REoptimizer^® Blog

Property management without commercial real estate software is much like visiting a sausage factory or watching Congress make laws. You could do it, but you probably wouldn't want to. While each commercial real estate package offers different features, the feature set offered by REoptimizer is a good benchmark of how adding software can help your company with project management.

Robust commercial real estate software can be an important tool for making great decisions with your portfolio. However, its limitations are the same as any other system. The data you get out of it is only as good as the data you put into it. With that in mind, great commercial real estate decision-making requires a more holistic approach:

Once upon a time, offices had large reception desks to accommodate switchboards and every private office had a group of dedicated secretaries that supported each executive. Things have certainly changed. In the modern world of corporate real estate, new technology changes the way that buildings are leased, how they operate and how they get occupied. Here are some technologies that are growing quickly and how they will change everything:

As corporations turn to technologies that require immense power for computers and security, the market for data centers has grown. In fact, total leasing volume for this type of property rose about 25% between 2012-2013.

New trends in office design and workforce habits may have brought you to consider reducing the amount of office space that you occupy. A smaller office space can reduce costs dramatically. Unfortunately, lease terms like your expiration date and the requirement to pay rent for the entire space might stand in your way. However, there are ways around this problem. Here’s how to shrink your office space: 

Doing a gap analysis that aims to improve your corporate real estate strategy is an excellent way to ensure that expenditures are not wasted. A gap analysis is a three-part strategy. First, measure each space’s impact on profitability. Second, measure how each space is utilized. Finally, focus on cost metrics that help identify where savings can be made.

Property management is essential to corporate real estate optimization. Measuring your building’s operational efficiency is imperative when your goal is to minimize costs. This post will highlight some of the key metrics you should use to measure your building’s operational efficiency and how you can use this knowledge to take action and save your company thousands.

Energy Consumption

When looking at the amount of resources your business consumes for heating, electricity and water, there's one simple rule: less is better. Sometimes, you can work with your existing space to better utilize your existing resources. Other times, you will need to make some minor changes. Swapping out incandescent light bulbs with compact fluorescent or LED bulbs or adding window treatments are great low cost strategies that reduce energy usage. Major improvements to corporate real estate optimization might require significant capital expenditures, such as the installation of new HVAC systems or photovoltaic solar panels.

Want to learn more about building improvements that can reduce energy consumption? Read this article.

Electricity and Temperatures

There are two property management metrics that can immediately impact your bottom line. Adjusting your policies to control them can help attain corporate real estate optimization:

• Thermostat Temperatures: While the value of allowing your building's temperature to fluctuate during off times can be debated, one factor is certain. Heat to a cool room temperature in winter and cool to a warm room temperature in summer. This ingenious tactic not only cuts costs but also mimics the outdoor temperature, potentially improving employee health and productivity.

• Shutdown Times: Drive through any downtown, and you'll see whole offices lit up late at night. Sometimes, it might be because they have dedicated employees, but frequently it's because the lights are left running – burning energy and money. Setting a timer or motion switch to turn lights off at night can save real money. Shutting down computers at night makes a difference, also.
  
  

Maintenance vs. Repairs

Look carefully at what you spend on maintenance contracts and compare it to what you spend on repair calls. You’ll probably find that, while it's possible to waste money on unnecessary maintenance, there is also a tipping point where every dollar of maintenance savings generates more than one dollar of repair expense. Spending a little now to maintain your space can generate long-term savings.

Maintenance Staff Cost

You know the cost of your maintenance staff. However, calculating their cost relative to using third-party maintenance might lead to a different conclusion. Divide what you spend on your staff by the number of productive hours that they spend. For instance, if you pay a maintenance person $55,000 per year, all in, and he only does 20 hours worth of projects per week, you're paying him roughly $55 per hour. If you can find third-party staff at $40 per hour, you could save money by subcontracting the work out to them.

Average Vendor Service Time

If the average vendor has been serving a location for 20 years, there's a good chance that you're paying too much. Staying with the same vendor, year in and year out, might be convenient and might offer consistency, but it also gives that vendor the opportunity to bump the price up a little bit each year until you're paying too much. While you don't want to be churning vendors every few months, rebidding every time a contract comes up can help find better pricing or keep your existing vendors honest.

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