SPP Community Session-

Strategy and Portfolio Planning for Corporate Real Estate

SPP Goals Past Activities Next Steps

Gathering Best Practices

• Survey end users• Started detailed interviews

• Interview selected survey respondents

• Summarize survey results & interview data

Sharing Best Practices

• Distribute survey results• Atlanta Summit Panel Discussion

• Webinars on Strategic Planning Activities

Advancing Best Practices

• Analyze survey and interview results

Benchmarking Strategic PlanningActivities and Next Steps

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SPP Benchmarking Study

A simple question: What are CoreNet End-Users doing in their strategic spaces?

Starting Point

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SPP Benchmarking Study

Design a survey• Corporate Info:

• Portfolio size & complexity• CRE department size• Data accessibility

• Strategic Plan Info: • Scope / Composition / Time Horizons • Accountability / Approvals• Corporate Alignment / Driver Metrics

• Success Stories / Challenges• Interviews

Vet survey questions with End-Users and Service Providers before distribution

Multiple iterations until survey is finalized

Baseline Portfolio Complexity

Staffing, and Data

Baseline PlanningPractices

Correlational Analysis

Case StudiesSuccesses & Challenges

End-User Interviews

Step One

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SPP Benchmarking StudyStep Four

Follow-up with In-Depth Interviews• Standardized Interview Format / Obtain Comparative Qualitative Data

• Obtain details on look and feel of strategic plan• Confirm metrics and goals• Delineate management approval / interaction process• Obtain success stories / understand challenges• “How to Succeed” knowledge delivery via Webinars

Five Interviews done to dateGoal: 15-35 interviews

2012 Goal: Webinar Presentations to roll-out results

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SPP Benchmarking StudyStep Two

Distribute Zoomerang Surveys• Chapter / Group Participation:

• New York• No. California• Chicago• SPP End Users• Atlanta• Carolinas

Excellent participation: 76 End Users

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SPP Benchmarking StudyStep Three

Preliminary Results

0-5

Portfolio SF(Millions)

5-20

20-50

50+

25-100

<25>700

300-700

100-300

Portfolio Locations(No. of Sites)

Corporate End-Users deal with complex portfolios

29%

16%

9%18%

24%

63% have more than 100 locations 47% have more than 5 million SF

23%

16%

45%8%

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Responsibility and Approval

• Responsibility for strategic plans differs by organization.• Less than 50% of organizations require formal approval by business line

management or senior staff external to CRE.

Is your real estate strategy document formally approved by senior management?

For internal guidance and planning only

Busines line management

Senior management external to CRE

CRE senior management

0% 10% 20% 30%

What group is responsible for real estate strategic planning?

Other

Transaction Managers

Customer Relationship Management

Strategic Planners

Vice President

0% 10% 20% 30% 40%

Other category does not include service providers or space planners.

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Strategic Planning Drivers

• Business alignment is the primary driver for 60% of respondents• Cost reduction is the primary goal for 32% of respondents. • Only 42% of plans have explicit cost saving targets

What is the primary driver for your real estate strategy?

Does the approved strategic plan have established cost savings targets?

Other

Portfolio Risk

Portfolio Flexibility

Cost Reduction

Business Alignment

0% 20% 40% 60%Target > 15%

Target 10-15%

Target 5-10%

Target 0-5%

No savings target

0% 20% 40% 60%

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Strategic Planning Metrics

• 72% consider real estate cost per person a primary driver. • Less than half compare real estate cost to enterprise revenues or costs• 43% of respondents are including sustainability metrics in their plans

Which metrics are the primary drivers for CRE strategy / performance?

Are sustainability metrics part of your organization's real estate strategic plan?

Other

$ / SF

SF / Person

$ / Person

$ / Revenue

0% 20% 40% 60% 80%

No

Yes

0% 20% 40% 60%

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Long-Term Plans and Documention• Just over 60% have written plan that includes more than performance goals

and guiding principles.• The largest share of respondents complete plans for 3-5 years.

Do you have a written plan that includes more than annual performance goals and guiding principles?

No

Yes

0% 20% 40% 60% 80%

If you have a written plan that includes more than annual performance goals and guiding principles, what is the number of years for the planning horizon?

Plan for >5 yearsPlan for 3-5 yearsPlan for 1-3 years

Plan for 1 year

0% 10% 20% 30%

Percentages are share of total resondents

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Data Challenges

• Most respondents have access to basic real estate data.• More than half have headcount forecasts that are directionally accurate for

1-3 years. Is that sufficient for planning?

What information is tracked by CRE? Do you have access to directionally accurate ( + / - 20%) headcount projections? If yes, for how many years?

Critical DatesOperating Expenses

RentVacancy

Space TypeHeadcount

SeatsSF

0% 20% 40% 60% 80% 100%

For > 5 years

For 3-5 years

For 1-3 years

No

0% 20% 40% 60% 80%

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Round Table Discussions

• Current research task forces

- Discussion of current activities

• Other topics

– What are your challenges?

– Best practices - what resources have you found most beneficial?

– What could be next steps for this topic?