What is Corporate Real Estate?
Corporate real estate has developed distinct service categories to meet the real estate needs of business units and organize talent by skill sets. These services often work closely with each other. Portfolio administration continuously interacts with transaction management, facilities management and legal. Facilities management can frequently work with project management and space planning, or assume their functions within the facilities management department.
These services will often report directly to the corporate real estate management or account leaders in CRE service organizations, who can monitor their success with clearly defined key performance indicators or KPIs. While the names of the services may vary by organization, in practice they have similar functions in today's CRE.
Portfolio Administration
Portfolio administration creates, manages, and communicates real estate information accurately and effectively to the entire corporate real estate organization. Referred to as lease administration in some companies, portfolio administrators can have many responsibilities other than managing contractual data. Today's portfolio administrators can also share responsibility for strategic oversight, accounting, legal, and human resources functions in the modern corporation.
Transaction Management
Transaction management's general function is to achieve company objectives through the oversight of real estate events. Rarely is transaction management only responsible for the successful completion of a real estate transaction. Most transaction managers today are tasked with assisting with strategic oversight of the company's real estate portfolio and have a "cradle-to-grave" process for real estate events which involves responsibilities before and after transactions are complete.
Facilities Management
Facilities management has evolved from a property management function to becoming an increasingly important part of a company's success. Today's facilities management professionals are tasked with creating and maintaining environments in which company employees and equipment can thrive. They often track a variety of measurements of company space and how it is being utilized. Such data creates visibility in the organization about how space is being used. It allows the organization to communicate important messages to outside parties about its role as a caretaker of shareholders, employees, society, and the environment.
Project Management
Project management is the oversight of the design, build, furnish, redevelopment, re-furbish, and budgeting for company real estate projects. When corporate real estate needs real estate to be built or altered, a project management team usually is responsible. Project managers are also important resources for the other services. For example, project management can supply improvement costs, project timelines, and other construction related information to help transaction managers negotiate effectively, and facility managers plan for future upgrades.
Space Planning & Design
Space planning and design may be a function under project management or facilities management, but could also be a separate function in some organizations. Space planning can involve many different types of space. While many may think of space planners as designing office and site plans, space planners are also critical in manufacturing and warehouse environments as well.
Legal
Legal departments are typically responsible for the review of contractual agreements and hiring of outside counsels. Whether legal is a part of the real estate organization or a separate entity can have a significant influence on its function. Attorneys in legal departments which are separate from real estate often have responsibilities for documents outside of just real estate related contracts. With the possible exception of space planning, legal services usually interact with all of the other service lines and are a critical part of the overall success of the CRE organization.
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