REoptimizer® Blog

Ways to Know You Have a Quality CRE Portfolio

Posted by Don Catalano on Apr 11, 2018

When your business is leasing multiple spaces or buildings in a single geographic area or in multiple locations, it's easy to get bogged down on the details of each property; however, it's necessary to take a step back and assess your overall commercial real estate portfolio from time to time. Otherwise, you may be paying more than you should for your office space or be settling for solutions that are less than perfect for your needs. For a quick portfolio checkup, consider whether the following statements are true about your current commercial real estate portfolio:

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Topics: Corporate Real Estate Portfolio

BOMA and Your Corporate Real Estate Portfolio

Posted by Don Catalano on Jun 12, 2014

How big is a rectangular space that measures 50 feet on one side and 80 on another? In elementary or middle school, you probably learned to multiply the two numbers together to get a total area of 4,000 square feet.

Corporate real estate isn't elementary school. And a 4,000 square foot space could be a 3,000 square foot suite in a building with an atrium, or it could be a 5,000 square foot space once you get done paying rent on common areas. It all depends on how you define "space," and those definitions are usually set by a standard maintained by the Building Owners and Managers Association.


Usable Space

The space that you think of as yours is called usable space. To calculate it, measure the inside dimensions of the walls demising your suite. With a 60 by 70 foot corporate real estate space, you'd have 4,200 square feet of usable space. Any area in your suite that isn't exclusively yours isn't part of your usable space. On the other hand, if you have a part of your suite that is yours but that you don't use (like an unbuilt-out and unused storage closet), it's still considered part of your usable space.

Here's the trick, though. In many buildings, you don't pay rent on usable space. Instead, the landlord charges you for your usable space and for your share of the rest of the building. This corporate real estate measurement is called your rentable space.


Rentable Space

To find the total rentable space, start by taking the area of a floor and subtracting out vertical penetrations like elevators shafts or stairwells. This gives you the floor's gross leasable area. Then, you assign space based on your percentage of the floor's usable area. A floor with a 19,500 square foot area and 500 square feet of penetrations would have a gross leasable area of 19,000 square feet. If it has a total usable area of 17,000 square feet, and your space measures 4,250 square feet, you have 25 percent of the 19,000 sf rentable floor. This equates to a 4,750 rentable square foot space. The 500 extra square feet -- 11.8 percent -- is called a load factor and it's your share of the common area spaces.

On first glance, this might not make sense. After all, why would you want to pay for space that you don't control? However, ask yourself how you would use a 12th floor space if you didn't have an elevator lobby to wait in on the ground floor, a lobby and hallway to  go from the 12th floor elevator to your office and a shared restroom for your employees to use. Without those common areas, you'd need to scale the building to get in and out of the office and your space would probably get a bit messy by the end of the day.


Corporate Real Estate Measurement Complexities

Under the BOMA 2010 standard, landlords can choose how they assign common areas in the building or even in a multi-building park. For instance, if your building has an atrium on its first few floors, those floors' common areas would be relatively large while their usable areas would be relatively small. The landlord can choose to calculate common area space on a floor-by-floor basis or on an entire-building basis. In addition, if your corporate real estate portfolio includes properties in sunshine states, read your lease carefully. You might be paying rent on covered outdoor corridors that are considered part of the building's rentable area.


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Topics: corporate real estate, commercial real estate, CRE, Corporate Real Estate Portfolio, BOMA

3 Ways to Ensure Your Corporate Real Estate Portfolio Benefits You in the Long Term

Posted by Don Catalano on Jun 09, 2014

While a corporate real estate portfolio is part of your company's asset base, for many companies it operates like an expense. However, outstanding companies are able to turn their CRE portfolio from an expensive necessity into a strategic asset and long-term contributor to profitability.

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Topics: CRE portfolio, corporate real estate, commercial real estate, CRE, Corporate Real Estate Portfolio, LEED

5 Ways to Use Benchmarking as a Tool to Boost Portfolio Performance

Posted by Don Catalano on Oct 03, 2013

The secret to boosting your corporate real estate portfolio performance is using the proper benchmark. Measuring the portfolio on the basis of the numbers it posts rather than the subjective performance it delivers is one way to do this. Here are five ways to apply a benchmark to your unique locations in order to improve performance. 

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Topics: Corporate Real Estate Portfolio