As we approach the end of 2011, many corporate real estate executives are making resolutions to cut costs next year. Indeed, as it remains a tenant's market, they will continue to find opportunities to leverage favorable terms in lease negotiations and relocation plans. But after the lease agreement is signed and the build-out is complete, how can companies save on their ongoing occupancy costs?
Many companies today are finding that they can save up to 15%, sometimes translating into millions of dollars, if they outsource Facilities Management (FM) services rather than handle them in-house.
What Is Facilities Management?
FM services involve on-site management of company systems and operations. Services include 24/7 call centers, maintenance and repairs, web-based systems, office support, energy and sustainability programs, facility engineering, custodial services, pest control, management of security and cafeterias, consulting audits, and more.
It is important to differentiate between Facilities Management and Property Management. While both disciplines involve the management of real estate, Property Managers work for investors who own real estate and are most concerned with maximizing income; in contrast, Facility Managers work for the users of real estate who lease or own their properties and strive to maintain the property to best support their business units.
Is Facilities Management Right for You?
To be successful, FM outsourcing requires top-level client commitment, clear goals, and constant communication. In some environments, obstacles like a culture that is difficult to replicate argue against the need for outsourced FM, suggesting that it might be more efficient to in-source or "out-task" select services like elevator operation.
To determine whether FM is right for you, we recommend an assessment of your space needs. If it turns out you're not a great candidate for FM, we will present other options to meet your needs.
What are the Benefits of FM?
- Business Interruptions. When a manufacturing line goes down or there are system failures, the financial losses can be staggering. FM can help prevent these losses.
- Operational Expenses. While other real estate departments are usually responsible for rent, the FM group manages utilities, repairs, custodial, and grounds, with costs that can reach $10/SF.
- Capital Planning. The FM group can develop a comprehensive capital plan that looks ahead five years.
Planning ahead for a fiscally healthy year, you should look for creative ways to cut costs in critical areas such as utilities, energy conservation, insurance, and tax abatements. So take a preventive, proactive vs. reactive approach...and enjoy a gift that keeps on giving.
For more information about Facilities Management, visit our blog: http://www.cresapartners.com/blog/category/facilities-management/.
To learn about our relationship with Jorgensen Facilities Services, click here: http://www.cresapartners.com/integratedservices/facilities.asp.
From all of us at CresaPartners, we wish you
and your loved ones Happy Holidays and a Happy New Year!
