The decision to move to a different site or to add a new location brings a number of questions:
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How much space is really necessary?
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What is the proper mix of office and warehouse space?
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What will the likely real world operating costs be?
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Will opting for more expensive space pay off?
While many companies base their real estate strategy on little more than educated guesses, real estate analysis tools can help to make a more grounded business decision. These tools allow companies to better understand what their needs are so that they can create more astute real estate strategies.
Space Planning
While many companies have general rules of thumb that they follow for how much space they need and what type of space to occupy, the reality on the ground is frequently different. By populating real estate analysis software with basic information on an existing portfolio, companies can quickly find out exact data on such metrics as:
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Space required per employee
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Rent & other expenses per square foot
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Proportional needs for office and warehouse space
With detailed real estate analysis, companies can better understand what their actual needs are. This helps them to focus their competitive bid and new location type projects on the most suitable locations.
Leasing Market Analysis
A thorough real estate analysis also includes a detailed look at the leasing market. Given all of the different deal structures that landlords offer, it can be hard to compare apples-to-apples when looking at alternative sites. Corporate real estate portfolio analysis software can typically compile data on a number of different potential sites into an easy to understand total occupancy cost number. This makes it easy to see what each alternative will actually cost after adjusting for different rents, CAMs, escalations and landlord concessions.
This is why it is not only important to benchmark to market your sites and your alternative options to your existing locations. Going deeper, when in a competetive bid atmosphere you want to consider everything - landlord concessions, economic development incentives, and everything in between. In many instances, it is better to think of real estate analysis as not just another step in the process; it is the process.
Cost Projections
While most landlords can project occupancy costs, most companies experience a different bottom line. Some have higher energy costs because their workers need more lighting to do their work. Others absorb have higher than expected parking costs because they have more employees on site at a given time than other companies while others have higher cleaning costs because they generate more traffic than a normal tenant.
Doing a comprehensive real estate analysis helps corporate real estate decision makers understand what their unique factors will be so that they can apply those factors to their alternative site analysis. This can help them to take factors like regional energy or labor costs into account so that they can most effectively manage occupancy expenses.
Real estate analysis turns alternative site planning from a series of educated guesses into a business process grounded in facts and in hard data. Completing an analysis of both a company's existing site and of potential alternative sites is an informative process that not only saves money in the long run but also ensures that companies choose sites that are best matched to their unique needs.
