Sunday, October 21, 2007

Understanding Roles and Needs Key to Successful Real Estate Strategy

FM’s are often uniquely placed and uniquely challenged when it comes to RE strategy and tactics. We are on the inside and know our organization and its needs and culture. We know our own strengths and weaknesses, how accurate corporate planning tends to be, etc. And as FM’s we are expected to translate what we know into forward looking strategy and tight execution tactics. Many FM’s, however, are not that well versed in the RE arena. If you have “grown up” in the profession on the services or maintenance side and not the RE side of the profession, then you may feel a bit uncomfortable when given this task.

Understanding who the players in the game are and what motivates each, what they need, their strengths and weaknesses is a first critical step a successful RE transaction. This knowledge allows you to leverage individual strengths so that team results can be maximized. For example, strong alliances with brokers who have strong business acumen will increase your effectiveness in the strategy domain, especially if RE and/or finance are not your strong suits. One mistake too many FM’s make is shopping for a broker with the lowest commission on a specific transaction, instead of forming a strategic alliance with the broker who has the best business knowledge and market intelligence.

But the issue of role definition and selection applies to all RE participants, not just the brokers. Here is a good cheat sheet that provides an overview of RE project principals.







Food Chain


Reputation & referrals

Book of clients



Board of Directors


Deal making

Leverage over contractors, design

Document deal points

Increasing portfolio valuation

Complimenting architect

Driving the bottom line


Occupancy issues

Designs that work (end user defined)

Simplifying deal

Paying attention to tenants


All things FM


Who the know

Submittals, acceptance of work

Pre-negotiated Terms & Conditions

Access to capital

Project Management


Key Person Profile

Young lion, Harvard MBA

Firm principal or star associate

Seasoned partner, top regional player

Local principal with roots

Firm’s star associate



Sq. Ft. leased

Cover of Architectural Digest

Number of high profile deals

NOI, asset leverage

Annual volume

Bottom line

While the table is obviously not literally correct for every individual or firm, it is a good guideline that holds true more often than not. Which is simply another way of stating the age old truth…. Choose your partners wisely.

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