Create a Strategic Real Estate Plan

There are many strategies that a high growth company can employ to best manage the risks and maximize the returns from its real estate holdings.

As one of its key tactics, the company should prepare a strategic real estate plan that reflects current and future real estate needs based upon its anticipated growth. This plan should be developed in coordination with the company’s enterprise-level strategic plan and encompass the views of the company’s leadership. It should include how the company’s occupancy costs currently impact its overall budget and the stated objectives the company might have to minimize those costs.

If the company determines that the reduction of occupancy costs is a strategic objective, then the plan should outline the possible approaches for achieving that goal. These could include reducing the amount of required space, relocating to less expensive neighboring jurisdictions (i.e., move from the city to the suburbs), employing innovative design tactics to use its space more effectively and efficiently and enhancing the use of technology for its core business operations (such as by transforming the company’s offices to paperless environments, resulting in a dramatic reduction in required filing space).

The plan should also contemplate the company’s ultimate exit strategy as a general matter and specifically for particular geographic areas or business divisions. Future planning about how the company plans to implement its macro or micro exit strategies should be tied to the company’s approach to its real estate. The company’s strategic real estate plan should aim to enhance the company’s existing operations, accommodate its future plans and at all times enable the company to closely manage its occupancy costs.

Has your high growth company prepared a strategic real estate plan? If so, what components does it include beyond those described in this post?

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