Most companies are reactive in their commercial real estate needs, especially as their business locations increase. To become proactive, companies need to see the big picture - there needs to be a vision that comes from the top. If the CEO or Division Manager hasn't defined a vision for the business, it's hard to be proactive with real estate. A vision tells people where they want to go, so real estate can be planned and managed in order to support that vision and those business goals.
Other suggestions for how a company can become more proactive regarding their real estate are:
- Having a robust and accurate data source, so the status of a present space is known. This allows you to determine how best to use that space.
- Making your portfolio efficient by getting rid of entire locations, like consolidating three locations into one. This will have a big impact on your EBITDA - earnings before interest, taxes, depreciation, and amortization.
- Finding a real estate professional that looks at the entire portfolio, not just individual transactions. You need a manager that acts as a general, not someone who just fights the war.
At Mohr Partners, we have a whole staff negotiating transactions. What sets us apart is the big picture planning: consolidating locations and moving into low-cost environments. Doing this can save a company big money.
For example, a company that anticipates the future might see they have three leases coming due within a three-year period. As a proactive company, they would likely contact a real estate professional to work out a strategy that supports their business vision, like moving all three offices to a better place, once the leases expire on a common date. When the expirations come up, they would consolidate locations so three of everything wasn’t needed - almost a guaranteed savings.
Many people can perform a transaction and do it well, but not everybody thinks through the big picture - that's where the real value is added. That's our calling card at Mohr Partners.
George E. Grace
Mohr Partners, Inc.
232 Madison Avenue
New York, NY 10016