Corporate real estate executives are employing strategies that add bottom-line value through quick responsiveness (agility) to changing business and economic conditions. A new survey conducted by CBRE, in partnership with CoreNet Global, reveals a need for corporate real estate departments to become more effective partners in the agile transformation of their broader organizations.
“The mid-term planning horizon for long-term real estate decisions is uncertain at this stage in the economic cycle, and exponential technology advances are further challenging how and where work gets done,” said Julie Whelan, Americas head of occupier research, CBRE. “Focusing on agile processes today will help occupiers better prepare for inevitable change in the future.”
As part of the survey, 87 participating organizations, primarily in the finance, technology, government, manufacturing and pharmaceutical industries, self-described their level of agility and identified agile practices they regularly engaged in.
1. Portfolio Agility: the ability to rapidly adapt, scale and reposition the organization’s real estate portfolio to support shifting enterprise needs
Sixty-seven percent consider portfolio agility as the most important type of agility for business success, yet only 14 percent consider themselves highly agile in this area. The most prevalent portfolio agility practices included:
- negotiating flexible space options in lease
- seeking shorter and/or more flexible lease terms
- supporting an enterprise-wide flex-work program
- delivering free address work environments
“New workplace guidelines for efficiency have altered the way companies plan for density and more occupiers are incorporating third-party ‘agile space’ into their overall real estate strategy. While frequently used for individuals and small teams, some companies are testing this strategy on larger groups of employees, now increasingly viewed as consumers, because the offering typically provides the aesthetics, amenities and experience that appeals to today’s workforce,” said Brandon Forde, executive managing director, Advisory & Transaction Services, CBRE.
2. Digital & Technology Agility: the ability to execute a vision for corporate real estate technology today while monitoring and accounting for technology that may be available in the future
Only 10 percent believe their corporate real estate digital & technology strategy is highly agile. The most agile organizations are monitoring emerging trends in technology and creating sophisticated business analytics and dashboards to inform the C-suite.
Fifty percent of survey respondents maintain a digital & technology funding mechanism, highlighting the continuing challenge of prioritizing real estate technology needs among organizations today.
3. Organizational Agility: the ability to easily scale the organization’s core real estate team to serve business needs
Only 16 percent of respondents consider their corporate real estate organization as highly agile, yet the survey found they were not employing any materially different strategies from their less-agile peers.
In-house real estate teams tend to be lean and 69 percent of respondents leverage third-party partners to outsource certain real estate functions, such as brokerage, project management, facilities management, transaction management and lease administration.
“Corporate real estate departments are changing their operating models and placing a higher value on leveraging service provider capabilities, coverage and expertise. This approach, particularly when undertaken in a comprehensive and integrated manner, enables the internal CRE organization to stay focused on more strategic forward-looking business priorities. This becomes all the more important in an increasingly dynamic, unpredictable economic environment,” said Karen Ellzey, executive managing director and global lead, Management Consulting and Analytics, CBRE.
Read the full report on CBRE’s website.