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.

	Brokers	Architects	Attorneys	Landlords	Contractors	CFO
Food Chain	Landlords	Reputation & referrals	Book of clients	Lender	Architect	Board of Directors
Strength	Deal making	Leverage over contractors, design	Document deal points	Increasing portfolio valuation	Complimenting architect	Driving the bottom line
Weakness	Occupancy issues	Designs that work (end user defined)	Simplifying deal	Paying attention to tenants	Commissioning	All things FM
Leverage	Who the know	Submittals, acceptance of work	Pre-negotiated Terms & Conditions	Access to capital	Project Management	Authority
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	WYSIWYG
KPI	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.