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The real estate hangover

Procurement BPO facilities market insights: Your bloated portfolio is dragging down your business

Overview

Real estate is a critical asset for every organization, representing not only the physical space where work is produced, but also a representation of culture and the location where customers interact firsthand with the brand. As a result, the quality of corporate real estate impacts productivity, brand perception and employee morale.

Yet, it’s surprising to note that most organizations are encumbered with too much real estate, often of the wrong quality to support modern work styles and brand perception. The average firm has 30-50 percent more real estate than it needs and this excess is a substantial drag on financial performance.

The average firm has 30-50 percent more real estate than it needs and this excess is a substantial drag on financial performance.

Key Findings

There are several factors pushing down the demand for physical workspace per employee and leading to waste. Older work paradigms and what used to make sense no longer does, in many cases, as work has become more mobile, technology-enabled and collaborative. Other factors beyond the secular decrease in demand for space are also at play in creating the Real Estate Hangover conditions: M&A, idled/mothballed facilities and business cycle volatility.

Getting real estate back under control is a challenge, but the potential financial benefits and impact on employee productivity, morale and brand perception are substantial. Following are three major steps you can take to relieve the Real Estate Hangover.

  1. Strategic Re-alignment—Commit to a Comprehensive Real Estate Management Approach

  2. Force Multiplier: De-Fragging the Real Estate Portfolio

  3. Optimize Facilities Management

Recommendations

Corporate real estate is a critical, but often poorly managed asset for most companies. Whether your firm is being negatively affected by an over-supply of physical space, or managing existing facilities in a sub-optimal way, tackling the Real Estate Hangover will drive substantial short and long-term financial benefits for your organization while also likely having a positive impact on efficiency, productivity, morale, and brand perception.