Los Angeles – August 12, 2010 – Effective corporate real estate departments reduced overall occupancy by 25% through practices that drive efficiencies and lower costs, according to the findings of a new report, “What is Your CoRE Strength,” produced by CB Richard Ellis’ (CBRE) Global Research and Consulting group.
The special report highlights eight specific practices that top corporations are using to enhance the performance of their corporate real estate (CRE) departments. These factors include the ability to allocate costs back to the business unit, fully integrate CRE into corporate cost reduction initiatives, and control and/or approve space standards, exceptions and transactions.
“What is Your CoRE Strength” notes that while the cost to implement such policies is hard to quantify given variances in corporate requirements and structures, the potential dollar savings gained by adopting at least six of the eight practices – considered an “effective” real estate organization – can be significant.
“Our study found that effective organizations occupied 25% less square footage per workstation. While modest on the surface, this can translate to significant savings for larger portfolios,” says report author and CBRE Director Seth Martindale.
The study examined major Fortune 500 companies with average revenue of more than $52 billion, more than 132,000 employees (on average), and average occupancy totaling more than 18 million sq ft.
“Our study found just a 10% decrease in portfolio occupancy for these companies equated to a run-rate savings of $36.6 million annually, assuming an average cost of $20 per square feet for office space. This does not include additional opportunities available through reduced furniture, fixtures and equipment, lower facilities management costs and other savings. Any corporation that is not giving its CRE department the authority they require to be effective is missing a substantial opportunity,” added Mr. Martindale.
Note to Editors: “What is Your CoRE Strength” can be viewed here. To speak with Mr. Martindale or another CBRE expert, please contact Robert McGrath (212.984.8267 or Robert.McGrath@cbre.com).
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2009 revenue). The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com.