REoptimizer® Blog

Michael Sweeney

Recent Posts

How Commercial Real Estate Software Can Improve Property Management

Posted by Michael Sweeney on Feb 20, 2014 11:16:00 AM

Continue Reading

Topics: Commercial Real Estate Software

5 Technology Trends that Will Impact Corporate Real Estate

Posted by Michael Sweeney on Jan 31, 2014 1:25:00 PM

Once upon a time, offices had large reception desks to accommodate switchboards and every private office had a group of dedicated secretaries that supported each executive. Things have certainly changed. In the modern world of corporate real estate, new technology changes the way that buildings are leased, how they operate and how they get occupied. Here are some technologies that are growing quickly and how they will change everything:

Continue Reading

Topics: corporate real estate

5 Awesome Apps You Might Not Have Heard Of

Posted by Michael Sweeney on Jan 30, 2014 11:33:00 AM

Continue Reading

Topics: commercial real estate

The Best Markets for Data Center Real Estate

Posted by Michael Sweeney on Jan 28, 2014 12:43:00 PM

As corporations turn to technologies that require immense power for computers and security, the market for data centers has grown. In fact, total leasing volume for this type of property rose about 25% between 2012-2013.

 

Are you looking to acquire commercial real estate for a new data center? If so, here are the best markets to look at in your site selection process:

 

New Jersey

New Jersey has established itself as a major data center market serving companies that need proximity to New York. However, it also offers a unique blend of features that make it desirable to IT management teams beyond the tri-state area.

 

Reliable Power: New Jersey features a robust power infrastructure that can meet the needs of data centers that typically purchase power in megawatts at kilovolt levels. With three different power providers serving Northern New Jersey, it also enjoys a relatively low cost per kilowatt-hour.

 

Fast Connections: Thanks to its highly dense population, New Jersey benefits from a dense and diverse network of fiber optic connections, allowing data centers to get speedy and redundant connections.

 

Inexpensive: New Jersey commercial real estate is less expensive to purchase or lease than properties in nearby New York City.

 

Favorable Weather: New Jersey is seismically inactive and has relatively temperate weather.

 

Strong Workforce: The market draws from a large pool of talent, refreshed by multiple universities.

 

For tips on managing occupancy costs in Data Centers, click here.

 

Sioux Falls, South Dakota

Like much of the Midwest United States, Sioux Falls is establishing itself as a major destination for data centers. While the Midwest might not seem like a hotbed for technology, cities like Sioux Falls offer a unique combination of features that make it a compelling choice:

 


Extremely Affordable Power
: Many Midwestern states offer some of the lowest power prices in the country. According to the Energy Information Administration, industrial power in South Dakota cost 6.97 cents per kilowatt-hour in October 2013. Here is how other states compare:
  • Iowa: 5.69 cents
  • Nebraska: 6.6 cents
  • New Jersey: 10.31 cents
  • Massachusetts: 12.4 cents
  • California: 11.86 cents

 

Cheap Land Costs: If inexpensive land for commercial real estate isn’t attractive enough, it also serves a secondary benefit. Companies can purchase larger parcels of land, giving them physical buffers around their data centers for enhanced security.

 

Stable Weather:  While South Dakota's cold winters are legendary, beneath the snow and ice is a relatively predictable ecosystem. Utility and transportation networks are hardened for the weather and most Midwestern cities don't have major risks like hurricanes, earthquakes or security concerns.

 

High-Tech Workforce:  Sioux Falls or Council Bluffs, Iowa might not be anywhere near Carnegie-Mellon, MIT or Stanford, but Midwestern universities produce highly skilled data center workers. Sioux Falls' Dakota State University holds the NSA's National Center of Academic Excellence Designation, as does the University of North Texas in Denton. Furthermore, the low cost of living make Midwestern cities attractive options.

 

Very Cold Places

Some companies are turning to foreign data centers located in commercial real estate in places like Sweden and Iceland. While the cold in these markets might make them seem undesirable, it actually makes them an excellent place for a data center:

 

Low Cooling Costs: Centers in cold places can use outside air for cooling, reducing power consumption. When located far enough north, they can use outside air all year-round, potentially eliminating the need for refrigeration.

  

Inexpensive, Sustainable Power: Iceland and Sweden both heavily use hydroelectric power for generation. Hydropower is both inexpensive to generate and emission-free.


Global Collectivity:  While foreign data centers may have higher latency to the US, they can be better suited for global customers.

 

Get the latest news & advice on your favorite commercial real estate markets. Subscribe to our blog by clicking here:

Subscribe Now
Continue Reading

Topics: commercial real estate

How to Conduct a Gap Analysis for Corporate Real Estate Strategy

Posted by Michael Sweeney on Jan 23, 2014 9:44:00 AM

Doing a gap analysis that aims to improve your corporate real estate strategy is an excellent way to ensure that expenditures are not wasted. A gap analysis is a three-part strategy. First, measure each space’s impact on profitability. Second, measure how each space is utilized. Finally, focus on cost metrics that help identify where savings can be made.

Continue Reading

Topics: corporate real estate strategy

Property Management Strategies that Save You Thousands

Posted by Michael Sweeney on Jan 21, 2014 11:38:00 AM

Property management is essential to corporate real estate optimization. Measuring your building’s operational efficiency is imperative when your goal is to minimize costs. This post will highlight some of the key metrics you should use to measure your building’s operational efficiency and how you can use this knowledge to take action and save your company thousands.

 

Energy Consumption

When looking at the amount of resources your business consumes for heating, electricity and water, there's one simple rule: less is better. Sometimes, you can work with your existing space to better utilize your existing resources. Other times, you will need to make some minor changes. Swapping out incandescent light bulbs with compact fluorescent or LED bulbs or adding window treatments are great low cost strategies that reduce energy usage. Major improvements to corporate real estate optimization might require significant capital expenditures, such as the installation of new HVAC systems or photovoltaic solar panels.

 

Want to learn more about building improvements that can reduce energy consumption? Read this article.

 

Electricity and Temperatures

There are two property management metrics that can immediately impact your bottom line. Adjusting your policies to control them can help attain corporate real estate optimization:

  • Thermostat Temperatures: While the value of allowing your building's temperature to fluctuate during off times can be debated, one factor is certain. Heat to a cool room temperature in winter and cool to a warm room temperature in summer. This ingenious tactic not only cuts costs but also mimics the outdoor temperature, potentially improving employee health and productivity.

  • Shutdown Times: Drive through any downtown, and you'll see whole offices lit up late at night. Sometimes, it might be because they have dedicated employees, but frequently it's because the lights are left running – burning energy and money. Setting a timer or motion switch to turn lights off at night can save real money. Shutting down computers at night makes a difference, also.

Maintenance vs. Repairs

Look carefully at what you spend on maintenance contracts and compare it to what you spend on repair calls. You’ll probably find that, while it's possible to waste money on unnecessary maintenance, there is also a tipping point where every dollar of maintenance savings generates more than one dollar of repair expense. Spending a little now to maintain your space can generate long-term savings.

 

Maintenance Staff Cost

You know the cost of your maintenance staff. However, calculating their cost relative to using third-party maintenance might lead to a different conclusion. Divide what you spend on your staff by the number of productive hours that they spend. For instance, if you pay a maintenance person $55,000 per year, all in, and he only does 20 hours worth of projects per week, you're paying him roughly $55 per hour. If you can find third-party staff at $40 per hour, you could save money by subcontracting the work out to them.

 

Average Vendor Service Time

If the average vendor has been serving a location for 20 years, there's a good chance that you're paying too much. Staying with the same vendor, year in and year out, might be convenient and might offer consistency, but it also gives that vendor the opportunity to bump the price up a little bit each year until you're paying too much. While you don't want to be churning vendors every few months, rebidding every time a contract comes up can help find better pricing or keep your existing vendors honest.

 

Want more great tips for reducing corporate real estate costs?

Download our FREE 10 Step Guide to Cutting CRE Expenses



Subscribe for more great CRE articles

Subscribe Now

Continue Reading

Topics: corporate real estate optimization

4 Scenarios in Which You Must Conduct an Audit

Posted by Michael Sweeney on Jan 14, 2014 10:30:00 AM

A fundamental aspect of corporate real estate optimization is to minimize spending. Lease math can be very complicated and whenever anything changes, there's always a risk that your landlord will make a mistake. When these mistakes occur, it's usually going to be in their favor instead of yours. With this in mind, here are four scenarios in which you must absolutely conduct an audit: 

Continue Reading

Topics: commercial lease audit