A contraction option is a fixed right in your lease to reduce the size of your premises at some future date, but prior to your lease expiration date. You can use it to downsize an office space prior to the lease’s scheduled expiration date. As you might expect, landlords (and their lenders) vigorously resist giving…
Over the years we have found that operating expenses (OE) are among the most misunderstood real estate cost component, particularly because there is no clear standard of how these costs are addressed in leases. OE pass throughs can easily grow over a lease term to significant levels, particularly given the “compounding” nature of how they…
There has been a ton of talk, and articles published on this subject. We all now are aware of what’s coming and when. Here is a concise summary of what you need to know and do to comply and get ahead of the curve. EXECUTIVE SUMMARY Preparedness is the key The intent of the…
Perception is finally changing! Corporate real estate is not merely an operating necessity; it’s a strategic resource. It affects everyone – customers, employees, investors, regulators. Real estate is not easy to manage. In many organizations, real estate remains a reactive, second order staff function, focused on discrete projects and transactions rather than on the company’s…
ENABLE THE BUSINESS PLAN Develop and propose solutions proactively to build sustainable, trusted relationships with key business and functional stakeholders. It’s also an opportunity to add value consistently across the business cycle, rather than at the time of transactional or operational events. DON’T LIMIT YOUR FOCUS TO FACILITIES & REAL ESTATE Instead, focus first…
Historically, most corporations have analyzed the lease or purchase of office and warehouse space using standard financial analyses of the project’s direct impact on “bottom line” figures like net operating income or EBITDA. Cutting edge corporations today are applying better operational and quantitative views to determine the true impact on a broader and more meaningful…
The market pendulum has fully swung to “landlord favored” in the vast majority of markets in the USA and globally, and is likely to stay that way for several years to come. This shift, coupled with rising inflation (that will increase the cost of building operating expenses), means significant cost increases for corporations whether they…
Every year, different industry groups, consultants and government entities publish their lists of “Top Locations for Business” (Cities, States & Countries). While the intent is good, and the methodology sound, there is significant fault in the findings and corporations should only use them as a comparative starting point. The data points are solid: Accessibility, cost…
Few areas hold as much impact on capital outlay as real estate and leasehold expenses. Ensuring that your company is not overpaying is integral to fiscal management. You know an audit is in order when you see: SIGNIFICANT JUMPS IN OPERATING EXPENSES / ADDITIONAL RENT Performing a simple trend analysis of your year-to-year operating…
Corporate leadership ranks “overall efficiency” as very high on their list of priorities. It’s not always directly related to corporate real estate, but it should be. When you tour one of your company’s facilities, it seems to be fairly efficient. What isn’t fully apparent are the significant gaps in utilization rates & overall efficiency created…