Creating Resilience
10 High-Impact Moves to Reduce Total Cost of Occupancy
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October 25, 2023 60 Minute Read
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Strategies for resilience amid economic uncertainty
Corporate Real Estate and Facilities (CRE&F) executives face tremendous financial and productivity pressures. While cost-savings mandates and workplace transformation initiatives are not new, this economic cycle presents CRE&F with particularly significant challenges:
- Elevated inflation, which impacts everything from capital projects to facilities supplies
- Central bank monetary tightening, which raises capital costs and heightens economic uncertainty
- Historically low unemployment rates, intensifying the competition for talent while driving up labor rates
- Historically low unemployment rates, intensifying the competition for talent while driving up labor rates
- Carbon reduction and net zero commitments, which require large financial investments and strategic clarity
- Uncertainty in world financial markets, impacting budgets and availability of capital
Over the next two months, CBRE Institute will release a series of insights that will explore ten initiatives CRE&F leaders may consider to navigate these new challenges, hedge against inflation, source capital, and mitigate risk.
Explore all 10 High-Impact Moves to Reduce TCO
What's New for 2023?
Unveiling CBRE Institute’s Fall 2023 High-Impact Moves to Reduce Total Cost of Occupancy (TCO)
Corporate Real Estate and Facilities (CRE&F) executives face tremendous financial and productivity pressures. While cost-savings mandates and workplace transformation initiatives are not new, this economic cycle presents CRE&F with particularly significant challenges:
- Ongoing inflation, which impacts everything from capital projects to facilities supplies
- Central bank monetary tightening, which limits the availability of capital and raises its cost
- Historically low unemployment rates, intensifying the competition for talent while driving up labor rates
- Widespread adoption of hybrid work to influence talent retention, resulting in sub-optimal occupancy in most CRE&F office portfolios
- Carbon reduction and net zero commitments, which require large financial investments and strategic clarity
- Cash flow concerns with clients and suppliers
Strategies for Resilience Amid Economic Uncertainty
CBRE Institute’s Fall 2023 report outlines 10 initiatives CRE&F leaders may consider to navigate these challenges, including the latest perspectives on prioritizing capital for CRE projects, investing in EV charging and onsite renewables, developing a comprehensive decarbonization strategy, and using technology to manage your facilities in a smarter way. The report explores:
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Transforming Your Approach to Space
Revisit your space standards to reflect hybrid work realities and prioritize capital spend accordingly, with data-based decisions.
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Developing Space Consolidation Strategies
Develop real estate strategies that begin with line-of-business considerations, labor availability, market conditions and sustainability priorities—resulting in both cost savings and carbon footprint reduction.
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Unlocking Trapped Capital
Explore sale-leaseback structures and initiatives that reduce operating expenses, improve cash flow and strengthen the balance sheet.
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Relocating To More Favorable Markets
To optimize labor availability, skillsets, affordability and incentives, explore emerging markets that could futureproof your workforce, provide resiliency against climate risk and give you greater access to green power.
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Leveraging Business Analytics to Lower Total Cost of Occupancy
Invest in holistic, “single pane of glass” portfolio analytics to drive transparency to Lines of Business and uncover new cost-savings initiatives.
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Prioritizing Capital for CRE Projects
Prioritize business-critical plans and bundle recurring projects to increase leverage on cost and schedule. Consider a turnkey approach to mitigate risk and hedge inflation.
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Investing in EV Charging and Onsite Renewables
Explore electrification, electric vehicle (EV) charging and solar solutions to decrease costs and energy consumption, capture utility incentives, reduce exposure to community pricing and lower technical labor requirements.
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Developing a Comprehensive Decarbonization Strategy
Apply an end-to-end solution to help identify, implement and achieve decarbonization across your organization.
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Using Technology to Manage Your Facilities in a Smarter Way
Increase efficiency and operational reliability while reducing carbon and lowering cost with connected building automation, IoT, AI and advanced analytics.
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Transforming Real Estate Delivery Models for a New Era
Conduct a comprehensive organizational review to explore globalizing your model, consolidating providers, eliminating shadow positions, and right-sizing organizations, ultimately to develop optimal delivery models across all integrated partner organizations.
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Please reach out to your CBRE point of contact or CBRE Institute should you have any questions or require information regarding a comprehensive portfolio diagnostic.
As illustrated in the table below, many of the ten high-impact initiatives have the ability to mitigate multiple risks occurring in today’s macro environment, while others have very specific—yet highly impactful—focus.
The report delves into each tactic, defining the initiative and illustrating how to begin, why it's relevant and examples of impact at comparable organizations.
Explore all 10 High-Impact Moves to Reduce TCO
Discover strategies for resilience amid economic uncertainty
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