Corporate real estate (CRE) managers are used to looking years or decades into the future, but in today’s business environment controlling costs means keeping as close an eye on day to day expenses.
Controlling the upward creep in office real estate is a three-step process.
First, you need to benchmark select measures of cost and Key Performance Indicators (KPIs). Common metrics in this field include rent, utilities, building security and the amount of waste sent to landfills, all usually expressed in units per square foot or meter.
A good Business Intelligence system and real estate management software are vital for this step.
Next, you need to set meaningful short, medium and long-term goals aimed at the two ways to save: hard dollar savings like new revenue and reduced costs, and soft dollar savings like increased productivity and usable asset life.
The first place most office real estate managers can look for big savings is energy use. The federal government’s Energy Star program says office buildings waste up to one-third of the energy they use. Energy is the single largest operating expense in commercial office buildings, representing approximately one-third of typical operating budgets and accounting for almost 20 percent of the nation’s annual greenhouse gas emissions.
Energy Star has free web seminars aimed at CRE professionals on how to cut energy costs. For a broader tool kit of education on the subject, Energy Star offers other live and recorded seminars on other energy issues of interest to organizations.
Centralized wireless lighting controls can also reduce one of the largest components of office energy use.
Another target for controlling office real estate costs is insurance and legal liability. This can be done by more effective security, injury prevention programs, hazardous materials handling and other management initiatives.
Many cost control measures fall under the “sustainability” philosophy of making your organization a good corporate citizen, and these advances should not be discounted. Measures like reducing the amount of trash you sent to the municipal landfill reduce your hard dollar costs and tell your customers and public that you care about the community.
Learn more on how to cut Commercial Real Estate expenses:
