Just as the economic landscape, technology, and nearly everything else has evolved over the years, so, too, has the role of a corporate real estate director. In order for CRE directors and brokers to stay ahead in the market, they must adapt and elevate their decision-making processes to become more sophisticated—and often more comprehensive. A big mistake made by a CRE director can impact business for years to come and even “bury” the business. That’s why more detailed, strategic thought is required for key real estate decisions.
Typically, a CRE director’s main focus has always been to get the best deal from a rental rate standpoint, and that was about it. Now it’s crucial that they also take other factors into consideration, widening their decision-making process to include things like employee retention and recruitment, workforce demographics, tax incentives, and competitor analysis.
The more equipped the director and his/her team is with sophisticated information and metrics, the more likely they are to make better business decisions. In some cases, the more sophisticated and best choice would have seemed like the most unlikely one just a few years ago. It’s increasingly common now for a CRE director to choose to lease a space that is more expensive but has a better value due to the information gathered throughout the entire evaluation process.
What does this mean for brokers?
As brokers, we need to have a basic understanding of the CRE director’s business, so we can make the most informed decision with regard to value and total cost of ownership—not just which property is cheapest. Although many CRE service providers are still focused on rental rate reductions, it is beneficial for brokers to take a more holistic approach when presenting a director with valid options. It is key to understand the big picture.
As one CRE director recently told me, “I need a consultant—someone who understands all the inputs that lead to the most valuable solution. Rates are just one, often less important contributing factor.”
When brokers are able to see the big picture, they bring more value to the client—and to their firm.
Blake Anderson, managing director and principal at Cassidy Turley, oversees the firm’s industrial services group in the Dallas-Fort Worth area.
