Maximize Portfolio Value: Leverage CRE Data for Right-Sizing

In the post-pandemic world of corporate real estate (CRE), decision makers need to be collecting robust CRE data and using it to right-size their real estate portfolio.

This article explores CRE data, including how and why it can dramatically improve real estate optimization for companies of all sizes, with insights from OfficeSpace Senior Product Manager Kathleen Williams.

What is CRE data, and who needs it?

CRE data refers to all the data points collected for the physical workplace, including both lease and usage data (sometimes referred to as workplace data).

• ​Lease data: Lease agreements, notes, images, dates, and related documentation.
• ​Usage data: Information on all the different ways the commercial property is being used by the people in it.

Companies have always tracked lease and transaction data to stay on top of their real estate investments. Increasingly, companies are collecting usage data to gain better insight into how their workplaces support the people who use them and contribute to long-term business goals.

Facility managers (FMs) and real estate professionals often rely on workplace reports and analytics to view expected growth trajectories of sites, floors, and departments over time, helping to pinpoint when they’ll reach max capacity.

Space utilization and decision making

Critical metrics include:

• ​Cost per employee
• ​Occupancy rate
• ​Operational costs

Examples of how space utilization data can help with decision making:

• ​Knowing cost per usage helps determine if employee attendance justifies lease cost
• ​Knowing actual usage versus full potential helps determine if consolidation, subleasing, or expansion is needed
• ​Knowing office density helps determine if more efficiency can be achieved

With real-time and historic data, CRE professionals gain insight into where they may be wasting space or budget, and how to reconfigure the office or workspace types to improve productivity and workplace experience. This is especially important in a hybrid office environment.

As you plan for the future of work, having the right data allows you to be responsive and adapt to what actually happens.

CRE data can’t live in silos anymore

True insight comes when FMs and planners collect data from a variety of sources, including:

• ​Desk and/or room reservations (with check-ins and cancellations)
• ​Employee badge data
• ​Workplace presence IoT sensors
• ​Employee self-reporting and surveys
• ​Wifi logs
• ​Manual office census
• ​Tickets from request management software
• ​HR data

“You need different data sources that can triangulate with one another to see what’s really happening in the workplace,” says Kathleen. “The right data should provide visibility beyond resource booking alone, into a truer picture of employee presence in the office.”

With the office becoming more complex, people need more from their data. They need to be able to look across their information silos and break them down as much as possible.

Smart companies are collecting, analyzing, and integrating data from a wide variety of sources to create responsive, productive, and engaging flexible work environments.

Why right-size your corporate real estate portfolio?

The rise of hybrid work has impacted the physical workplace, leading many companies to pursue corporate real estate optimization as a key part of their real estate strategy.

Hybrid employees use the office less than traditional counterparts, so the recommended office space per employee is shifting. New workplace strategies (such as desk sharing and activity-based working) are leading companies to reconsider whether their current portfolio supports their business needs and goals.

Improving space utilization can improve asset performance by 20-50%.

Right-sizing leads to savings

For example, when TELUS used data to consolidate their offices, they experienced a 5% jump in productivity (over $7 million in savings year over year) and a 20% increase in employee perception that their workplace would help attract and retain talent.

Real estate footprint and associated occupancy costs are typically among a company’s biggest expenses and can affect the bottom line. The CRE industry is shifting in favor of streamlined portfolios and asset types.

The dimensions of how people are using the office have changed dramatically. Without advanced workplace analytics tools, people won’t have a good idea of how to see what’s actually happening in their workplace. This is where data analytics comes in.

Whether a company wants to reduce space, acquire new space, or reconfigure space in response to hybrid working challenges, decision makers need the right datasets at their fingertips, ideally on a cloud-based platform equipped with real estate analytics.

Why right-size your corporate real estate portfolio with data?

A good real estate optimization strategy is always smart, but office renovations can cost up to $290 per square foot, not including lost time and morale from poorly planned upgrades. There are serious benefits to optimization, but also serious consequences to getting things wrong.

Companies are turning to advanced workplace analytics to gain deeper insights and make safer choices for their portfolios.

Combining CRE data to leverage advanced analytics

Advanced analytics help decision makers answer questions such as:

• ​Do we have enough seats, equipment, and collaboration spaces to support a dynamic workforce?
• ​How can we optimize the workplace for the people who use it?
• ​How can we optimize the real estate portfolio given brokerage fees and market trends?
• ​How can we improve day-to-day operations (desks, parking, food, etc.)?

“Ultimately, everyone is trying to answer the question of whether there could be a better fit between who’s coming into the workplace and the resources they have when they get there,” says Kathleen. “All of these optimization questions can help companies achieve the future outcomes they’re looking for.”

When companies use CRE data, they’re not just optimizing real estate to save money—they’re future-proofing their entire organization.

Data gives you the ability to simply try things and figure out what works in a way that is mutually beneficial for the employees and the company.

Real world examples: optimizing with CRE data

Different companies, property types, and asset classes require different approaches to real estate portfolio management and use CRE data in different ways.

• ​One OfficeSpace client used CRE data to understand growth and remaining capacity as they introduced a new hybrid work model.
• ​Peloton uses real-time reports and workplace trends dashboards to ensure financial decisions are driven by data. For example, fiscal forecasts are based on desk bookings and usage trends, and food and beverage programs are refined based on headcount and engagement data.

This CRE data has helped companies optimize space and desk utilization, while also improving the hybrid workplace experience.

With the right data management, you can make sure you have the right space for the right people.

How to right-size your portfolio using CRE data

Real estate portfolio optimization starts with the right data management and requires testing and iteration. It’s not enough to benchmark based on current market data and plan a new workspace; companies need to align their needs, demographics, goals, and CRE data.

Workplace agility is critical, especially a willingness to try new things and see what works. For example, instead of eliminating a headquarters or building, it might make sense to sublet a few floors, collect data on the impact, and iterate.

“How reversible are the decisions you are being asked to make?” asks Kathleen. “The more impactful they are, the more you want to have both high confidence and longer views of the data. Remember that this is a test and learn feedback loop.”

Two tools that simplify this experimentation process:

• ​Office stack planning: Creates a high-level view to reorganize teams and departments
• ​Office scenario planning: Helps test different floorplan layouts before making changes

Companies should ensure that employee experience stays front and center in this process.

“Fostering a better and more productive workplace experience is a big part of the analytics picture,” says Kathleen. “We provide advanced workplace analytics on how employees are using the office. But then our clients can take that information about employee presence and turn it into a better experience for their people.”