By Ken Ashley
DENVER (June 23, 2010)
You’ve cut cost, you’ve “densified” to the max, you’ve got all the newly renewed leases in that nice new database, so what are you going to put in your goals now? While it’s still the very hot summer, the fall planning season will descend on us in what feels like 5 minutes.
What can you do to convince the CFO that you are (continuing) to earn your keep? Yes, it all depends on the company, the corporate culture, and especially the personality of the C level executive to whom you report. Some companies are on the precipice of growth, so there is plenty of work ahead. But for many companies this is a strange time. It feels like suspended animation while we collectively wait for recovery.
We would like to start the conversation about the next ideas to demonstrate value internally. I’ll suggest a few ideas here but would also love your input. You can of course comment here or kick us an email (see below).
Internal Customer Support/Expansion
If you don’t already have a seat at the strategy table, now is a good time to ask to be included. Culture notwithstanding, many executives still treat CRE as an internal and reactionary service-provider. Protecting the path the expansion is a solid way to convince the team that you need to be included. The more time the business or the operating unit gives CRE to react the better, of course. Plus you can serve as an early warning system to other tenants growing in the potential path of growth if you are placed on alert and aware of needs.
Much has been written about proposed changes in Federal Accounting Standards Board rules. If the changes are implemented will they impact your portfolio? Will they change how the company evaluates real estate transactions in the future? While certainly telling a CFO about accounting rule changes can be dangerous, asking intelligent questions and being aware of the issues can’t hurt. Offering to provide data on existing and new real estate obligations will show that you are being proactive.
Asking your major landlords to provide assurances that they are current and in good standing on their debt is a good thing. I hear people all the time say, “it’s no problem, we have an SNDA.” This is like a police officer saying I’m wearing a bullet proof vest so I don’t have to worry about that gun. There are lots of issues that can arise from “zombie landlords’ who can’t service their debt load.
Talk to your regular real estate counsel, your real estate service provider and others to get a handle on your landlords. Set up Google alerts or something similar and be poactive about monitoring your relationship with landlords in the midst of the worst commercial ownership crisis in 80 years.
Then tell the CFO of your efforts.
This is certainly top of mind after a crisis, and most everyone has the “go bags” distributed, but we can all get lulled to sleep. There are a number of new tools coming and now available that are gaining lots of traction. One of them is created by a company called Preparis that has a really cool iPhone app for crisis situations. Check them and their competitors out and stay sharp.
Support for Gen Y/Workplace Branding
In the coming hiring wave (yes, that’s what I said) we will be bringing aboard those 20 somethings that work in caffeine infused state of chaos. There are whole posts, magazine articles and even whole architectural practices dedicated to this subject. Making sure that you are supporting HR with the latest and greatest in workplace strategy is a good thing. We’d suggest you check out CoreNet Leader magazine (free on their website) as a starting point to determine options.
We are clearly coming into a season where acquisitions are occurring at a rapid pace. Could you offer up a strike team including both internal and external resources to assist in evaluating acquisition candidates? For example, are the leases in the target company over market or is the landlord teetering? Perhaps the acquisition team can convert this information into a purchase price reductions. Watch CFO, watch CFO smile.
Lastly, ask your current real estate service provider to talk about the relationship they have with you. Do they have any new tools or resources? What are they seeing that might be of help to you? Is there a way to positively restructure the relationship in a win/win fashion? Perhaps you can ask to meet with senior management to get their view of the world and trends.
In summary, there are likely plenty of things you can be doing, but thinking strategically now and being intentional about creating value for your company will make you a critical piece of the companies success. And I can’t think of a better place to be.
(Note: You can email comments to firstname.lastname@example.org. If you want us to keep your name and or company “off the record” just let us know and we will certainly respect your wishes).