29.03.2021

Category: Corporate real estate management pdf

Corporate real estate management pdf

Powered by. In many organisations, Corporate Real Estate Management CREM has been purely transactions-based for too many years, primarily focusing on decreasing short-term unit costs. In reality, Corporate Real Estate Management is much more than that. Here are the 6 Corporate Real Estate Strategies that can add value to your business - if you just let them.

Traditionally, the focus within Corporate Real Estate Management has been cost minimisation and short-term results rather than a long-term business strategy. However, intensifying outward pressures and changing business environments are forcing companies to pay more attention to non-core operations. Although, the return from a supporting activity might be lower than the return from the core business, there is no doubt that these supporting activities may provide other forms of value.

This first strategy involves viewing properties as capital assets that can be managed and optimised to grow — adding a significant financial contribution to the overall organisation. The objective here revolves around either: maximising the value of a current property portfolio, selecting desirable locations or even redeveloping obsolete properties.

Secondly, Corporate Real Estate can add value by selecting locations that attract customers, employees, investors and other stakeholders to the organization for either recruitment or business activities.

Even though the emphasis on increasing innovation may be a less familiar real estate strategy, facilities that encourage and support innovative thinking are key. Here it is crucial that the space inhibitors take part in planning spaces and providing insights into which type, size and workspace design creates an inspiring working atmosphere. In turn, this will lead to increased financial returns. The level to which employee satisfaction can be increased depends on decisions related to site selection, workplace design, facility amenities and environmental standards.

Undoubtedly, organisations that make workplace decision based on increasing employee satisfaction can expect to increase financial returns through greater production, efficiency, innovation, lower rates of absenteeism and much more.

More and more organisations are reforming their work teams, allowing for more flexible working hours, which creates a new set of requirements for the flexibility or adaptability of an office environment. On the other hand, if market conditions change, then there is a need for some companies to be ready to exit or vacate a market quickly. In both cases, the shifting demands from a space can obligate an organisation to pay for a space that is not optimal for its operations.

corporate real estate management pdf

Reducing costs is probably the most familiar Corporate Real Estate strategy of all. Naturally, cost reduction in any area has the most direct and immediate impact on the financial performance of any organisation. The most well-known real estate operating decisions in this context relate to the returns associated with outsourcing real estate services. Other methods that businesses can consider include: co-locating business units, occupying green buildings and choosing location based on governmental incentives.

Costs can always also be reduced by negotiating lower rates for real estate related services and utilities or increasing quality and timing of facilities maintenance to avoid costly repairs and capital expenditures.In real estate property managementthe property manager or management company has four major areas of responsibility:. The property manager is the owner's partner in maximizing the return on investment of the property through the efficient performance of these four functional areas of responsibility.

The property management company acts in the best interests of the owner to maintain the property, keep it occupied with tenantscollect rents, budget improvements and maintain records. Many real estate professionals have looked at property management and changed their minds when the scope of the management tasks and record-keeping are fully understood.

9+ Real Estate Strategic Plan Examples – PDF

It's definitely a niche for the more detailed and responsive in the profession. Real estate property management involves an understanding of operating expenses and budgeting. From this information, appropriate rental rates are set, balanced by the current market and what it will support in the way of rents.

A firm knowledge of the area and competitive rental properties is required. The property manager may recommend marketing programs, special promotions and other advertising strategies to the owner in order to maximize occupancy and rental rates. Regular financial reporting to the owners is required.

Understanding financial statementsprofit, and loss, income taxes and budgeting are all very important for the property manager. Understanding the needs of the tenants is important for this function. Getting them to move in is only the beginning. The property manager must then respond to their requests, monitor their activities as regards the lease requirements, collect rent in a timely manner, and continually assess the tenants' satisfaction as regards the property's amenities versus those of competing for rental properties in the area.

The unwelcome task of eviction for violations or non-payment is part of this function also. Property management is also the physical management of the structures and outdoor areas. Landscapingelectrical, plumbing, roof, walls, appliances, and much more are all part of the physical property. The property manager must maintain relationships with contractors and repair companies, budget capital expenditures, and monitor the quality of all repairs and maintenance.

This function ties in with the financial piece, as some improvements will require significant capital expenditures and budgeting for them. It ties in with tenant and occupancy management because it is important to tenant retention to have well-maintained properties. This is the files and records part of the property management function. Federal, state and local governments all have some jurisdiction over real estate property management activities.

Certain reporting requirements must be met for all of them. Meticulous records for accounting and taxes are a must. For reasons of liability, all activities and tenant interaction must be recorded and maintained for specified periods.

Though also related to financial functions, there are very rigid requirements in most states for the handling of funds paid by renters for disbursement to owners.

corporate real estate management pdf

In the state of New Mexico, property management accounted by far for the most consumer complaints and disciplinary actions by the real estate commission. Unlike most real estate transactions when you are representing one side of the transaction, property management involves dealing with property owners and tenants.

Property management in the state of NM accounted for the most license suspensions as well.

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The complexity and dynamics of dealing with owners and tenants add to risk. There is far more complexity, including a separate trust account in NM, for receiving, managing and disbursing rents and paying expenses. Even choosing repair companies can subject you to complaints from owners that you are showing a bias that raises their costs for maintenance.

A vacation area with a great number of rental homes and condos may seem like a good area for a property management practice.

However, upon research into the hassles, you may find that you would rather take more time off.

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Those considering specialization in real estate property management needs to understand the requirements and have a good feeling about being able to accomplish them all with efficiency and enjoyment.

It's not as easy as selling real estate. Real Estate Providing Services. Full Bio Follow Linkedin. He is a real estate broker and author of multiple books on the topic.

Read The Balance's editorial policies.To browse Academia. Skip to main content. Log In Sign Up. Anna-Liisa Lindholm. Jorge Forero. The empirical results are based on interviews with corporate real estate executives and service providers. Based on a model developed in previous research and the results from interviews, we prepare a proposed set of key performance indicators tied to real estate strategies presented in the framework.

This has also been the case in the context of corporate real estate management CREM. Historically, corporate real estate managers have tended to measure performance from an operational efficiency perspective —factors such as operating costs, costs per square foot and maintenance cost Arthur Anderson, ; Duckworth, ; Nourse, ; Bdeir, A control system concentrating only on such indicators has shortcomings.

Short-term goals lead to short- term actions, and a consequence of striving for short-term profits is cutbacks on activities that could lead to long-term profitability LaitinenOlve et al. In addition, the financial data do not illuminate the potential of using real estate to create a competitive advantage for the business.

Whilst these conventional measurements allow the corporate real estate managers to assess outlay against budget, and even to compare this with the industry norm, they do not make clear whether the organisation is spending the right amount for its needs, or whether it is maximizing its results Hinks However, in recent years the corporate real estate and facilities management industries have begun to shift their focus from proving their worth to the organisation by saving them money, to asserting that CREM actually adds value to organisations.

There is a shift from perceiving corporate real estate as a purely tangible asset to one that may also provide benefit as an intangible asset. Lindholm et al. In this model both the traditional tangible, short -term effects and intangible long-term effects of real estate decisions are included and the direct and indirect paths to influencing corporate wealth are mapped. Still, just identifying the causal relationships is not sufficient.

Developing such key indicators allows testing of the theoretical model and provides corporate real estate managers with the tools they need to identify and quantify their contribution to the wealth of the firm.

The objective of this paper is to use theory from finance and strategic management along with research on business performance, value measurement, and corporate real estate and facilities management to develop key performance measures to evaluate how corporate real estate directly and indirectly adds value to the core business. This paper presents an overview and evaluation of the performance measures used in CREM and also presents a framework for the selection of measures.

This work is based on previous theoretical models, empirical work on key performance measures in other functional areas, and interviews with real estate executives and service providers. Using previous theory as a basis, then working with corporate real estate staff will ensure that the results are theoretically sound as well as practical. The following section outlines the motive for the study, presents the framework that we use as a basis when constructing the corporate real estate performance management model and presents the background literature that was reviewed.

The research method, characteristics of the organizations participating in the research and the empirical research results are discussed in the third section. The final section draws conclusions and makes recommendations for future research. In the latter two situations overall quantitative output measures such as internal rate of return, return on equity, and return on assets, or qualitative assessments, such as comparison to core business objectives or industry benchmarks are relatively easy to apply.

In contrast, corporate real estate outputs are usually internal outputs to another part of an overall process, such as providing the optimal real estate assets to facilitate achievement of core organizational goals McDonagh, For this reason, constructing a generic model of the added value of corporate real estate management has to begin with identifying the ultimate goal of the organisation. According to shareholder value theory, the goal of the firm is the maximization of the wealth of the shareholders.

A firm should strive to maximise the return to shareholders, as measured by the sum of capital gains and dividends, for a given level of risk or reduce the risk with the same level of income. The former generally has two components: build the franchise with revenue from new markets, new products, and new customers; and increase value to existing customers by deepening relationships with them through expanded sales.

The productivity strategy also usually has two parts: improve the company's cost structure by reducing direct and indirect expenses, and use assets more efficiently by reducing the working and fixed capital needed to support a given level of business.

corporate real estate management pdf

The choice of strategy for creating shareholder value is likely to be closely tied to the nature of the organization.Looks like you are currently in Russia but have requested a page in the United States site. Would you like to change to the United States site? Victoria EdwardsLouise Ellison.

This primer on strategic property management focuses on how property held as a corporate asset can be used to add value to the primary business activity of an organization. Rather than separate the needs of the business form the management of the business estate, the aim of Corporate Property Management is to enable the reader to directly support the primary business function through strategic management of corporate property, thereby adding value to the business as a whole. The book introduces a generic framework designed to assist in the analysis of any corporate property portfolio, working as a practical aid to decision making.

The book is structured around this framework, providing a detailed review of its application and uses. Undetected location. NO YES. Selected type: Paperback. Added to Your Shopping Cart. This is a dummy description. Corporate property is routinely identified as the second biggest cost within a business organization after staff. Effective management of such a major asset requires a fundamental understanding of both the operation of the property markets and the operational requirements of the business occupier.

Their interests span the sustainable management of all types of property - from retail and office buildings to forests and coastal zones. They have combined teaching experience of 25 years at undergraduate and postgraduate level, as well as practical experience in property management.

Table of contents Preface. Introduction to Strategic Property Management. Formulation of strategy: adopting an analytical approach. Property Performance Evaluation. Understanding Property Characteristics: Information Requirements.

What are the global trends in Corporate Real Estate Management?

Organisational Objectives in Relation to Corporate Property. Formulating Strategies for Property Management. Borders UK. Clifford Chance.

Youth Hostel Association of England and Wales. Cancer Research UK. Ardtornish Estate, Morvern, Scotland.To browse Academia. Skip to main content. Log In Sign Up. Muhammad Redza Rosman. Hamimah Adnan. Interviews were held to gather the information by the respondents on their application of CRE risk management strategies. Economic Value Added EVA was used as a tool to measure the company performance and the results were then correlated with the mean of strategies derived from the analysis.

It was found that most of the organisation has taken risk management as part of their corporate strategic planning. Risks are among the critical issues that should be undertaken in ensuring the best performance in an organization, projects Bon et.

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Successful achievement of objectives de- and parcels of land at the disposal of private and public or- pends on the management of risks to ensure the optimal deci- ganizations that are not primarily in the real estate business. Corporate real estate is an input factor in the production pro- cess and provides spaces to support the outputs of the firm.

Bajaj reported that if a risk is not identified it cannot be controlled, transferred or otherwise managed. Therefore risk CRE constitutes a large percentage of fixed assets of a firm. Executives face a operation, occupation, investment and development.

CRE has number of risks in managing corporate real estate assets. Most to be managed as an integral part of business resources man- important are varied risks associated with property development. In corporate real estate, the main financing risk to physical risks to regulatory risk Huffman, The key element to all these To assist in the classifications of CRE, Adendorff and Nkado strategies is the identification and impact assessment of risks.

Strategic prop- applied continuously and rigorously Bajaj Examples of such Corporate real estate was referred to by Zeckhauser and Sil- properties are the manufacturing plants, warehouses etc.

Core verman and as the land and buildings owned by property refers to real estate that a firm needs to control for companies not primarily in the real estate business. Compa- its existing and or future operations and for medium term nies in the real estate business are generally taken to include business strategy.

Examples of such properties are commercial, developers, investors, and traders in real estate per se. Bans- industrial or retail facilities from which the company operates. This method is selected because the output tiveness. Gibson et al, The SPSS output is designed to give detail breakdown of the Corporate real estate managers have long understood the con- responses in various categories and cross-tabulated them for cept of risk.

Much of their work is driven by transactions and easy reference and interpretation. As reviewed in the literature financial and operational risk at the single asset level. If organi- review, Boehlje claimed that Economic Value Added is zations are attempting to manage the corporate real estate risk, a critical concept in evaluating the performance of any busi- then they need a framework to identify the sources of risk Si- ness, which indicated that EVA allows management to quickly mons Operational risk is for many organizations the most see in which way a company is heading and that EVA serves common form of risk Williams et al, Operational risk is as a good predictor of future performance.

Executives face a number of risks in managing corporate real estate assets.To browse Academia. Skip to main content. Log In Sign Up. This new wave of professional enthusiasm with Anglo-Saxon ori- Contrary to property companies, whose core business and gin was embraced by both scientists and industry.

Corporations corporate strategy have a real estate focus, are real estate- established real estate departments and enabled their admin- related strategies within non-property companies clearly subor- istrative property or land departments to do more than simply dinated toward the overall corporate strategy.

In short: The core execute tasks. However, soon afterward CREM became silent business defines how to deal with its real estate, not the other again, and only with the arrival of the financial crisis in did way around.

This is the critical challenge corporate real estate CREM become a part of public awareness. The fact that properties are not part of the core business but are real estate business was seen as operational resources or fixed capital to accomplish core corporate real estate business goals leads to a few specifics among corporations with regard to the handling and management of their used or owned management CREM. A counter- check with their real estate departments still derives a high own- ership ratio within their property portfolio only a slight decrease that this lack of transparency impedes companies from knowing from 75 to 68 percent between and However, the value in their assets.

ROI — all prerequisites for which properties of the traditional real One of the reasons for this is that many corporations still per- estate market are not commonly known. Institutional investors ceive the alignment between corporate strategy and CRE strat- consider real property in their portfolios a way to stabilize and egy as a one-way road with the CRE department deemed the safeguard other riskier investments.

Ten Principles of Corporate Real Estate Management

Therefore, it seems logical executor of operational directives. Yields are being com- monly used as a term to describe profitability. Depending on the type and the risk profile of the respective property, yields between 4. Such factors for success with regard to an achievable yield for holding a piece of property are, however, related to the view of a real estate investor. CREM can under such circumstances only provide a real estate- related optimization within the framework given by the core busi- A typical way to measure ness.

Thus, a comparison with the traditional view of institutional real estate investment makes sense only upon full marketability success is through deriving of the respective property with regard to its asset type and site profitability indicators from location.

The marketability is, however, defined by its potential us- ability for third parties, which is not applicable for the vast majority success factors whereby of corporate properties. Manufacturing enterprises are for many logical reasons required to locating and further develop only at the profitability can be understood edge of or far away from urban settlements. Under such circumstances there are only very limited alternative ways of use for these facilities, for example, a cost through respective conversion of standardized production or storage buildings.

Contradictions within the Such challenges for the marketability of corporate property respective value proposition can be shown especially in quantita- are easily understandable for production and logistic facilities. For example, it has to ability — as well as user or customer satisfaction. As Financial targets and performance targets are basic economic a result, such properties become a significant burden and liability objectives and focus on the methodology of management and for the core business.

The situation even worsens once business operation within a company. Success targets are rather formal declines and vacancies arise that cannot be absorbed through economic objectives to visualize the aspired commercial goals as a letting to other users.

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The remaining business activities therefore result of pursuing fulfillment of those basic economic objectives. Here there becomes more need for alignment between real to a highly dynamic business estate and overall corporate requirements. However, only a profes- sional CRE organization and a proactive operating core business will environment, to achieve further recognize this as a positive overlap of common interests and will be productivity increases and — as able to successfully solve the tasks that will arise.

Internal corporate stakeholders and core business and supporting functions have com- one of the ultimate goals — to mon goals. These require a holistic, comprehensive approach with other functional departments such as HR and IT and their individual generate ambitious returns. Land itself has in principle an unlimited life span. As a result, many Arbeitspapiere zur immobilienwirtschaftlichen Forschung und Praxis, Volume 10, p. Welche Rolle spielt der e.Category: Built Environment.

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Corporate real estate strategies and organizational culture

This paper aims to investigate employee well-being in relation to office landscapes in a post-relocation context. The aims are to identify spatial attributes of the office…. Please share your general feedback. You can start or join in a discussion here. Visit emeraldpublishing. Volume 22 Issue 1 Issue 4 Issue 3 Issue 2 Issue 1 Issue 3 ERES Issue 2 Strategic campus management.

Issue 1 Sustainability and Corporate Real Estate. Issue 3 The modern work environment and new ways of working. Issue 2 European Real Estate Society Issue 1 Sustainable Real Estate. Issue 2 User Needs and Preferences.


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