Jeff Weidenborner, Managing Director, Trascent, discusses the corporate real estate operating model and outsourcing trends. This video outlines some of the key emerging client needs related to real estate services today, such as evolving real estate contracts and lease administration technology, changes in occupancy planning and the importance of flexibility and quality in real estate services.
Corporate Real Estate Operating Model and Outsourcing Trends: Video Highlights
In 2024, we have been seeing real estate contracts become increasingly outcomes-based and deal structures incorporating clearer and more compelling performance-based compensation elements.
What are some emerging client needs related to Real Estate Services?
When it comes to lease administration, traditionally, clients, especially in first generation outsourcing, bundled lease admin with other real estate services. These days, clients no longer feel compelled to have it integrated with other services, and especially when service levels may have been lacking, clients are open to going to market to specialized lease admin suppliers to deliver this need, or in some cases, even finding and building in-house talent to perform this function. When it comes to lease administration technology, it has evolved a lot over the past several years. In the past, companies may have relied on their supplier partners’ proprietary lease admin technology. Many clients are less inclined to use that technology in the future, and they are opting to go-to-market to select and implement an off-the-shelf solution.
When it comes to occupancy planning, we are seeing that many heads of real estate today want greater control over the function. In the past, occupancy planning often fell under facilities management, as part of a broader space management and occupancy planning function. But now, because occupancy planning has become so critical to an effective real estate portfolio strategy, heads of real estate prefer to have the function sit within their real estate teams. They want it to work closely with both portfolio strategy leaders and their transaction management teams. Shifting where occupancy planning sits within an organization often requires adjustments to account teams and, in many cases, changes to the contracts themselves. This is a common trend we’re seeing across the industry.
Flexible office solutions have become increasingly important to companies in a post-hybrid work environment. Clients are demanding that suppliers offer them different types of talent and new types of technology to help them manage this very important function. Most of the large global suppliers have developed a flexible office solution team and particular types of technology to help do this. These changes often require updates to contracts and account teams, and we’re seeing increasing demand from clients for support in managing this transition.
Overall, what are the implications of these changes?
Overall, these changes are underscoring the importance of CRE (corporate real estate) organizations and suppliers being more flexible and nimble, and the importance of having better quality talent, technology and data, and the right partners to deliver these services.