Traditionally, corporations have outsourced real estate functions to reduce costs, drive greater efficiencies and focus on their core competencies. But what if outsourcing could move further up the value chain, and drive innovation and growth as well? Over the last five years, CBRE and Sprint have launched a new era in outsourcing, evolving the traditional vendor-client relationship into a strategic partnership to create significant value for both organizations.
“Typically real estate is viewed simply as a cost center, so this has been transformative,” said Mike Grosko, Managing Director, CBRE Global Corporate Services. “Our focus initially was to cut costs, develop and improve processes, and increase accountability. Now we are working with Sprint to find innovative uses for wireless technology to deliver real estate services and drive revenue growth for both companies.”
In 2008, Sprint made the strategic decision to outsource its full scope of real estate services to CBRE. The wireless giant’s portfolio currently includes 2,000 locations with 18 million square feet in commercial, retail, call center and technical facilities, and annual operating costs of $380 million. CBRE would provide a dozen unique services, from project and facility management to transactions, lease administration and finance.
CBRE moved quickly, transitioning 144 employees in 2009, with a 97% retention rate. And we reduced the company’s operating expense by $35 million in just 36 months — two years ahead of schedule. CBRE consolidated employees at Sprint’s 3.8-million-square-foot world headquarters in Overland Park, Kansas, freeing up surplus space that was eventually subleased, resulting in $10 million in annual revenue. We also launched new sustainability programs and energy-saving measures, helping Sprint move up to third place on Newsweek’s “Green Rankings” of U.S. companies.
Over time, CBRE’s performance, collaboration, reliability and transparency led to a high level of trust that enabled the relationship to take on a more transformative challenge. Senior executives came together to identify innovative ways to use Sprint’s mobile technologies to more effectively deliver CBRE’s real estate services.
CBRE and Sprint developed a comprehensive real estate services portal that provides easy, one-stop access for employees to all real estate service offerings via desktop computer or mobile device. In addition, the team created a mobile site-assessment application that significantly improved the speed and accuracy of the facility-inspection process. The mobile app allows users to quickly fill out a site-assessment questionnaire, take photos and videos, and make them instantly accessible to real estate personnel for capital planning and other decision-making.
The mobile site-assessment tool won CoreNet’s Industry Excellence Award in 2012, and in 2013, the International Association of Outsourcing Professionals® honored Sprint with a Global Excellence in Outsourcing award for its collaboration with CBRE resulting in innovative practices and applications in real estate services and operations.
Sprint and CBRE have broadened their partnership to include third-party technology firms and real estate service providers, which can accelerate the development and adoption of new wireless tools throughout the real estate services industry. “Partnering in the development of these innovations provides CBRE with first-mover advantage,” Grosko explained. “It lowers our cost to deliver real estate services, which drives business growth and revenues for CBRE, and propels the growth in use of wireless services in real estate and revenues for Sprint.”
“What we have achieved here is a much deeper relationship. We are not just providing real estate services in response to what the client is asking for, we are co-creating opportunities and value for the overall enterprise,” added Grosko.
"CBRE knows how scale should be used,” said Brian Jordan, Director of Sprint Real Estate. “This has allowed them to be effective with creating strategic alliance partnerships and bring in new accounts within the service-supplier ecosystem. CBRE’s customer focus and intimacy, despite their size, is another advantage. They do a great job of adding value to their clients by building relationships at an enterprise level rather than merely a tactical level.”