archibus white paper - the federal real property reduction goal

ARCHIBUS White Paper:The Federal Real Property Reduction Goal:

Ensuring Successful Space/Cost Rationalization

Over 4 million users prove it daily—saving their organizations over $100 billion annually.The #1 Solution for Real Estate, Infrastructure, and Facilities Management in the World

Over 4 million users prove it daily—saving their organizations over $100 billion annually.


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The Federal Real Property Reduction Goal: Ensuring Successful Space/Cost Rationalization

Background: Presidential Memorandum “For decades, the Federal Government, the largest property owner and energy user in the United States, has managed more real estate than necessary to effectively support its programs and missions.

“Both taxpayer dollars and energy resources are being wasted to maintain these excess assets. In addition, many of the properties necessary for the Government’s work are not operated efficiently, resulting in wasted funds and excessive greenhouse gas pollution.”

That declaration in a recent presidential memorandum established a goal for federal agencies to accelerate their efforts to consolidate underutilized space and eliminate unnecessary facilities, managing the remaining properties in a more economical and sustainable manner.

With its 1.2 million buildings, making it the nation’s largest owner/renter of property, the federal government has not been as mindful as the private sector in rationalizing real estate acquisition/allocation/disposal strategies – a task made much easier with the aid of Integrated Workplace Management System (IWMS) software technology.

According to a recent Federal Times article, federal agencies are holding on to more than 20,000 excess assets — from office buildings and labs to data centers, warehouses and runways — that could be sold to generate additional revenue. Furthermore, agencies have identified more than 65,000 properties that are partially or completely vacant but have not been deemed excess, which would allow them to be sold. The properties are valued at more than $1.2 billion.

To cite one example of asset excess, federal government agencies have experienced a substantial increase in the number of energy-intensive data centers, leading to increased energy consumption, real property expenditures, as well as operations and maintenance costs. This is in stark contrast to other public and private organizations who, over the last decade, have been using IWMS and other technology options to manage existing space more efficiently, consolidate multiple data centers, and even outsource the function to firms that host the IT operations of multiple organizations.

Because of the minimal savings that were produced by past attempts at reducing federal real property costs, the new presidential directive’s emphasis on redoubling those efforts and making more efficient use of existing assets is both understandable and overdue.

Up to 50% of Office Space WastedBased on industry studies, many organizations, both public and private sector alike, have been found to underuse office space by 50% or more. Furthermore, associated facility overhead costs – operations, maintenance, HVAC, furniture/equipment, etc. -- represent more than 25% of fixed assets on balance sheets and can be reduced 5% to 20% per year by using IWMS software. Among its many capabilities, IWMS software can compile centralized, accurate data on space and its allocation so that underutilization of offices and buildings, whether leased or owned, and can be easily identified and consolidated for more economical operations.

The #1 Solution for Real Estate, Infrastructure, and Facilities Management in the World2

The Federal Real Property Reduction Goal


That is why federal agencies have been directed to pursue a comprehensive range of prescribed initiatives to:

• Accelerate Efforts to Identify & Eliminate Excess Properties

• Take Immediate Steps to Make Better Use of Remaining Property Assets, Measured by;

— Utilization & Occupancy

— Annual Operating Costs

— Energy Efficiency

— Sustainability

• Accelerate Cycle Times For:

— Identifying Excess Assets

— Disposal of Surplus Assets

— Eliminating Lease Arrangements

— Pursue Consolidation of:

— Data Centers

— Office Space

— Warehouses

— Laboratories

— Increase Occupancy Rates in Current Facilities Using Innovative Approaches for:

— Space Management

— Alternative Workplace Arrangements

— Telework

— Identify Offsetting Reductions in Inventory on New Space Acquisition

Billions in Savings, Fast ROIThere are hundreds of examples of great savings being realized with Commercial-Off-the-Shelf (COTS) IWMS. For example, a multi-national organization, with a presence in 50 countries across five continents and a portfolio of 7,500 buildings, reported that it was able to realize a savings of over $1 billion in less than two years utilizing IWMS. The organization was able to embrace a business transformation that included real estate consolidations, the empowerment of its associates and contractors, more effective space utilization, and tremendous energy and utility savings. With the monies saved, they were able to build a new award-winning, environmentally-friendly headquarters, and productivity sky-rocketed.

Similarly, a state government saved millions in the first year of an IWMS-centered space management and consolidation initiative, allowing it to cancel 50 leases on properties representing 220,000 square feet of office and other space. Projected savings of $100 million were identified, on lease, energy and utility costs, as well as staff time, and they achieved significant reductions in their carbon footprint.

The #1 Solution for Real Estate, Infrastructure, and Facilities Management in the World Over 4 million users prove it daily—saving their organizations over $100 billion annually.


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Real Property Portfolio Solutions Aid in Eliminating Asset Excess ARCHIBUS provides a robust solution for comprehensive real property portfolio management, with extensive capabilities that enable you to:

Align Real Estate Plans with Business PlansReview current and upcoming vacancies to better plan leasing options and opportunities. Whether it is time to expand, sell, or terminate leases, the application provides important information such as property vacancies and accurate space measurements. Calculate standards across multiple properties, such as cost per occupant or cost per square foot or meter. The figures are derived from a consistent summary source, making it easy to compare these various criteria. The Real Property & Lease Management application gives you the power to leverage this information when negotiating leases or purchase prices.

• Limit risk by using automated ticklers to warn when lease options expire, activities are due, or tenant leases are expiring

• Provide detailed property abstract reports and statistical summaries

• Negotiate contracts using cost history reports based on maintenance and management expenses

• Locate vacant suites at a glance for future tenants

Monitor Property Costs and ConditionsAccount for all costs associated with property management and justify new expenditures. For example, you can determine projected operating costs for each owned or leased property, including any property taxes. Chargeback features let you charge departments or other entities for their proportionate share of a tax bill, based on the amount of space they occupy. Closely monitor taxes by incorporating a tax budget and projection plan with tickler reports to remind you of assessments and tax payment dates.

• Ensure regulatory compliance by tracking and maintaining a record of requirements,and recording compliance issues to avoid financial penalties

• Record property tax expenses and prepare budgets for future tax payments

• Evaluate the profitability of your properties and overall financial portfolio

• Record and analyze trends of any given property for making future business decisions

• Document all lease-related costs and charge them to the appropriate departments or tenants

• Call up a general overview of all your properties, and highlight details on outstanding issues

• Track total holdings across regional and/or national boundaries, organizing properties by geographical area

• Seamlessly track depreciation of property assets with the integrated ARCHIBUS Furniture & Equipment Management application




Left: Better align real estate strategies and business plans with streamlined access to your space and cost information.

Right: The ARCHIBUS Real Property & Lease Management application lets renters, lessors and owners record, manage, and analyze detailed real estate and lease information, allowing each party to quickly evaluate

opportunities and limit risk.

• Accelerate property return-on-investment by optimizing space utilization

• Improve performance of leased and owned properties through financial and operational benchmarking

• Generate summary reports to forecast opportunities and identify investment risks

• Maximize leasing or selling potential by comparing the market value of your properties

Manage an entire real estate portfolio by incorporating dashboards, maps and other aids that let you view and fine-tune performance by tracking key metrics.

Space Management Solutions Carefully Monitor Utilization Adding space to meet your organization’s needs is not always an option. But with the power and flexibility of ARCHIBUS Space Management, you can improve space efficiency and evaluate the true costs associated with space usage. You will also be better equipped to respond to daily requests from managers who question how each square foot or meter of space is being allotted—from the finance department that needs detailed chargeback information to government agencies who require specific reports in order to grant reimbursement. With ARCHIBUS Space Management you can easily satisfy all of these needs and better



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plan for current and future space needs across your organization.

• Facilitates improved space efficiency to lower occupancy costs

• Links architectural drawings with facilities and infrastructure data, ensuring information is always accurate

• Analyzes space inventory information by department

• Generates space inventories with gross area, rooms, service areas, vertical penetrations, and more

• Creates trial layouts to compare space efficiencies of various relocation or layout scenarios

Visualize, analyze and allocate the use of space for optimal cost-effectiveness and organizational efficiency.

Eliminate Space Allocation DisputesAccurately determine the usable area allocated to each department. Create benchmarks that determine the amount and type of space required for each employee or department function. Using objective methods to assign space helps mitigate staff concerns about their allotted space. Develop occupancy plans and quickly locate vacant space for new hires, as well.

• Prepare occupancy plans, average area per employee reports, and employee rosters by site and building

• Add employee designator symbols to drawings using population features

• Share facilities and infrastructure information with non-ARCHIBUS users in your organization

• Determine space efficiency based on industry standards

• Charge departments for the areas they occupy, plus their share of common areas

Satisfy Reporting Requirements: Meet Guidelines for Improved Space UtilizationEasy access to accurate square footage/square meters and usage information makes it simple to satisfy external reporting requirements. If your organization relies on third-party funding or reimbursement, the difference between estimated and actual information can translate into recovery of thousands (or even millions) of dollars. Plus, the application’s chargeback functionality ensures that each department within the organization is held accountable for its space usage and is appropriately billed.




• Calculate room percentage for recording partial or seasonal facility usage

• Provide summaries of each department’s area with Departmental Room Analysis reports

Plan Alternative Workplace Strategies: Telework ManagementLegislative and administrative mandates to reduce the federal property portfolio are being accompanied by alternative workplace programs such as telework, so employees can work from home or at satellite offices closer to home. These programs help minimize the need for office space while achieving desired flexible workspace, employee satisfaction, and environmental sustainability objectives.

For telework programs to succeed, however, one or more real estate and facilities management software applications – Space Management, Hoteling, Move Management, Room Reservations, Telecommunications and Cable Management, GIS, and others – may be needed. They support teleworking programs with decision support tools to improve cost-efficient real estate portfolio sizing and the allocation of remaining space for full-time and contract onsite workers, as well as for mobile and home-based workers who may periodically require shared onsite work/meeting space.

Telework-related software’s bottom line benefits include:

• Optimization of space usage by supporting part-time office assignments

• Automation of chargebacks for efficient allocation of shared space costs across departments

• Accurate identification and reservation of space for flexible time frames—days, months, or years

• Integration of move management activities to efficiently manage rapid growth, mergers, and consolidations

Use Space More EfficientlyThe ARCHIBUS Hoteling application, for example, enables organizations that are plagued by space constraints to optimize their space usage by taking advantage of temporary and part-time office assignments. These assignments or schedules may be on demand or based on changing needs.

• Book a single room for an individual employee or a number of rooms for a department

• Use search parameters to find appropriate available rooms to satisfy specific employee needs

• Specify which employees and/or departments will occupy certain rooms

Track Time-Based Ownership and ChargesEliminate the frustration of seeing booked space go unused. Chargeback features promote accountability among employees and departments. With Hoteling, you can schedule appropriate space for temporary or part-time employees and charge for it. Time-based ownership assignments are easily tracked, allowing you to forecast future space requirements and budget accordingly. Key capabilities let you:

• Reserve space for a duration of days, months or years

• Schedule amenities, such as desks, chairs, and information technology for the employee who will be temporarily working in an office space



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• Calculate accurate chargebacks based on space usage

Manage Growth and ConsolidationHoteling is an effective method for scheduling people in temporary space, along with required amenities, for a limited time. Employees can be temporarily scheduled into available space during periods of fast growth, mergers, or consolidations, yet easily moved when permanent space becomes available. Equipment can be moved into a room for a specified period of time. This gives you the flexibility to perform relocations according to project requirements. Throughout the entire process, space chargeback information can be retained.

• Strategically plan for future space acquisitions or divestments

• Ensure that furniture, equipment, and supplies are always available during relocations

• Assign costs based on equipment usage

Energy and Sustainability Management SolutionsThe ARCHIBUS Energy Management application correlates portfolio information in a unique way, maps current energy usage, projects “what-ifs” on different remediation scenarios, and measures the year-to-year effectiveness of your changes according to objective benchmarks. Agencies are facing high energy costs and new sustainability mandates such as EO13514 and other legislation.

ARCHIBUS developed a solution that provides degree-day features for normalizing fluctuations in weather, energy-specific audits for finding errors in complex energy bills, what-if analyses to examine potential costs of energy increases or savings due to conservation, renovation, co-generation or demand-response agreements. It addition, the application provides the ability to map energy data to buildings – matching energy use with your strategic master plan – and to your lines of business to match the energy spend against your business plan.

• Quickly provide accurate energy information to make informed choices concerning remediation programs

• Objectively measure all energy inputs and outputs

• Correlate portfolio information, such as spaces and leases, with energy, weather, billing, and building operations data




Monitoring key energy use metrics can help you achieve measurable savings of from $.10 to $.20 per square foot.

ARCHIBUS Energy Management ROI Typically, customers achieve measureable savings of $.10 to $.20 cents per sq. ft., through a combination of billing, rate negotiations and targeted operations-driven modifications rather than capital-driven remedial actions.

• Measure actual consumption reductions

• Find and reduce billing errors

• Tune your energy management plan to the overall business strategy

• Anticipate the impact of energy price fluctuations

• Track historical trends and measure normalized consumption reductions

• Be prepared to negotiate rate plans

• Pinpoint problem buildings for remedial action

• Tune your energy management plan to the overall strategic real estate plan that supports the business

Integrating ARCHIBUS Energy Management with Other ApplicationsARCHIBUS Energy Management data, and related weather information, can be correlated with portfolio/lease, space, billing, and building operations data in a unique way. With this information, you can measure, benchmark, and reduce your total energy consumption and costs.

Use the data and results from Energy Management immediately, without translation or re-entry, in these other real estate management activities:

• Lease Management: Verify you are not paying for energy or other costs related to vacated leases, plus add rent, option, and expirations to the costs you can manage effectively.



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• Cost Administration: Expand your cost management activity to energy and other high-value components – such as rent, security, housekeeping, and maintenance – to compare costs and profitability of each property and building.

• Cost Chargeback & Invoicing: Chargeback energy costs to tenants and lines of business using lease chargeback agreements.

• Portfolio Forecasting: Use the cost forecasting features to project energy and other costs forward and to prorate costs by line of business.

Sustainability ManagementLeading global organizations are realizing the strategic value of environmental sustainability and the social responsibility to conserve resources and reduce waste generation. The ARCHIBUS Environmental Sustainability Assessment application delivers an objective methodology for creating a balance among people, infrastructure, facilities and their effect on the environment.

It helps identify which assets should be repaired, renovated, or replaced to achieve environmental efficiency goals or support other program objectives. Organizations can now establish proactive processes that are both environmentally and economically defensible.




KPIs and Metrics Dashboard SolutionsFinally, ARCHIBUS dashboard technology provides an important decision support tool that aids managers by giving them graphical views of their organization’s space, energy, sustainability, GIS and other data. Its ability to provide real-time snapshots of Key Performance Indicators, for example, helps managers see at a glance the most important information they need to operate more efficiently, on a day-to-day basis, while pursuing their most pressing space and cost reduction goals.

Capture the metrics that help managers see at a glance the most important information they need to operate more efficiently while pursuing cost reduction goals.

Rationalizing Real Estate. Reducing Costs. The mandate to cut government expenditures requires new, innovative technologies and strategies to lower operational costs without compromising services to the public.

Recent presidential admonitions to reduce the number of underutilized, or unnecessary, owned and leased federal properties, for example, is one of the most important initiatives that can be implemented to align property portfolios and uses with business goals and budget realities, in a way that better serves taxpayers.

Today’s sophisticated real estate, infrastructure, and facilities management software provides the tools needed for centralizing accurate date on space allocation, better visualization of space use, analysis of energy consumption patterns to control costs, and many other purposes. Such applications make it possible to accurately determine which holdings should be consolidated/vacated, as well as how to cost-effectively manage those properties worth retaining, refurbishing, and, if necessary, repurposing.

At the same time, this breed of versatile software also offers a means to automate the management of that remaining space more efficiently, as well as enable the implementation of innovative telework and environmental initiatives. Initiatives that increase worker satisfaction and aid government in leading by example to promote sustainability best practices both in the public and private sectors.

Executive and administrative branches of government have clearly identified a rich target of opportunity by demanding greater accountability in the federal government’s real estate acquisition and management practices. With many billions of dollars in savings possible from reducing the number of underutilized holdings, government real estate and facilities managers can now avail themselves of the software tools and management techniques that make such a pressing goal vastly easier—and with a faster payback—than ever before.



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About ARCHIBUS, Inc.ARCHIBUS is the #1 global provider of real estate, infrastructure, and facilities management solutions and services with the total annual expenditures for ARCHIBUS-related products and services exceeding $1.7 Billion (USD). Through effective innovation and business transformation, ARCHIBUS users save their organizations over $100 billion annually. With ARCHIBUS, organizations can use a single, comprehensive, integrated solution to make informed strategic decisions that optimize return-on-investment, lower asset lifecycle costs, and increase enterprise-wide productivity and profitability. ARCHIBUS is the world-wide proponent for the creation of ubiquitous environmental sustainability.

More than 4,000,000 ARCHIBUS enterprise and Web users collectively manage over 5,000,000 properties, with organizations reporting facilities-related cost savings as high as 34%. With over 1,600 ARCHIBUS Business Partners, local and regional support worldwide is available in over 130 countries and in over two dozen languages. Headquartered in Boston, Massachusetts, ARCHIBUS, Inc. has pioneered computer-aided infrastructure and facilities management technologies since 1982. For more information, visit archibus.com.

archibus white paper - the federal real property reduction goal

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