Cutting corporate real estate expenses can benefit your bottom line and create a better working environment.
Although companies recognize the value of real estate, those costs are often one of the largest items on the balance sheet. Corporate real estate leaders are tasked with bringing the most value to the company while also controlling costs. Here are some ways you can cut your corporate real estate expenses (and as a bonus, most will also increase your ROI on real estate!):
1. Relinquish your lease or sell a building
Lease or mortgage costs are most likely the biggest corporate real estate costs you incurr, so on paper, this is the easiest way to cut costs.
Of course, in real life, moving—to a smaller space in your current building or to a new building altogether—is not easy. Lease renewals come up and they are renewed, even if the company knows they’re only using 50-60% of the space. To break this cycle, pay attention to your lease termination dates. Your opportunity to make strong business decisions, in most cases, is about 12-18 months from that date.
Using space planning software will help you identify how your space is being used or unused. If it includes utilization functionality, like Serraview's workspace utilization software, it will also tell you when and how your space is being used. Both can also help you make better plans and decisions faster. With the right software and data, the decision cycle can be streamlined, saving time with the relocation.
2. Review and renegotiate your lease options
If you decide to stay put, you can still negotiate for better rates or value-adds to your current space. Again, you need to pay attention to your termination dates and start this process early. Read your lease closely to understand all the available options and make sure you have strong understanding of your needs and usage. This is also an opportunity to rethink the utilization metrics you’re tracking.
3. Audit your utilities regularly
You might be surprised to learn how long your HVAC system runs when very few people are in the office. Pay attention to your employees’ patterns and habits—which may change seasonally—and adjust your utilities systems. Depending on the size of your company and your current corporatel real estate expenses, this can translate to six-figure savings or more annually.
4. Reuse and recycle
When you’re redesigning your office layout, look for furniture vendors who purchase used or recycled desks and cubicles for repurposing. You can purchase recycled materials, especially if you need to reconfigure one floor, but are planning a bigger move in the next year.
Using recycled furniture or decreasing your utilities usage can have a bonus benefit of highlighting your sustainable practices. Both employees and clients or customers will appreciate your efforts.
5. Coordinate with other departments
When you cut corporate real estate expenses, be aware of how that might affect other departments. By shrinking your footprint and allowing people to work remotely, you save on your real estate costs while increasing spend in another department, such as IT. If you work together on moves and policy changes, you can find creative ways to save money.
6. Look for potential multi-use spaces
Maybe you know that overall, you’re only using 50-60% of your building, but it seems like the conference rooms are always booked and people are clamoring for more space. Can you instead use the space you have in different ways? Maybe you can make it easier for people to have meetings in the cafeteria or lobby by adding some new furniture.
Add Value by Reducing Corporate Real Estate Expenses
Cutting corporate real estate expenses no longer has to mean sacrificing a nice, well-provisioned office. Slashing expenditures instead can free up funds for offices that function better and make it easier for employees to get their work done.