Who Manages Your Real Estate?
In 1993 I was working for Marcus and Millichap Corporate Real Estate Advisors. Our mission was to provide support for companies who had in-house real estate departments, but lacked the personnel to handle the growing workload. Armed with knowledge of how major corporations manage their real estate we served as the out-source assisting them on projects as needed. It didn’t take me long to realize the people who really needed help were the smaller firms, or for that matter any firm, that didn’t have a full time real estate department.
Most companies seemed to do a little planning. They hired a broker to find space and negotiate a few deal points and then they were left on their own to deal with issues after the transaction was completed. On the other hand, full time in-house real estate departments carefully plan their present and future real estate needs, oversee all aspects of the transaction and more importantly, deal with any issues that came up during the term of the lease ranging from landlord compliance to dealing with matters coming out of landlord notices.
In 1993 I approached Lou Masotti, the head of the Real Estate Section of the UCI Graduate School of Management, with the idea of putting together a study on how companies in Orange County, CA managed their real estate. The findings were conclusive. Most firms assigned their real estate supervision to someone who had little or no real estate background or someone with a bit of knowledge but many other corporate responsibilities. Neither one was a good plan considering real estate represents the number two item on any companies expense side.
The survey confirmed what we all suspected. Attached is a copy of that survey. Here it is, 2014. Not much has changed. What are you doing to manage your real estate issues and costs?