After employee compensation, corporate real estate and building expenses usually account for a businesses next largest budgetary expense. However, many firms overlook these costs and do not consider them as key aspects of their strategic corporate decision making process. The lack of attention to this can prevent companies from realizing better operations efficiency and the full potential of substantial cost savings on their overall budgets.
Every organization needs a complete understanding of the full cost and extent of all of their leased corporate real estate, amenities and services. It is only through that comprehension that companies may build this knowledge into a viable and complete budgetary strategy and plan.
The first step in assessing the corporate real estate portfolio is determining all costs associated with leasing real estate properties, such as rent, management, operations and workplace usage. For example, every expense associated with leasing the premises should be considered, such as utility costs.
2. Design a comprehensive corporate real estate strategy
Examine all of your company’s real estate leases. Search for ways to reduce costs on everything from utility expenses to more efficient allocation of space.
3. Combine real estate interests.
Take the time to streamline and standardize the use of all real estate. Consider closing offices that are not producing adequate results and combining operations. Use technology processes across the corporation to create more efficient operations. If all operations are necessary, than consolidation may not be the answer. More often than people realize, companies try to do too much with too little space. Perhaps dividing your space to allow for more for efficient movement may improve productivity in the long run.
4. Plan the real estate portfolio.
Schedule and actively review regular evaluations that make it possible to accurately assess how your corporate real estate portfolio compares to business goals and objectives.
5. Initiate Continual Real Estate Assessment.
Always consider real estate leases as a major aspect when budgets, strategies, branding, integration and other financial planning is being discussed. This will allow a corporate strategy to develop that can contribute to effective cost savings initiatives immediately, rather than waiting for circumstances to necessitate reviews.
Much of the time, corporations may view real estate tenancies as somewhat of an unavoidable loss leader in difficult economic times. However, through regular careful assessment and alignment of your commercial real estate portfolio, losses may be easily avoided.
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