Space & Move Management

CRE data and how to use it to right-size your real estate portfolio

Karina Wright
December 1st, 2022

In the post-pandemic world of corporate real estate (CRE), two things have never been more clear. Decision makers need to be collecting robust CRE data. And they need to be using it to right-size their real estate portfolio.  

In this article, we explore CRE data, including how and why it can dramatically improve real estate optimization for companies of all sizes. 

We’ll be drawing on insights from OfficeSpace Senior Product Manager Kathleen Williams, who focuses on how to help clients use advanced real estate analytics to improve workplace efficiency and employee experience.

Discover how OfficeSpace can help

OfficeSpace has streamlined workplace challenges from large-scale moves and move management to office reopenings and facility requests.

What is CRE data, and who needs it?

CRE data is a broad term. It refers to all the data points collected for the physical workplace. This includes both lease and usage data (sometimes referred to as workplace data). 

Lease data includes lease agreements, notes, images, dates, and related documentation. And like the name suggests, usage data refers to 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. Today, more and more companies have started to collect usage data as well. By doing so, they can gain better insight into how their workplaces are supporting the people who use them. This is while also contributing to any long-term business goals.

Companies are now also able to consolidate their CRE data into the same cloud-based space management software they use to manage their spaces. 

Specifically, facility managers (FMs) and real estate professionals will often rely on workplace reports and analytics to view expected growth trajectories of sites, floors, and departments over time. This, in turn, can help pinpoint when they’ll reach max capacity. 

Space utilization and decision making

They’ll also access critical metrics including things like cost per employee, occupancy rate, and operational costs. 

For example, consider the different ways space utilization data can help with decision making: 

  • Knowing your cost per usage can help determine if your employee attendance justifies your lease cost
  • Knowing your actual usage versus your full potential can help determine if you need to consolidate, sublease, or expand
  • Knowing your office density can help determine if you can get more efficiency out of your space

Armed with both this real-time and historic data, CRE professionals and other decision-makers gain insight into where they may be wasting space or budget. This is along with ways they may be able to reconfigure the office or even the different types of workspaces on offer to improve productivity and workplace experience

Of course, this becomes increasingly challenging—and increasingly important—in a hybrid office. 

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

Kathleen Williams, OfficeSpace Senior Product Manager 

CRE data can’t live in silos anymore

CRE data alone is just one piece of the workplace analytics pie. 

It’s important data, and it helps paint a picture of the office. 

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

“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.”

Kathleen Williams

As we’ll explore below, smart companies and their space planners are collecting, analyzing, and—critically—integrating data from a wide variety of sources to create the responsive, productive, and engaging flexible work environment that is now so top of mind. 

Group-of-employees-in-an-office-and-working-on-corporate-real-estate-data

Why right-size your corporate real estate portfolio? 

Given the rapid rise of hybrid work and its impact on the physical workplace, it’s no surprise that many companies are actively pursuing corporate real estate optimization. In fact, it’s a key part of any real estate strategy. This is whether it’s for a corporate or commercial real estate portfolio.

By definition, hybrid employees use the office less than their traditional counterparts. So that the recommended office space per employee is undergoing a dramatic shift. 

Plus, the rise of new workplace strategies for new hybrid offices (such as desk sharing and activity based working) is also leading many companies to reconsider whether their current portfolio and property management is actually supporting their short and long term business needs and goals. 

Consider that improving space utilization can improve asset performance by 20-50%

Right-sizing leads to savings

Or that when TELUS used data to consolidate their offices, they experienced a 5% jump in productivity (representing over $7 million in savings year over year). 

The move also led to a 20% increase in the perception among employees that their new workplace would help attract and retain employees. This highlights the impact that using CRE data can have on seemingly unrelated business goals like talent attraction and retention

And of course, their real estate footprint (and associated occupancy costs) is typically one of a company’s biggest expenses. And can certainly affect the bottom line.

All combined, it’s clear to see why 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. 

Kathleen williams

In short, whether a company wants to reduce space, acquire new space, or reconfigure space in response to hybrid working challenges, decision makers will need the right datasets at their fingertips (i.e.: on a cloud-based platform equipped with real estate analytics).  

Young-woman-working-in-an-office-at-her-desk-and-taking-notes-on-CRE-data

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

Clearly, a good real estate optimization strategy is always a smart move. Why pay more money to lenders than you need to, or cram workers into spaces that don’t serve them?

But according to the latest property data, office renovations can cost up to $290 per square foot. 

And that number doesn’t take into account the lost time and morale hit that can come from ill-advised or poorly planned office upgrades. 

In other words, while there are serious benefits to optimization, there are also serious consequences to getting things wrong. 

So companies that want to make intelligent, informed decisions are turning to advanced workplace analytics. This allows them to gain deeper insights and make safer choices for their portfolios. 

Combining CRE data to leverage advanced analytics

Advanced analytics can help decision makers to answer better questions. Like whether they have enough seats, equipment, and collaboration spaces to support a more dynamic workforce.  

Combining CRE data from different sources helps create a more accurate picture of how the office is actually being used. In short, it lets FMs be better, more holistic service providers for everyone in the office. 

And with this advanced analytics, companies can answer a variety of new types of questions, including:

  • How to optimize the workplace for the people who use it (for example, what teams are using the office most, and do they have the tools they need when they get there?)
  • How to optimize the real estate portfolio (for example, given brokerage fees and real estate market trends in the current CRE market, where can you make investments and where can you save money?)
  • How to improve day-to-day operations (for example, do you have enough desks, parking, and food for the people who are currently coming in?)

“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.” 

In other words, when they use CRE data, companies are doing more than optimizing real estate to save money. They’re also optimizing real estate to future-proof 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.”

Kathleen Williams

Real world examples: optimizing with CRE data

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

For example, one OfficeSpace client used CRE data to help understand their percentages of growth and remaining capacity as they introduced a completely new hybrid work model.  

And Peloton uses real-time reports and workplace trends dashboards with OfficeSpace to ensure that financial decisions are driven by data. 

“We use the data in OfficeSpace to inform our financial projections,” says Peloton Director of Workplace Operations, Daniel Santiago. “For example, the fiscal forecast of what we expect to spend is driven by how many people are booking desks and the usage trends in each neighborhood. But it can also help with simple tasks like refining our food and beverage program; I can project a line item based on the headcount and engagement that we’re seeing in OfficeSpace.”

Beyond helping the company navigate a period of hypergrowth, this CRE data has also helped the company to optimize space and desk utilization, while also improving the hybrid workplace experience for everyone. 

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

Kathleen Williams
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How to right-size your portfolio using CRE data

Real estate portfolio optimization always starts with the right data management. And it needs to include a lot of testing and iteration. 

It’s not enough to have some appraisers come in, benchmark based on current market data, and plan out a fancy new workspace.

Instead, companies need to look at their needs and demographics, look at their goals, and look at their CRE data… And then try to align them as much as possible

Workplace agility is critical to this process, especially a willingness to try new things and see what works. 

For example, instead of getting rid of corporate headquarters or a whole building, it might make sense to start with subletting a few floors. Collect data on how that smaller change impacts the office, and go from there. 

“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 specific tools can dramatically simplify this experimentation process:

Finally, any time you’re focusing on data, it’s easy to get lost in the weeds. So companies need to ensure that employee experience always 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.”

See OfficeSpace in Action

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OfficeSpace helps clients use their CRE data to make better workplaces for everyone. Reach out for a free demo. 

Photos: FG Trade Latin, Cecilie_Arcurs, littlehenrabi, FG Trade Latin