By Jeff Revoy
Chief Operations Officer
Commercial real estate (CRE) costs are on the rise, making it more important than ever for businesses to maximize the space they have and consider expansion carefully if there’s a need to grow. As the facilities manager, you’re juggling a lot of variables, including predicting the market when forecasting your needs. The growing resources available in CRE analytics can help.
Real estate is a quickly growing tech sector. Tech solutions allow you to compile real estate analytics data and use it to drive strategic decisions. You’re the expert on what you have, how you plan to grow, and what you’ll need. Plan for your future and gain a competitive edge by using CRE analytics to predict the scope of your business’ real estate needs.
Real estate data you can use
You already have the data you need to start analyzing your commercial real estate picture, though may be housed in different systems. The hard part can be compiling all that data in one place to paint a complete picture of what then use it to diagnose what your company needs. SpaceIQ takes CRE data out of silos with real estate forecasting software, bringing it together in a central place for optimal review.
The SpaceIQ dashboard helps facilities managers better identify trends and opportunities specific to their real estate usage. Here are some types of real estate data that show how you’re utilizing the space you have:
- Lease cost and term: The amount of money paid (cost) over a specified time period (term). Use this information to determine net profit at one location or over all holdings; anticipate when rent may rise and when you’ll want to renegotiate your lease; and plan for future real estate purchases.
- Square footage occupied: The total square footage of the building occupied by the tenant. This helps you determine how efficiently you’re using the space your company is paying for. Is there more available space in the building not part of your lease? Is there space not being utilized? Will you need more space in the future?
- Occupancy capacity: The maximum number of persons a building was designed to hold. When planning for the future, how many staff desks can you add before needing to expand? Will you need to reconfigure office space to maximize efficiency?
- Location productivity: Revenue generated at that particular office location. Location productivity allows you to compare how well one location is doing versus another. The downtown location may cost more in rent, but are more products sold there compared to a suburban branch? It can also show if you’re paying too much rent at one location or help guide decisions about repairs or upgrades at a particular building.
- Total real estate portfolio: Real estate investments at all branches or locations your company owns. A complete picture of your real estate holdings can help you decide whether to add more or downsize, and what returns you’re making overall on your CRE investments.
Common real estate struggles companies face
Rising real estate costs are a worthy concern for facilities managers, but also compound other real estate struggles. Knowledge is the best tool to conquer common issues that might arise, including:
- Rising lease costs burdening your balance sheet: As lease costs rise, workplace productivity must increase to justify the charges. Planning for increased real estate costs means more pressure on facilities management to keep outlays down elsewhere, and pressure on other teams to make up the difference. Understanding your lease terms can help you plan for rising expenditures.
- Cramped occupancy prohibiting growth: Playing musical chairs with desks, conference rooms and team areas is disruptive and takes precious time away from important work. If the company is growing rapidly—whether with new staff or new products—you need as much lead-time as possible to plan for changes. It’s important to always be aware of occupancy capacity as other departments plan their growth.
- Location, location, location (isn’t working): Location productivity isn’t just about the cost of the building, but also the potential revenue it’s bringing in. You might discover the more expensive locations are generating the most revenue, while the cheaper, less desirable locations are seeing higher employee turnover.
- Unable to try new configurations without disruption: You think that moving the finance team to the second floor and opening up the conference space on the third will solve your problem—but how will you know until you try it? Testing new configurations can waste time, disrupt work, and potentially damage furniture. The answer: plan office configurations virtually with space planning software first to minimize disorder.
- Difficult to gauge total cost center: You can pull up the numbers you need (lease, revenue, occupancy, space utilization), but some of this information changes rapidly. Looking at all these numbers together in order to determine total cost center requires constantly reconciling numbers to assess the current situation and plan for the future.
If you experience any of these problems, know they’re not unique to your company. By improving real estate data collection and analytics, your business can run more smoothly and get ahead of the competition.
How SpaceIQ can help
Ready to get real CRE data working for you? An integrated workplace management system (IWMS) brings critical real estate data all together in a place where it can be easily understood. IWMS software from SpaceIQ can help optimize your workplace resources, real estate portfolio, and facilities assets.
With software specifically designed to meet commercial real estate needs, SpaceIQ is your partner in effectively planning strategies with data-driven decisions.
- Lease costs and terms are readily available in one place, and you can anticipate rising costs or increased return on investment.
- Knowing occupancy capacity, you can work with departments to plan for changing needs. If a particular location isn’t productive, you’ll have all of the factors necessary in one report to make an argument regarding its future.
- IWMS software can help test new layouts before moving desks and chairs.
- You’ll see the big picture regarding your company’s real estate total cost center.
SpaceIQ software provides both aggregated real estate data and granular insights for recognizing opportunities and inefficiencies.SpaceIQ can help compile the real estate data you need, make it easy to interpret, and present it in ways others can understand. Quick access to CRE analytics allows you to focus on growing your business, and staying ahead of the competition.