6 Important Steps to Review Your Real Estate Portfolio

MCREA can improve your operating margins through more efficient and effective administration and management of your real estate portfolio

Our Corporate Real Estate Portfolio Diagnostic Review was created to evaluate the real estate portfolio of a multi-national company. We have now expanded this model for use by other clients with multiple locations, nationally and internationally.

The Savings Roadmap was developed to execute a cost savings strategy utilizing the information contained in the Portfolio Diagnostic Review.

STEP 1 – Discuss Your Firm’s Real Estate Management, Process And Protocols

How is your portfolio of properties administered and managed?

What type of database houses your real estate portfolio information?

How are critical dates disseminated to key personnel?

How are new real estate projects launched and tracked?

How are changes to the portfolio tracked and measured over time?

What Key Performance Indicators (KPI’s) are utilized? (costs, headcount per square foot, etc.)

STEP 2 – Catalogue All Real Estate Information in a Centralized Database Management System

Abstract lease documents in uniform and consistent fashion – lease terms, options, payments and critical dates

Produce standard reports including space, cost, options, expiration dates, escalations, lease type and reimbursement method

Report identifying future liabilities, risks

Provide easily accessible real estate database and document repository (web-based)

STEP3 – Benchmark Current “Pay Rate” to Market

“Pay Rate” is contract lease rent plus accumulated operating expenses and utility costs

Benchmark Analysis – How does each location’s current rent (adjusted) compare to the current market?

Analyze landlord operating expense bills (including utilities and reconciliation statements) and compare to market

STEP 4 – Review Business Objectives and Initiatives that Impact Your Facility Requirements

Identify core and non-core locations

Identify consolidation, expansion and contraction (rooftop reduction) opportunities

Review business acquisitions and planned dispositions

Blend and extend opportunities based on market conditions

Benchmark and performance review – KPI’s vs. your industry peer group information

STEP 5 – Evaluate Space Efficiency and Utilization

Review headcount and capacity information for each facility

Measure headcount per square foot vs. industry standards

Space design – develop space and density improvement strategies (i.e. layout and furniture standards)

Financial and strategic impact of each project

STEP Address and Minimize Cost Impacts of New Lease Accounting Standards (FASB/IASB)

How will your existing locations and obligations be impacted by new FASB / IASB accounting guidelines?

Planning for balance sheet impact of new (and renewal) real estate transactions


Provide a Summary of Your Real Estate Portfolio Information and Recommendations for a “Savings Roadmap

Please contact MCREA if you would like our team to perform a comprehensive diagnostic review of your leased and owned real estate locations. A written report, the Portfolio Diagnostic Review, will accompany our results and recommendations and will include a detailed “Savings Roadmap”, which will identify and quantify savings opportunities within the portfolio

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McGowan Corporate Real Estate Advisors