CFM Study Session # 2 Real Estate

Real Estate Competency Manage & implement Real Estate Master Planning Process Manage Real Estate Assets

Real Estate & Facility Management Traditional perception of facility as office/workspace More valued today as property to be sold or traded New organizational function-managing Real Estate as an asset Requires developing new skills while utilizing old ones Need to understand Real Estate Principles & Practices Need to see inter-relationships with Facility Management

Key Concepts Real Estate Planning  Tools & Techniques The Real Estate Life Cycle  Key Activities  Tools  FM Touch Points Adding FM value to Real Estate Function

Real Estate Planning Managing the Master Plan Own vs. Lease Types of leases Negotiating a lease Disposal of facilities

Influences- Internal Factors Corporate strategic plan  Anticipated growth  Anticipated compression Financial analysis Corporate Business Cycles Corporate image

Influences- External Factors Financial market/macroeconomics Real Estate market conditions Environmental regulations Governmental controls Community Relations

Managing the Real Estate Master Plan Vision  Strategic in nature  Holistic Components  Follow strategic plan format  Confidential document Key Stakeholders  Internal  External

Maintaining the Master Real Estate Plan Measure Real Estate performance Measure customer usage Monitor economic changes in market Awareness of deviations from plan Information gathering for recommendations

Real Estate Lifecycle Acquisition Extended Operating Hours Management Disposition

Acquisition Due Diligence  Appraisal  Environmental  Condition Assessments  Operating Cost budgets/Pro Forma  Sustainability Lease vs. Purchase  Time value of money  Lease types  Fee Simple  Terms, conditions & Clauses

Lease Negotiations Assemble a team  FM as owner rep  Legal  Broker Develop RFP Standard Levels of Service Supply/Demand of Market Landlord Incentives

Management Highest & Best Use Studies  Optimum use of facility Calculations  Space (SF, Gross, Rentable, Usable)  Cost (opex) Portfolio Administration  Inventory  ROI Performance  Analysis  Reporting

Question #1 In a multi-floor, multi-tenant office building, a private stairwell built between two floors occupied by one tenant is:  Part of the building’s common area  Part of the tenant’s rentable area  Part of the tenant’s usable area  Part of the floor’s common area

Question #2 Usable area equals rentable area minus which of the following (Choose 3)  Building Core  Primary Circulation  Secondary Circulation  Service Areas

Question #3 An attribute of a good master plan includes (choose 2)  Accurate  Permanent  Detailed  Within the framework of a corporate master plan

Question #4 When calculating a floor’s rentable area, you must first subtract the area calculations for which of the following (choose 3)?  Stairwells  Restrooms  Elevator shafts  Mechanical chases

Question #5 To be legally enforceable, a contract to purchase real estate must include all of the following, except:  Be in writing  Include consideration  Include insurance requirements  Include signatures

Question # 6 Leasing provides which of the following advantages (choose 2) ?  Allows for minimum capital investment  Allows a business to enter a market quickly  Provides a hedge against inflation  Conveys company pride & growth

Question # 7 In Real Estate, curb appeal means:  Height of the curb and distance to the parking lot  Initial impression a facility makes on a visitor  Layout of the landscaping & shrubbery  Large natural areas preserved for environmental reasons

Question # 8 Purchasing property provides which of the following advantages (choose 2) ?  Ensures a business the desired location  No restrictions on use  Conveys financial stability  Good exit strategy if company downsizes