meet the needs of an enterprise’s disparate operating units, each with its own requirements, while reducing costs and bringing maximum value to the parent corporation? How can you convince autonomous business units that centralised real estate management is in their best interest? This paper provides the answers, based on the experience of UT Realty, the real estate management arm of United Technologies Corporation. You will learn how to augment limited in‐house resources by engaging multiple real estate service providers and get them to work together on your behalf. You will learn how to overcome internal politics and ensure cooperation and compliance throughout your entire organisation. You will discover the importance of a quality‐based real estate management process and what the key elements of such a process are. By applying the principles and concepts described in this paper, you should be able to deliver high quality, value‐added real estate management services to your enterprise, saving your business money and satisfying your internal customers with every transaction you conduct on their behalf.

Aligning corporate real estate with evolving corporate missions: Process‐based management models

In their recent client engagement experience and benchmarking research, the authors have found that successful management models for corporate real estate (CRE) organisations begin with integrated, robust processes, and not well designed organisational charts. As corporate missions can quickly change focus from high growth to cost reduction, the key to successful integration of all CRE elements is engaging in a strategic planning process that not only aligns the facilities infrastructure with the core business, but also drives CRE organisational initiatives relative to processes, people and enabling systems. This paper attempts to capture a practical framework for CRE managers to evaluate changes to the core business and determine what implications these changes will have on both the CRE portfolio and organisation.

Key performance indicators: Primary drivers of information systems design

As the demand for enterprise‐wide performance measurement of corporate real estate portfolios and service providers ever increases, the number of tools available to executives which claim to facilitate this has also grown. Starting by developing an understanding of key business drivers, this paper reviews the latest developments in performance metrics including key performance indicators, service level agreements, and how the emergence of web‐based data collection, access and presentation is transforming the role of information systems in supporting decision‐making processes.

Friction and Inertia: Business Change, Corporate Real Estate Portfolios and the U.K. Office Market

It has been asserted that business reorganization and new working practices are transforming the nature of demand for business space. Downsizing, delayering, business process re-engineering and associated initiatives alter the amount, type and location of space required by firms. The literature has neglected the impact of real estate market structures on the ability of organizations to implement these new organizational forms or contemporary working practices successfully. Drawing from research in the United Kingdom, the article demonstrates that, while new working practices are widespread, their impact on the corporate real estate portfolio is less dramatic than often supposed. In part, this is attributed to inflexibility in market structures, which constrains the supply of appropriate space.

In search of flexibility in corporate real estate portfolios

Real estate is an inherently inflexible asset, yet corporate real estate managers increasingly need to find ways in which flexibility can be achieved. Shorter planning horizons, increasing corporate experimentation and growth through mergers and acquisition are but a few of the influences which have led to the need for more flexible resources. One way in which corporate real estate managers can gain a greater insight into the problem is by recognising that real estate is often considered from a variety of perspectives: as a physical, functional and financial asset. Each of these perspectives leads to a different source of flexibility. As a physical asset, corporate real estate managers are concerned with aspects of design, including floorplate sizes, column placement and building services. As a functional asset, corporate real estate managers consider what activities can actually be undertaken inside a building. As a financial asset, corporate real estate managers examine the terms of contracts and the ability (and cost) to terminate those obligations. Each of these types of flexibility is required, but at different times and for different purposes within the life cycle of an organisation. Possibly the most appropriate way to look at the issue is on a portfolio‐wide basis, considering what are an organisation’s core and periphery real estate requirements. This approach requires a different type of examination of the assets but can provide a corporate real estate manager with a firm base for working towards the elusive goal of flexible real estate.

Strategies for demand forecasting in corporate real estate portfolio management

Planning for future real estate and facility needs in a highly uncertain competitive environment can benefit from a four‐stage process of demand forecasting. Based upon research conducted within the Corporate Real Estate Portfolio Alliance and a review of general business forecasting techniques, each successive stage relies on more abstract data and increased dialogue about business strategy with the lines of business as uncertainty about the future increases. Each stage requires increasing flexibility in the supply of real estate as the range of probabilities around the forecast widens.

The Alliance Program: Establishing a new knowledge base on the corporate real estate portfolio management competency

The Corporate Real Estate Portfolio Alliance performed extensive research into corporate real estate portfolio management and developed a number of new practices and analytical methods. A number of papers in this issue of the Journal of Corporate Real Estate resulted from the research. This paper provides an overview of the corporate real estate organisations and researchers involved, the research methodology and its findings.

Eight steps to a strategic plan for corporate real estate and possible portfolio exit strategies

Corporations face new imperatives to reduce occupancy costs for both investment and corporate properties and to eliminate redundancies in their holdings. After mergers or acquisitions pressure to ‘rationalise’ the corporate portfolio are even more intense. This paper will explore an Eight Step Strategic Plan to evaluate alternative structures for corporate assets which are no longer contributing to return on equity or which may be considered surplus. It will also recommend a Special Purpose Vehicle to move assets off the corporate balance sheet.