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Realism.in real estate_strategies

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Realism.in real estate_strategies

  1. 1. Strategies for Real Estate<br />A primer on various real estate activities<br />Prashant Das<br />Head of R&D | Partner<br />
  2. 2. Objective<br />Introduction<br />PART-I: Corporate Real Estate Strategies<br />PART-II: Service Provider Strategies <br />PART-III: Real Estate Company strategies<br />
  3. 3. PART-ICorporate Real Estate<br /><ul><li>Real estate owned by corporate has traditionally been one of the largest asset components.
  4. 4. Annual spending on a company’s real estate may vary from two to more than 10 percent of the total revenue </li></li></ul><li>CRE: The Finance’s view <br />Why is Finance team interested?<br />Savings on all other fronts of business such as sourcing, business process redesign etc have been extracted already<br />CFO’s role has expanded up to the level of strategic planning<br />
  5. 5. Typical Corporate Strategies<br /><ul><li>Integration of </li></ul>real estate and corporate strategy<br /><ul><li>Centralizing Real Estate Functions
  6. 6. Leveraging technology
  7. 7. Outsourcing real estate </li></li></ul><li>Cornell Balanced Real Estate Assessment model (COBRA)<br />The model considers the following attributes <br /><ul><li>Community Impact,
  8. 8. Architectural Branding,
  9. 9. Building Adaptability,
  10. 10. Defined Boundaries,
  11. 11. Regional Economic Volatility .
  12. 12. Net Income Per Employee (“NIPE”)</li></ul>Uncertainty Analyses, <br />Risk-Reward Analyses <br />Monte Carlo Analysis<br />
  13. 13. PART-IIService Provider Strategies<br /> Strategic Approach<br />Needs assessment<br />Specification of service offering<br />Compensation arrangements and pricing level<br />Market segment coverage—geography, property type, scale, financing form, etc.<br />Form of work product deliverable<br />
  14. 14. Service Provider Strategies<br /> Competitive Differentiation<br />Cost<br />Service<br />Expertise<br />Market coverage<br />Prestige<br />Strength (deep pockets)<br />Risk allocation between client and service provider<br />One-stop shopping<br />Scale/Size<br />Focus/Specialization <br />
  15. 15. Service Provider Strategies<br /> Initiative to Stimulate Demand<br />General—i.e., You should invest in real estate because . . .<br />Service—i.e., You should have an independent due-diligence analysis because . . .<br />Type of service provider—i.e., You should retain a firm with these qualifications . . .<br />Specific company—i.e., You should work with our company because . . .<br />Transaction—i.e., You should retain us for this specific transaction because . . .<br />Contract terms—i.e., You should retain us to provide these services on these terms because . . .<br />Ongoing support—i.e., You can count on us to help you on an ongoing basis . . .<br />
  16. 16. PART-III Development Company Strategies<br /> Need for a Real Estate (Development) Company to strategize<br />Changing Economic and Real Estate Environments: A looming shift between phases of the real estate <br />Changes in Ownership and/or Leadership: Either an orderly or traumatic shift in key leadership <br />Mergers and Acquisitions: Every aspect of a company’s strategy <br />Tremendous Growth: Complete structure of the organization<br />Challenges to Growth: Reposition, expansion, diversification, or rationalization<br />Legacy Vision: desire to create a long-term vision and lasting legacy for good and bad times<br />
  17. 17. http://www.realism.ineLearning | Research | Real Estate | India<br />