With 2018 rapidly coming to a close, it's a great time to close up remaining details with your company's commercial real estate portfolio. Here are some tips that will let you make the fourth quarter an important part of preparing to make 2019 your portfolio's beset year ever.
1. Get Your Data in Order
To finis the year right and start next year off on a good foot, the first thing to do is to make sure that all of your data about your company's commercial real estate portfolio is in a place where all of it is readily available and where you can easily analyze it. Whether your company uses a full blown business intelligence package, a workplace management system or chooses to operate with affordable, flexible and powerful real estate optimization software, make sure that you're using the right package for your company and that all of your data is loaded and accurate. This will make every other task easier.
2. Figure out Your Space
Whether or not you regularly reassess your utilization metrics, the fourth quarter is a particularly wise time to do it. By understanding which spaces you're using, which spaces you're under using and which spaces are bursting at the proverbial seams, you can plan where you need to go and what you need to do in the coming year. For spaces that are underutilized, the end of the year might be a good time to have buyout talks with your landlord. If that does not fit your plan, this can also be a great time to interview commercial real estate brokers to help you sublease out those spaces.
3. Add Energy Efficiency... and Tax Credits
While the last couple of years have seen a great deal of change in the tax code, one important benefit has remained in place. You may still be able to get tax credits for installing environmentally friendly energy generation systems like solar panels and wind turbines. These credits are time limited, so squeezing work in during 2018 could maximize your benefits. Before starting work, though, talk to your CPA (or CFO) to fully understand how the tax code affects your business.
4. Rework Your Numbers
Finally, the end of the year usually means that both you and your landlord will be closing your respective sets of books. Although you've already looked at how you're using your space, it's also a good idea to analyze how your space is performing from you from the perspective of production relative to cost. Looking both at cost benchmarks across your commercial real estate portfolio as well as looking at performance metrics like sales or employees per square foot can help you identify which sites are working well and which need special attention.
At the same time, be ready to work with your landlord on both end-of-year and start of year projects. The most common ones are CAM reconciliations and, depending on the accuracy of your landlords' budgets, you could need cash early in 2019 to cover deficiencies.
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