Mar 22, 2012

Key Metrics for Your Industrial Real Estate Benchmark

By Don Catalano



The practice of setting the real estate benchmark of operations for objective measures of cost and utility is an evolving and complex field of management.


With CRE management being more centralized and managers reporting into a dynamic business intelligence environment, C-suites are expecting more precise measurements of performance.


Taking a look back ten years, a study in the Pacific Rim Property Research Journal in 2002 said most firms sampled in an international survey favored some sort of measure per unit of space. The problem with this was that everybody had a different way of measuring building space. The United State, for instance, had at least three.


There have been drives to consolidate this since then, but new players have entered the field.


Where benchmarks used to be mainly financial, corporate leaders now want to be able to tell the public about the environmental sustainability of their operations.


This breeds a whole new set of Key Performance Indicators (KPIs). Metrics in this field include energy use, water use, the amount of waste sent to landfills, the amount of carbon emitted to the atmosphere and other air quality measures. Most of these KPIs need to be expressed in units per square foot or meter.


Traditional benchmarks for KPIs like cost per square foot or earnings per square foot are hard enough to set, but at least nobody expects them to be zero or infinity. The KPIs for measuring sustainability are expected to trend ever downward, and some companies like Google seriously talk about them being zero.


 A 2010 white paper by CoreNet Global reports that about one-third of the 140 companies they sampled were collecting environmental KPIs. Most of them (81 percent) benchmarked against other units of their own organization, while 60 percent benchmark against competitors as well. The CoreNet Global white paper concludes that setting a real estate benchmark “is a critical step toward achieving departmental objectives."


Other great Industrial / Warehouse articles:

5 Secrets of Industrial Site Selection

Seven Must Haves for Your Warehouse Space

High Tech Warehouse Innovations

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Don Catalano

Don Catalano