Real estate relief Featured

7:00pm EDT February 28, 2007

Your offices in Huntington Beach have a leaky roof. Who is responsible? You need to lease a warehouse in Houston. What are your options? You need to finance a new plant in Georgia. How can you leverage your assets and company credit to save millions of dollars?

“A national commercial real estate portfolio can be a complex organism,” says RJ Jesenski, senior vice president at Cresa Partners Orange County. “Strategic planning and the effective administration and management of a real estate portfolio spread across the country or across the globe requires a high level of real estate expertise.”

Smart Business spoke with Jesenski about how outsourcing real estate services can make managing a national real estate portfolio a stress-free experience.

Why is it helpful to have an outsourced real estate acquisition and management service?

Using an outsourced real estate team allows companies to focus on their core competencies. Specialized real estate management service providers maximize the effectiveness and bottom line impact of a company’s national real estate holdings. These real estate advisers have a high level of expertise and have established systems for efficiently managing acquisitions, holdings and dispositions. Also, using an outside service for real estate needs allows businesses to have a team of senior professionals that can expand or contract to meet their varying level of real estate needs without an impact on overhead.

How can a centralized real estate service help develop a strategic plan?

Partnering with a centralized real estate service provider allows clients to formulate a strategic plan that effectively integrates changing business needs with the company’s real estate assets. By carefully evaluating a client’s business outlook, skilled real estate advisers can work to fit and tailor their client’s real estate needs. This can include formulating a plan for how to best increase square footage in certain target markets. It can also mean formulating a disposition strategy for down-sizing real estate holdings through subleases, buy-outs and the sale of excess buildings in other markets.

The highly competitive nature of today’s business marketplace often requires simultaneous execution of seemingly opposing plans such as the acquisition of space in growing markets and the disposition of space in contracting markets. An experienced single-source service provider with a global reach typically provides the most effective solution.

How can a real estate service provider assist with maintenance of existing properties?

Specialized real estate advisers have the technical expertise and information systems that include databases that can track hundreds of leases simultaneously, including the detailed summaries of the terms and conditions governing the landlord-tenant relationship in each lease.

These systems ensure that routine tasks are completed accurately, including paying rent, renewing leases, and reviewing landlord requests for additional operating expense payments. Not only does this reduce strain on companies’ administrative staff, but also saves them money by avoiding late fees, the payment of inaccurate or inappropriate charges and eliminating administration inefficiency.

When maintenance issues arise, centralized real estate service providers can provide all of a company’s facilities with a single source to call.

Depending on the size of the client, real estate advisers can also help negotiate and implement national-level contracts.

How can a team of real estate advisers facilitate the purchase of new property?

Each company has a unique set of real estate requirements based on its preferences and needs. A dedicated group of real estate professionals that thoroughly understands a company’s real estate picture and the industry’s facility needs can accurately represent its clients and effectively negotiate contracts. Over time, a real estate team has an intrinsic understanding of specific clients’ requirements and standards. This creates ever-increasing efficiency and profitability in real estate deals.

How can a centralized real estate service provider assist with financing?

A centralized real estate service provider will help a company create and follow a comprehensive real estate acquisition strategy that can save millions of dollars through creative financing and sophisticated real estate transactions.

At the simplest level, if a business plans to undertake multiple projects in different states simultaneously, skilled advisers can leverage a favorable transaction with a single national landlord for most, if not all, of those projects.

At a more complex level, disciplined real estate planning and implementation can help companies leverage their credit and real estate portfolio to acquire facilities using creative capital markets financing structures that literally save millions of dollars in facility costs.

RJ JESENSKI is a senior vice president with Cresa Partners Orange County and has more than 20 years of experience in commercial real estate. Reach him at rjesenski@cresapartners.com or (949) 706-6614.