Commercial real estate software is more than just a tactical tool. You can do more than manage critical dates and ensure that you don't miss CAM reconciliations, rent adjustments, options and renewals. Some packages also include detailed expense tracking capabilities that let you do comparisons and strategically analyze your corporate real estate portfolio's performance.
Platforms like REoptimizer® pull in data from competing buildings so that you can benchmark your spaces against their markets.
Portfolio Benchmarks
When you benchmark your portfolio against itself, you can look at properties against each other, look at properties of the same type or look at properties in the same area. Different metrics are appropriate on different scales, but using your commercial real estate software to rank the properties in your portfolio can help you identify the outliers that are unnecessarily driving up your occupancy costs. Here are some useful metrics. Click the links to learn more about each.
- Square feet per employee - This metric lets you compare buildings of the same type for efficiency across the country.
- Utilization ratio - Used with warehouses, you calculate this by dividing the amount of material that you have stored by your warehouse's total capacity in cubic feet. While it's possible to over-utilize your warehouse, a 25% ratio is generally good and a 10% ratio means changes need to be made.
You can also use commercial real estate software to drill down on specific expenses on a per square foot basis. For instance, if your company is looking to save money and reduce its environmental footprint, it can compare its electric usage for each space on a per square foot basis. Take out climate control, which is frequently included on the building's meter. An office in Washington, DC should use about the same power as one in San Francisco, and a retail outlet in Atlanta shouldn't be too different from one in Phoenix.
Market Comparisons
Some commercial real estate software gives you the option of entering, or purchasing, commercial real estate data from the surrounding market. That information lets you see at a glance what other tenants are paying, what other landlords are charging and what terms are prevalent in your markets.
- Properties located in states that reassess property taxes on sales typically have higher taxes if they're held by owners that churn them. Comparing tax reimbursement histories can help you find buildings that have lower tax expenses.
- Rent comparisons let you see what comparable space costs relative to your space.
- Load factor comparisons allow you to find the most efficient space available so that you pay for more cubicles and fewer hallways.
- CAM comparisons allow you to find the most efficiently managed buildings.
While getting market data into your commercial real estate software usually requires an investment of capital or manpower, the savings that it can enable are significant. However, even without this data, portfolio comparisons and benchmarks help you better manage your commercial real estate expenses to increase your return on investment.
Need to manage your commercial real estate expenses?
Our 10 Step Guide to Sustainable CRE Savings is a good place to start
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