Misalignment is why your real estate portfolio costs more than it should.

Here’s the thing about real estate that most people don’t talk about:  business changes every year but your real estate assets are fixed for 3, 5 or 10+ year increments.  When your business changes but the foundation that supports it doesn’t – that’s where cost enters into the equation.

When you have call centers only in the US but you have customers that demand 24/7 support, that’s higher costs (likewise if your call centers are only in India).  When you dramatically change your product line and your key customers go from being East coast to West coast, that’s cost.

Too many real estate managers throw their hands in the air when this occurs and think that there is nothing that they can do.  After all – the cost of getting out of those remaining 3 years is expensive.  But is it more expensive than staying in them?  You may take a larger one time cost hit to change but you may make it up in 6 months.  Could still be a good investment.

Maybe that strategy of 7 year leases needs to change.  Could be the business needs to trade some cost for higher levels of flexibility.  Could be the culture is fine with moving offices when needed as long as there is a process.  Real estate may not have a lot of flexibility but it has more than people typically think.

This I know – don’t let your real estate limit your business.  You went into business to deliver a product or service, not to hold real estate leases.  Don’t let the real estate keep you from achieving your core mission.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s