Creating Resilience

Achieving Transformational Business Outcomes Through an Integrated Delivery Model

August 21, 2023 3 Minute Read


CRE teams around the world are being asked by their C-Suites to deliver transformational business outcomes for their enterprises. These outcomes include major initiatives such as marked occupancy cost reductions to impact earnings per share (EPS), sustainability initiatives to achieve carbon neutrality commitments, and workplace initiatives to drive office utilization and employee engagement.

While it is exciting that CRE now has a well-earned “seat at the table” with their C-Suites, CRE teams are finding it difficult to swiftly deliver maximum value due to the fragmentation of their traditional service provider delivery models. CRE’s ability to deliver bold results is constrained by variations in delivery across geographies, incomplete data and reporting and inconsistent service functions (e.g., transaction management, facilities management, project management, communications).

The CRE organization at a global financial services firm recently partnered with CBRE to implement an integrated service delivery model across their 6 million square foot portfolio to achieve transformational outcomes for their enterprise. The model was designed to deliver outcomes focused on occupancy cost reductions, revenue generation, carbon neutrality, and more. While traditional outsourcing models can produce valuable outcomes, this integrated approach efficiently amplified value on a portfolio-wide basis, with five key elements as the foundation:

  1. A model built around a deep understanding of the clients’ strategic, enterprise objectives
  2. Integrated account team leadership
  3. Performance management and KPIs aligned across service areas and focused on transformational outcomes 
  4. Integrated technology, data, and analytics
  5. Integrated “moments that matter” processes

A Deep Understanding of Our Client’s Strategic, Enterprise Objectives

Before the company could undertake a transformative change, both the client and CBRE needed to align on the enterprise’s long-term strategic objectives. This sets the stage for properly structuring and resourcing an operational model and allows a service provider to establish processes derived from industry-leading insights, design intuitive analytics dashboards, and set performance goals. Through collaborative discussions, the client conveyed four key objectives that would inform the delivery model: reduce occupancy costs by 25% over the next two years, lease a large, owned office building (in which the client’s own occupancy has been steadily decreasing over the last several years), achieve carbon neutrality by 2030, and create integrated processes to successfully achieve these goals and future strategic initiatives.

Articulating the “Maximized” Value

By tracking year-over-year value, this client was able to:

  • Achieve $58 million in savings, well above the $50 million target
  • Attain 36% DBE spend, 225% above baseline
  • Execute 100% of KPI/SLA targets
I am very, very satisfied. We are in year three of the contract now. A natural expectation would be that they [CBRE] got the low-hanging fruit of savings upfront and that the savings would begin to diminish over the years, but they continue to provide significant financial savings for us.
Head of Corporate Real EstateFinancial Services Client
In addition to the above, our service line teams have partnered to identify further opportunities to drive financial value throughout the real estate life cycle. These examples are illustrative of the many integrated “moments that matter” processes we have in place, incorporating into our technology, reporting, and analytics – and underscores the benefits of integrated delivery:   

  1. Transaction Management + Project Management
    If a lease is not being renewed, PJM is aware and can remove the site from planned capital projects and budgeting.
  2. Transaction Management, Facilities Management + Project Management 
    If a lease is being renewed, the TM is knowledgeable of needed operational enhancements (FM) and desired tenant buildouts (PJM)—which enable greater leverage in negotiations.
  3. Facilities Management + Transaction Management
    Post-lease execution, FMs have access to lease files, including details of the landlord’s responsibilities. This ensures the CRE team is not performing work that is the responsibility of the landlord.

Solutions CBRE Deployed

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Transforming Real Estate Delivery Models for a New Era

CBRE Institute recently released an article on Transforming Real Estate Delivery Models for a New Era, which includes additional information on how to begin a gap analysis of your current delivery model and why it is important to contemplate change during this particular moment in time for the CRE industry.