SPP Community Session- Strategy and Portfolio Planning for Corporate Real Estate.
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Transcript of SPP Community Session- Strategy and Portfolio Planning for Corporate Real Estate.
SPP Community Session-
Strategy and Portfolio Planning for Corporate Real Estate
SPP Goals Past Activities Next Steps
Gathering Best Practices
• Survey end users• Started detailed interviews
• Interview selected survey respondents
• Summarize survey results & interview data
Sharing Best Practices
• Distribute survey results• Atlanta Summit Panel Discussion
• Webinars on Strategic Planning Activities
Advancing Best Practices
• Analyze survey and interview results
Benchmarking Strategic PlanningActivities and Next Steps
2
3
SPP Benchmarking Study
A simple question:
What are CoreNet End-Users doing in their strategic spaces?
Starting Point
4
SPP Benchmarking Study
Design a survey• Corporate Info:
• Portfolio size & complexity• CRE department size• Data accessibility
• Strategic Plan Info: • Scope / Composition / Time Horizons • Accountability / Approvals• Corporate Alignment / Driver Metrics
• Success Stories / Challenges• Interviews
Vet survey questions with End-Users and Service Providers before distribution
Multiple iterations until survey is finalized
Baseline Portfolio Complexity
Staffing, and Data
Baseline PlanningPractices
Correlational Analysis
Case StudiesSuccesses & Challenges
End-User Interviews
Step One
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SPP Benchmarking StudyStep Four
Follow-up with In-Depth Interviews• Standardized Interview Format / Obtain Comparative Qualitative Data
• Obtain details on look and feel of strategic plan• Confirm metrics and goals• Delineate management approval / interaction process• Obtain success stories / understand challenges• “How to Succeed” knowledge delivery via Webinars
Five Interviews done to date
Goal: 15-35 interviews
2012 Goal: Webinar Presentations to roll-out results
6
SPP Benchmarking StudyStep Two
Distribute Zoomerang Surveys• Chapter / Group Participation:
• New York• No. California• Chicago• SPP End Users• Atlanta• Carolinas
Excellent participation: 76 End Users
7
SPP Benchmarking StudyStep Three
Preliminary Results
0-5
Portfolio SF(Millions)
5-20
20-50
50+
25-100
<25>700
300-700
100-300
Portfolio Locations(No. of Sites)
Corporate End-Users deal with complex portfolios
29%
16%
9%18%
24%
63% have more than 100 locations 47% have more than 5 million SF
23%
16%
45%
8%
8
Responsibility and Approval
• Responsibility for strategic plans differs by organization.• Less than 50% of organizations require formal approval by business line
management or senior staff external to CRE.
Is your real estate strategy document formally approved by senior management?
For internal guidance and planning only
Busines line management
Senior management external to CRE
CRE senior management
0% 10% 20% 30%
What group is responsible for real estate strategic planning?
Other
Transaction Managers
Customer Relationship Management
Strategic Planners
Vice President
0% 10% 20% 30% 40%
Other category does not include service providers or space planners.
9
Strategic Planning Drivers
• Business alignment is the primary driver for 60% of respondents• Cost reduction is the primary goal for 32% of respondents. • Only 42% of plans have explicit cost saving targets
What is the primary driver for your real estate strategy?
Does the approved strategic plan have established cost savings targets?
Other
Portfolio Risk
Portfolio Flexibility
Cost Reduction
Business Alignment
0% 20% 40% 60%Target > 15%
Target 10-15%
Target 5-10%
Target 0-5%
No savings target
0% 20% 40% 60%
10
Strategic Planning Metrics
• 72% consider real estate cost per person a primary driver. • Less than half compare real estate cost to enterprise revenues or costs• 43% of respondents are including sustainability metrics in their plans
Which metrics are the primary drivers for CRE strategy / performance?
Are sustainability metrics part of your organization's real estate strategic plan?
Other
$ / SF
SF / Person
$ / Person
$ / Revenue
0% 20% 40% 60% 80%
No
Yes
0% 20% 40% 60%
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Long-Term Plans and Documention
• Just over 60% have written plan that includes more than performance goals and guiding principles.
• The largest share of respondents complete plans for 3-5 years.
Do you have a written plan that includes more than annual performance goals and guiding principles?
No
Yes
0% 20% 40% 60% 80%
If you have a written plan that includes more than annual performance goals and guiding principles, what is the number of years for the planning horizon?
Plan for >5 years
Plan for 3-5 years
Plan for 1-3 years
Plan for 1 year
0% 10% 20% 30%
Percentages are share of total resondents
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Data Challenges
• Most respondents have access to basic real estate data.• More than half have headcount forecasts that are directionally accurate for
1-3 years. Is that sufficient for planning?
What information is tracked by CRE? Do you have access to directionally accurate ( + / - 20%) headcount projections? If yes, for how many years?
Critical Dates
Operating Expenses
Rent
Vacancy
Space Type
Headcount
Seats
SF
0% 20% 40% 60% 80% 100%
For > 5 years
For 3-5 years
For 1-3 years
No
0% 20% 40% 60% 80%
13
Round Table Discussions
• Current research task forces
- Discussion of current activities
• Other topics
– What are your challenges?
– Best practices - what resources have you found most beneficial?
– What could be next steps for this topic?