The economy is still struggling and every company is in cost-cutting mode. Companies do not pay close attention to an important cost item that can help free up cash – Corporate real estate. As a corporate tenant, it is your duty to manage your office space methodically and efficiently and cut down on real estate costs. Here’s what you must ensure:
1. Your planned space usage must reconcile with the actual usage.
Under-utilization wastes money and inefficient utilization dampens employee morale and kills productivity. For example, meeting rooms that are planned without taking into account the maximum attendance, meeting times, departmental usage, and other intra-organizational factors may not be utilized as envisaged.
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2. To stay competitive, you must benchmark your corporate real estate costs with the current market prices.
You must stay current with market intelligence so that you can choose the lowest-cost space that meets your requirements.
3. Space cost calculations must factor in even the lowest denominator.
How much does each seat cost? How many square feet should be allocated per employee? How should the site be utilized? What is the return generated by the sales department as a percentage of the space cost? The idea is to kill all waste. If you have not yet rented space, you must benchmark these metrics with other office space before making a decision.
4. Market dynamics keep changing all the time and therefore it is important that you must track your real estate expenses and stay ahead of projected office space costs.
So, if you are planning to become a corporate tenant or have already leased corporate real estate, it may be wise to invest in software that will help you optimally utilize office space and check if you have made the right decision. Such tools provide you with market intelligence and help you efficiently use space. You can also benchmark the actual tenancy performance with the lease metrics on a monthly, quarterly and annual basis.
Wasted or inefficiently utilized space can choke profits. It’s best to work with technology that can help you effectively utilize your office space and fulfill lease metrics.
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