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In the last four to six years the commercial office real estate sector has been challenged by a number of factors including a decline in occupancy, aggressive cap rates, and lower rental rates. As a result, most commercial office real estate companies have maintained steady state operating models and conducted capital recycling programs.
More recently, with improving market and economic conditions, we have seen operators actively evaluating expansion opportunities. As part of this, there has been a shift in operating models to centralize more functions to enhance operational expense (efficiency) to offset the declines in base property revenue. Property and lease accounting functions continue to be moved from the property to a regional structure and in some case an enterprise shared service model. As a result, commercial office real estate companies have developed a higher dependency on technology as a foundation to support variable operating models and as a means to achieve significant operating synergies in areas such as lease accounting, accounts receivable, collections, accounts payable, purchasing and leasing.
More recently building controls and historical engineering systems are providing integration in ways that are dramatically changing property and engineering staffing models. The net effect of these trends is that commercial office properties are evolving into true operating companies.
RealFoundations not only understands these trends but has helped many commercial office real estate companies realize the benefits from them. RealFoundations recognizes that technology itself is only an enabler to the creation of specific and unique solutions, which increase the quality of services your company provides in the marketplace in a cost effective manner. RealFoundations helps our clients navigate this landscape by leveraging our market visibility and experience working with the leading real estate companies.
Identify Opportunities: The Goal
The goal for every commercial office organization is to identify unique ways to differentiate your organization to your tenants, investors and employees. With that in mind, RealFoundations provides custom solutions to unique problems that will help your organization achieve its goals.
Identifying Challenges and Trends: The Benefits
The market conditions over the last few years have forced all commercial office real estate companies to be prudent in their use of capital. We believe the evaluation criteria deployed in the acquisition or disposition of assets should also be applied to internal projects that affect your systems and operations. RealFoundations assists companies in identifying those areas where “real” sustainable value can be achieved in areas that are important to your organization.