Real Estate Strategies Research Articles

German corporate property and the conflict between real estate investment and operating resources

A great number of German companies are suffering an acute financial crisis. Financial optimisation of the substantial property holdings owned by German companies offers an opportunity to reduce costs and to free up capital. However, the demands on property for operational purposes create difficulties when optimisation is carried out exclusively for financial objectives. In this paper it will be shown, by means of an empirical investigation of real estate directors and financial managers of the leading German undertakings, that companies are failing to take the decisive step towards optimisation. The reason for this lies in inadequate internal preparations, manifested in the lack of a linkage between real estate strategy and corporate strategy. Property rights‐oriented analyses of real estate assets create new scope to refinance existing holdings, without sacrificing the important requirements of the units occupying them. This paper discusses the essential steps to a solution and explains the potentials that can be enhanced by a structured financial optimisation of property holdings.

Challenges and opportunities in aligning real estate and the workplace with business strategy: A survey of leading CEOs

The following paper contains the results of a global benchmark survey conducted among more than 200 CEOs from some of the world’s ‘Most Admired’: leading Fortune 500 and Global 500 companies. The survey was designed to identify, from the perspective of the CEO, practices that are essential for effective execution of corporate strategy. In all, 34 practices were studied to determine which are most important to strategy execution. Relocation of a corporate headquarters, or other major facility, and redesign of the workplace were two of the practices considered in the research. By including relocation and redesign within the larger context of strategy execution ‐ one that considers a broad spectrum of operational, market and organisational dynamics ‐ the relationships between real estate, workplace and other essential practices could be uncovered. The results show that real estate and workplace design do synchronise with, and contribute to, the success of changes required in other areas that are critical to execution, making it important for companies to examine closely the impact of real estate and the workplace on company strategy. The results also confirm CEO awareness of the strategic value of real estate and workplace design, since all who reported relocating or redesigning the workplace did so in order to execute strategy. More significantly, however, the findings reveal that a high percentage of CEOs who reported carrying out a move or a redesign did not perceive that these changes effectively contributed to strategy execution. While the explanation for this finding is beyond the scope of this study, it does suggest one of two things: either real estate and workplace professionals need to master a better understanding of how to align real estate strategy with business strategy in order to add value; or they need to be able to measure better the value and communicate it to the CEO.

Corporate Governance, Risk and Real Estate: The Case of Jack-in-the-Box Inc.

There has been substantial activity and discussion in the public and private sectors about corporate accountability and disclosure. Many corporate transactions and disclosure statements are processed by lawyers, accountants, bankers and the SEC, and yet these documents and transactions remain deficient in many dimensions. Real estate finance, corporate finance, strategy and law are converging, and are increasingly required skills in corporate transactions. This paper highlights some of these issues, and relevant considerations for Leveraged Buyouts and corporate transactions by service companies that have substantial real estate holdings and intangible assets. Most data is as of April 2000.

Global Real Estate Risk Index

1. Jun Chen 1. Head of financial modeling at Property & Portfolio Research, in Boston (MA 02108). (jun{at}ppr.info) 2. Peter Hobbs 1. Director of business management and head of European research at Property & Portfolio Research, in Boston (MA 02108). (peter{at}ppr.info) Despite ongoing political, economic, and financial uncertainties, the long-term trend of financial market “globalization” continues. This trend has been driven by equity and bond investments, but cross-border real estate investment has increased in recent years. Recent disaffection with stock performance means real estate is at the forefront of many investors' thinking and, increasingly, they are considering real estate as a global asset class. This article seeks to help measure and explain the relative risks of global real estate markets by providing a simple, objective measure of real estate risk based on three components: country, structural real estate, and cyclical real estate risks. Together these measures capture the key dimensions of risk and provide important insights for global real estate strategies. An investor's tolerance for various types of risk varies according to investment strategy. The authors conclude by showing how different combinations of types of risk provide different insights according to the perspective of the investor, whether they are “opportunistic,” “core,” or “debt focused.”

Time, Place, Space, Technology and Corporate Real Estate Strategy

Few corporations take a strategic approach to managing real estate. This survey finds that corporate real estate managers and service providers in Australia, Hong Kong, the United Kingdom and the United States continue to fulfill a traditional transactional role within their organizations. Real estate is not cooperating with other parts of the organization to provide their companies with flexibility that could increase competitiveness. While the use of technology is growing, real estate managers remain uncertain about its role in their future. Corporate real estate managers believe that to be effective in the future they will need strategic planning skills and business knowledge.

Corporate Real Estate: A Profile of the Leading Companies in Ireland

Real estate as an asset in corporate strategy is relatively under-developed in a European context compared to the experience in the United States. In particular, there is an underestimation of real estate interests and effects on property costs and shareholder value. This article reports on work in progress regarding a survey of the top 100 companies operating within Ireland in terms of their characteristics and corporate real estate strategy. Inward investment from the U.S. to Ireland is highlighted. Initial findings show that real estate performs a largely traditional role within organizations but distinctive differences are apparent between indigenous and externally parented companies notably those from the U.S.

The implications of discrete variables on portfolio management strategies

The authors present a series of variables driving corporate real estate strategy and discuss their interaction, with examples. Capital structure, geographical diversity, product and service lines and corporate culture can combine to create strategy, and strategy can be directed to affect any of these.

One on One: An Interview with Debra Bell

Journal of Supply Chain ManagementVolume 37, Issue 1 p. 2-3 One on One: An Interview with Debra Bell Debra Bell, Debra Bell Debra Bell is the chief procurement officer for AT&T responsible for the corporation's purchases of goods and services internationally. She is also responsible for the company's accounts payable function. Ms. Bell has been with AT&T for 17 years and has held a variety of leadership positions throughout the company, including those in law, real estate, and corporate strategy. Prior to joining AT&T, Ms. Bell worked for United Way as a planning strategist and for the law firm of Porzio, Bromberg & Newman. She has served on the board of the New York/New Jersey Minority Purchasing Council and has participated in a variety of purchasing industry associations, including NAPM and CAPS Research.Search for more papers by this author Debra Bell, Debra Bell Debra Bell is the chief procurement officer for AT&T responsible for the corporation's purchases of goods and services internationally. She is also responsible for the company's accounts payable function. Ms. Bell has been with AT&T for 17 years and has held a variety of leadership positions throughout the company, including those in law, real estate, and corporate strategy. Prior to joining AT&T, Ms. Bell worked for United Way as a planning strategist and for the law firm of Porzio, Bromberg & Newman. She has served on the board of the New York/New Jersey Minority Purchasing Council and has participated in a variety of purchasing industry associations, including NAPM and CAPS Research.Search for more papers by this author First published: 05 April 2006 https://doi.org/10.1111/j.1745-493X.2001.tb00092.xCitations: 2 Interview by Michael Fredette: writer for Purchasing Today®. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat No abstract is available for this article.Citing Literature Volume37, Issue1March 2001Pages 2-3 RelatedInformation

E-tailing and Internet-related Real Estate Cost Savings: A Comparative Analysis of E-tailers and Retailers

This article is the winner of the Real Estate and the Internet manuscript prize (sponsored by PricewaterhouseCoopers) presented at the 2000 American Real Estate Society Annual Meeting.This article explores differences in the corporate real estate strategies of traditional retailers and those of electronic retailers, or e-tailers. The primary issue addressed is whether e-tailing companies realize benefits of their non-retail, online operations, specifically in the form of lower real estate-related expense ratios when compared to traditional brick-and-mortar retailers.The study reveals three trends. First, the majority of retailers studied continue to focus their corporate real estate strategies in the retail space world. However, some companies are incorporating their online operations into their real estate strategies and are beginning to see lower real estate-related costs as a result. Second, there are differences among e-tailers in their real estate strategies as well as some indication of differences in the real estate-related costs associated with the strategy chosen. Third, e-tailers are not realizing real estate-related cost savings over their retailing competitors.

Choosing a Company's Building Design: Models for Strategic Design Decisions

Improving the linkage between real estate strategy and building design can help competitive business strategy. Differentiating building design from product design is important. Problems in making design choices derive from received paradigmatic knowledge that misrepresents the design decision processes. Architectural selection problems are explained with reference to design decision processes and dilemmas of testing the design. Because comparison is the underlying method of evaluation, the design competition is discussed as a model to evaluate the design of a company's proposed high profile buildings in relation to corporate strategy. The Appendix describes the process and the recent and past history of competitions.

Corporate Property Strategy is Integral to Corporate Business Strategy

Corporate property in the past has been concerned to much with the facility and insufficiently concerned with the relationship of that facility to the larger real estate markets and to corporate business strategy. Researchers concerning corporate strategic management have too seldom been sensitive to—let alone aware of—the significance of the properties in which corporations operate as a means to connect those corporations to their markets for resources and customers. As a consequence, the corporate real estate function generally and the research concerning the corporate real estate function have tended to be marginalized and disconnected from the concerns and priorities of corporations senior management and board of directors.Through several information-concentrated exhibits, the powerful intersecting relationship of corporate real estate strategy, place and space contributions, and sources of competitive advantage are summarized, to demonstrate the positive implications of the strategic management of corporate real estate.

Accommodating change ‐ Emerging real estate strategies

The pervasive impact of information technology, and the shift to a new economic paradigm has resulted in new ways of working. Successful organisations today are looking for work environments that unlock creativity, support collaboration, and ensure that the ideas of staff and collaborators are absorbed back into the intellectual capital of the organisation. Organisations have changed dramatically, but the physical settings have been slow to respond. The challenge for the real estate market and facilities professionals is to respond to a business model that supports both individual and collaborative working; provides for flexibility of tenure; and affords adaptability of both space use and function. A new real estate offer is emerging that provides both space, services and amenities, to support the tenants business over the life of a customer’s needs. Leading edge developers are now more concerned with creating a diversity of users, by providing space for a symbiotic clusering of firms in specific market sectors with their supporting supplier services and customers. Tenants to respond to continuous change are increasingly looking to reduce the amount of core space they own, with the majority of their portfolio consisting of flexible space on short‐term leases to absorb the demands of individual projects, and outsourced space on a ‘just in time’ arrnagement for support functions. The paper concludes that the property industry today is changing from traders in real estate to an emerging role as value stream integrators and total service providers over the life of the tenant organisation.

Scenario building: a suitable method for strategic property planning?

The scenario method has been widely used by decision makers in business, industry and government for over 30 years as an unrivalled technique to learn about the future before it happens. This paper examines the principles, practice and pitfalls of scenario building with the prime aim of presenting the technique as one singularly relevant to the study of future property investment, development and management decisions and land use policy formulation. The origins of the approach from its military‐based beginnings, through the popularised global environmental applications to the current widescale use by industry and commerce are traced. Some definitions are advanced to demonstrate the multi‐various nature of the method, and different types of scenario identified to show their adaptability and agility. The general purpose of the technique as a learning mechanism for organizations is explored, and the step‐by‐step process of scenario building specifically analysed. Conclusions are drawn which record the success of scenario building in many fields other than property and predict the adoption of the scenario approach as the principal behavioural technique for determining corporate real estate strategy in the future.

Creating an effective organisational model

CRE value is created by efficiently aligning business and real estate strategies. The primary responsibility in today’s environment for corporate real estate executives is to understand the business that they are in, and to leverage that knowledge to make real estate strategies and decisions that support and enhance the profitability of the company. The first step in this process is gaining business knowledge through aligning real estate and business strategies and goals. This paper looks at one way of establishing an organisation that efficiently captures and utilises business information to develop value‐added real estate strategies.

The Components of a Real Estate Strategy

Here's how one bi‐coastal company expanded its operations to meet its considerable growth spurt.

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.

The Nortel Brampton Centre: The real estate vision and strategy

This case study describes how Nortel’s real estate function relocated its worldwide headquarters headquarters with the entire 3,000 staff to Brampton, a 30‐year‐old factory owned by the company.

Corporate real estate strategies: Managing the delivery of optimum solutions

This paper examines the creation and delivery of real estate strategies in the corporate environment against the not unusual backdrop of management unwillingness to focus on non‐operational subjects, the problem of business inertia and the protection of old demarcations. While there are often barriers to delivering a co‐ordinated, business‐wide accommodation plan, this paper looks at one route to success:the marketing of the strategy and its delivery to internal customers emphasising the corporate, business division and staff benefits. The tangible proof of the strategy through new and flexible buildings, new ways of working, performance measurement and benchmarking gives the real estate team a powerful array of marketing material. The key is to communicate endlessly about the progress and the benefits that are brought to the business through this targeted approach to space management and delivery. This is an interesting facet of corporate real estate management and one which is essential to a more rapid and less stressful delivery of a programme to provide the optimum portfolio of space and, as a result, competitive advantage to the business.

Strategic Drivers of Location Decisions for Information-Age Companies

The location decision-making process of forty companies with high quality “information-age” jobs is examined. A typology of location decisions is presented based on the magnitude of the relocation and the impact on the workforce. The strategic business drivers of the location decisions are identified and examined. Overall, economic development incentives are less important than the “ease of living” and labor market support found in the community. High quality infrastructure is critical. Future trends and their implications for corporate real estate strategy and economic development priorities are suggested.

Corporate real estate strategies for managing taxes to advantage

The authors set out strategies which corporate real estate departments can adopt to take full advantage of all available tax benefits in order to minimise their corporation’s tax exposure.