How to Create a Successful Corporate Real Estate Strategy: 6 Key Components

A corporate real estate strategy is a critical aspect of business success in regards to both managing corporate property now and planning for the future. Whether you have a hybrid workplace, all remote employees, or a traditional setting, a good strategy is essential.

Creating a successful corporate real estate strategy encompasses a broad range of responsibilities. From including the right parties in the planning process to evaluating business goals, analyzing data, leveraging technology, and supporting sustainable practices, there’s much to consider. Below, we’ll explore 6 key components of creating an effective CRE approach.

What is Corporate Real Estate (CRE)?

Corporate real estate (CRE) is real estate that supports business functions. Companies own corporate real estate properties for the purpose of using them for business operations. Corporate real estate is distinct from commercial real estate (which shares the initialism CRE).

Commercial real estate is often used for generating some kind of return on investment, whether through appreciation or through rental income.

Corporate real estate, on the other hand, is measured by its ability to successfully support the functions of a business. It’s vital for corporate real estate to align with the goals of a business in order to support the most profitable and strategic business operations possible.

Corporate real estate can span a range of property types, including:

• Offices
• Warehouses
• Data centers
• Retail spaces used for company operations
• Manufacturing plants
• Laboratories

What is a Corporate Real Estate Strategy?

A corporate real estate strategy (CRE strategy) is a strategic approach to the management of a real estate asset (or assets) that are used for business operations. These can include properties that are either owned or leased.

Corporate real estate strategies encompass a range of functions and responsibilities. When assessing corporate real estate portfolios, the CRE team must take into account many factors. Some of these include:

• Property acquisition
• Facilities management
• Functions of the business
• Number of employees (including remote workers, traditional office staff, and hybrid work models)
• Economic trends and property values
• Technical needs and requirements
• Sustainability requirements
• Space optimization
• Long-term planning

While commercial real estate is largely dedicated to boosting asset value and income-generating potential, corporate real estate leaders hone in on different strategies for achieving the goals of the business as they relate to the space that’s used. While approaches to corporate real estate can vary significantly from business to business, there are a number of best practices that will help any business in their strategy to capitalize on effective corporate real estate function. We’ll delve into these further in a moment.

Benefits of an Effective Corporate Real Estate Strategy

Almost without exception, no corporation is exempt from being able to benefit from a CRE strategy. Whether business operations are running smoothly, or you don’t currently have enough desks for all of your employees, a proactive approach to real estate decisions is what will keep business activities on the right track. More than simply assessing short-term solutions, it’s important to carefully consider a CRE plan for the long term.

Change is inevitable, whether from within or without (or both). Even if the business stays virtually the same (although what business does?), the economy and opportunities outside will shift.

Just a few benefits of having an effective corporate workplace strategy include:

• Employee satisfaction. Effective facility management and planning for real estate assets creates an environment where employees can thrive.
• Cost reduction. Through continual improvement, sustainable practices, lease optimization, and effective planning, companies can lower operational costs and other expenses.
• Increased productivity. Well-planned commercial spaces facilitate a better work environment, leading to increased productivity.
• Company reputation. Prudent use of company space contributes to a respectable company image in the community and among customers and clients.

No Two Companies Are The Same

Every business is different, and there’s no cookie-cutter plan for corporate real estate management. While some businesses rely on remote work and require minimal office space usage, others rely heavily on physical spaces.

Some experience rapid growth, while others have similar requirements for many years. Some businesses focus on advanced technological requirements, while others value different amenities such as large industrial facilities with maximum parking capacity.

Creating the best strategy means asking the right questions for your business and honing in on the needs of the company. Some questions to consider when making a CRE strategy include:

• How many employees do we have, and how soon do we expect this number to change?
• What’s the projected growth of the company?
• How much square footage do we need?
• What amenities are important?
• Where are our clients or customers located?
• What type of lease is best? Are long-term leases or short-term better for business needs?
• What does parking and public transportation look like in this location?
• What type of technology do we need?
• In what ways can we reduce our environmental impact?
• What market conditions do we need to take into account?

Who Should Be Involved?

The best strategies are made when the CRE team collaborates with C-level executives, other senior managers and stakeholders, human resources, and even employees to engage in a thorough understanding of the company’s needs. Because the corporate real estate plan directly impacts all members of the company, it’s very much worthwhile to tap into the input of a broader planning team before entering into the decision-making process for CRE choices.

These parties can help with understanding the company’s overall business strategy, considering economic factors, analyzing technological requirements, and getting a better picture of the everyday operations of the business.

What’s Necessary for an Effective Corporate Real Estate Strategy? 6 Essential Components

These six areas are an essential starting place for forming an effective corporate real estate strategy.

1. Consideration of overall business goals
2. Effective data analytics
3. Collaboration with stakeholders
4. Leveraging technology
5. Sustainable practices
6. Continual improvement and strategizing

1. Consideration of overall business goals

Collaborating with the broader members of the company is one of the best ways to align the corporate real estate strategy with both the short-term and long-term goals of the business. The role of the real estate portfolio is to promote effective, efficient, and profitable business functions.

In order to plan toward this end, decision makers must start with understanding major business objectives and the broader company picture. How (if at all) does the company expect to grow in the coming years? Should new locations be considered? What are the intentions for remote versus hybrid versus in-office work models?

How can the facilities promote a healthy company culture, collaboration, productivity, and a better employee experience?

How will intentions for the future of the business affect lease terms, expansion options, and location priorities?

A thorough understanding of company needs, major projects, and future business projections plays a pivotal role in obtaining a competitive advantage in the CRE plan.

2. Effective data analytics

There are numerous analytics tools available to businesses for the purpose of collecting objective data in regards to company operations as well as external factors. Tapping into effective data analytics allows CRE leaders to gain an impartial understanding of trends within the facilities as well as outside market trends.

Effective data-driven insights can paint a clear picture of space utilization within the building(s), operational efficiency, energy efficiency, and more.

Externally, an analytics-based approach provides important information for assessing market rates as well as the market value of the current facilities. This data is essential for making decisions about tapping into new markets for retail locations, office buildings, or other structures.

3. Collaboration with stakeholders

Be sure to include stakeholders in decisions about company real estate usage. Business leaders, employees, real estate partners, and other stakeholders should be part of the strategic planning process. Effective communication across the organization not only ensures smooth day-to-day business operations in regards to building usage, but will allow the CRE team to make the best decisions about the future of corporate real estate within the company.

4. Leveraging technology

Utilizing the available technology within the workspace offers the opportunity for better management and data analysis. Technological advancements have enabled companies to capitalize on vital information and make better use of the available facilities. Proptech tools and IoT (Internet of Things) are widely used tools for enabling more efficient building use as well as improving business processes as related to the real estate industry.

5. Sustainable practices

In our modern world, incorporating sustainable practices into the comprehensive corporate real estate plan is key. Environmental sustainability and awareness has become an increasing need and social responsibility in our current times. Finding new ways to prioritize sustainability is important for three main reasons:

1. It reduces the company’s carbon footprint while conserving natural resources
2. It tends to improve business operations with cost savings and by promoting employee satisfaction
3. It creates brand loyalty among customers and clients

Sustainable practices focus on effective energy efficiency solutions, improved air quality, and reduced waste, among others.

6. Continual improvement and strategizing

A successful strategy is an evolving strategy. If the CRE strategy seems to be going well – excellent! But that doesn’t mean it’s time to sit back and relax. Effective corporate real estate management means being able to respond to market conditions and current trends, continuing to assess key performance indicators, and gathering and reevaluating input from management and employees.

Leveraging the Experience of a Tenant Representation Broker

Even with a dedicated corporate real estate team, it’s helpful for many companies to consider the outside help of a local, experienced tenant representation broker. A tenant rep broker is someone who works specifically on the tenant’s behalf to not only secure the best terms and price on a new property, but also to continue ensuring that the tenant is in the best position for success.

In other words, whether you’re contemplating moving to a new property, considering expanding to additional locations, or just looking to optimize your current lease, a tenant rep broker can help. Plus, as commercial real estate brokers who work specifically on the tenant’s behalf, there’s generally no extra cost to you as the tenant. This is because commissions come from the landlord or seller of the property.

These real estate professionals are experts in local market dynamics and can help you assess the real estate landscape. Whether you’re signing a new lease or renewing an existing one, this expert knowledge can give you a leg up on securing a favorable deal. Tenant rep brokers understand neighborhood trends, market values, and the real estate demands of the community.

In addition, tenant rep brokers have access to insider information about available properties that may not yet be listed for the public. Their access to extensive databases and network of relationships means that you get to benefit from finding ideal real estate spaces that may have otherwise been inaccessible.

When choosing a broker, it’s essential to find someone who is knowledgeable in the local market, values long-term relationships and your unique goals, is responsive and thorough, has plenty of experience, and has positive client reviews to show for it.

Read more tips for choosing the best commercial realtor on our blog.