Commercial real estate costs can account for 30-plus percent of a typical company’s expenses, but often opportunities to reduce those costs are overlooked when attention is focused on headcount, salaries and employee-related expenditures. Here are some simple ways that operational executives can boost real estate efficiency – areas we consider low-hanging fruit – almost immediately.
1. Realign space to create more efficient workflow
As businesses evolve, old space configurations can become outdated and inefficient. Updated space designs can have a significant impact on expansion and contraction plans and help align real estate facilities with business goals.
2. Sublease excess space, reduce rent to monetize space
Whether it is through a more efficient workflow or simply a shift in business plans, companies may have space obligations they do not need. Why not sublease some space and monetize that obligation?
3. Give to get: extend lease term, take less space
A facility’s location may be perfect, but the size isn’t right. One solution is to work with the landlord to trade space for term, effectively minimizing the overall long-term obligation while the landlord has a longer guarantee.
4. Cut losses; negotiate early termination
Because business dynamics can shift and render a location unnecessary, it sometimes makes more sense to simply minimize losses and negotiate an early termination to provide some relief.
5. Consolidate locations
Trade two inefficient locations for one location to attain maximum value.
When corporate real estate executives can implement immediate short-term tactics and proactive, long-term strategies, they’ll be better positioned for workplace solutions. To make their job even easier, executives can utilize a real estate intelligence dashboard, like Curve, that collects data and crunches the numbers for them.
Amber Strang serves as the executive managing director of Tenant Advisory Services for Transwestern. Comprising more than 250 tenant advisors, the business assists a growing roster of occupier clients with their local, regional and global real estate needs.