3 Things to Avoid When Managing Your Corporate Real Estate

Commercial Real Estate Tips More and more companies are having members of their teams with no real estate experience manage their corporate real estate portfolios. Doing this can seem like a good way to cut costs by eliminating staff. However, if you're the one that got the assignment, you also know that it isn't easy to manage a portfolio. Here are the three most important mistakes to avoid when it comes to your company's properties.

Missing Key Dates

Your rights under your leases are tied to meeting certain timelines. If you don't pay your rent on time, you could find yourself subject to notices of default or even eviction. Every year, your landlord will usually reconcile the amount hat you are paying in reimbursements for building expenses. Frequently, you have a window in which to request an audit or to have your reimbursements recalculated. If you miss that window, you could end up stuck with what your landlord tells you your expenses should be for another year.

Corporate real estate portfolios also operate on longer time horizons. When a lease comes up for renewal, you typically have to notify the landlord of your intentions by a certain date and, if you miss that date, you could end up losing any rights that you may have to continue your occupancy. On the other hand, if you know that you're going to move, you typically need to start that process as much as two years in advance of your move out date.
View our Critical Date Management article HERE.

Looking at Sites in Isolation

When making decisions about your corporate real estate portfolio, one of the biggest mistakes you can make is to not look at every location in comparison with every other one. For example, you might think that your Los Angeles sales office has little to teach you about your Las Cruces, NM outpost. However, an office worker needs about the same amount of space everywhere -- desks and phones don't get bigger just because they're located in a small city instead of a metropolis.

When you use your entire portfolio to benchmark the rest of your spaces, trends emerge. You can see beyond the obvious fact that New York City office space costs more than space in Allentown, PA. Instead, you are able to look at factors like warehouse efficiency, sales per dollar of rent and square footage per employee that let you make portfolio-wide efficiency calculations and separate between your good sites and the ones that need to be taken out of your corporate real estate portfolio.

Going It Alone

Finally, no matter the size of your internal corporate real estate team, the biggest mistake you can make when it comes to sourcing space or negotiating leases and purchases is going it alone. When all is said and done, no one is better at helping you get the best real estate solutions than a dedicated tenant representative. They bring a high degree of market and negotiating experience and knowledge to bear for you and, in most cases, won't charge you for their services. The landlord or owner on the other side of the table has a real estate professional in his corner, and you should too.