The History and Future of CRE

How are CRE and FM organizations morphing themselves in order to support global enterprises while increasing their service, financial values, and leaning themselves? One answer can be found in the Integrated Resource and Infrastructure Solutions (IRIS) vision of CRE in the year 2010. Sponsored by CoreNet Global, the CRE 2010 study investigated organizational model and infrastructure trends in the industry. Here is a summary of the evolution the project traced and predicted.

Stage 1 (60’s): CRE groups formed, centralization begins, some out-tasking, few vendors

Stage 2 (80’s): Large CRE departments, some out-tasking, few vendors

Stage 3 (early 90’s): CRE departments downsize, increased out-tasking, many vendors

Stage 4 (mid-90’s): CRE downsizes again, smaller number of preferred vendors

Stage 5 (late 90’s): Small and strategically focused CRE staff, small number of alliance partners
accountable for services on a regional basis, second tier vendors support alliance partners

Stage 6 (early 2000’s): Very small CRE staff, small number of strategic partners, second tier alliance partners

Stage 7 (mid-2000’s): Very small CRE staff, a single strategic partner, vendors support single strategic partner

The evolution has been driven in large measure by mergers, acquisitions, and globalization, resulting in corporate CRE departments in large companies that are no longer the doers as much as they are the strategists. More and more we see regional/global strategic partners adding their value to the strategy mix as they leverage their advantages of scale.

If you are wondering how your organization needs to evolve in order to increase its value and remain competitive and relevant, then check yourself against the pathway outlined above. Most global and many large domestic CRE/FM organizations today are in Stage 6. And, you don’t have to be one of the big guys either. As the trends continue the trickle down affects will offer advantages to mid-tier organizations as well.

If you would like to read more about the CoRE 2010 project and how CRE practitioners are putting the concepts to work in real life, see the FM Link article at http://www.fmlink.com/ProfResources/Magazines/article.cgi?Corporate%20Real%20Estate%20Leader:corenet020507.html