Real Estate Updates Sarah Bush AVP for Real Estate ALG Meeting January 28 th, 2016

Summer Enact “Early Win” Projects Spring Analysis, Recommendations Winter Space Verification and Info Gathering Now Stakeholder Engagement Space Planning Initiative Update Project Purpose: Increase efficiency and create opportunities for growth. An honest assessment of university space and use patterns to inform intentional decision making. Explore peer benchmarking and develop accurate reporting with regard to space utilization. Make recommendations to senior leadership for areas of improvement. Early Project Focus: Stakeholder engagement, information gathering, organization, and project governance. Preliminary Findings: Primary beneficiary of Space Database is Cost Recovery. It can be enhanced for additional uses. While no central standards or guidelines exist, some individual units have their own standards or guidelines, which are communicated internally both formally and informally. Strategic planning per unit involving space is variable.

Services Provided by CMU Real Estate 3 WHAT ARE THE NEW SERVICES THAT THE CMU REAL ESTATE GROUP WILL PROVIDE? The CMU real estate group, will now provide the following menu of services to CMU business units: – Market Evaluations – Site Selection Assistance – Space Planning Services – Financial Analysis – Business Case Development – Expert Lease Negotiation – Coordination with Legal, Risk Management and Finance – University Space Committee Approvals – Lease Abstraction – Database Management and Reporting – Contractual Compliance – Invoice Review – Desktop Audits – Lease Dispute Resolution

Lease Administration Project 4 KEY MESSAGES: As a benefit to the business units, we are pursuing an initiative to consolidate and professionally manage the CMU lease portfolio. The CMU real estate department will provide lease administration and financial management services across CMU owned and leased real estate portfolio. Implementation of this project will result in regular reporting accessible by end users, and mitigate financial and legal risks to the university.

5 WHY ARE WE CHANGING? A new, more flexible model of expert services led by the CMU real estate department will allow CMU’s business units to focus on their core business / academic functions. This initiative will help us manage our expanding real estate portfolio with consistency across the university; adapting to changing trends, and implementing best practices. Lease Administration Project

6 WHAT WILL BE DIFFERENT? CMU real estate group will bring new tools and resources to enhance service delivery and implement best practices across CMU’s portfolio of domestic academic and administrative leased property. CMU real estate group will be responsible for processing payment of all rent-related invoices to Landlords as well as subtenant invoicing/billing. CMU real estate group will be responsible for reviewing all Operating Expense reconciliations, Estoppels and SNDAs. All lease documents will be housed in a real time online database. The database will be accessible by CMU stakeholders, enabling them to produce standard and ad hoc reports including: property and portfolio summary reports, expiration and option reports, single and multiple summary abstracts and financial reports. WHAT WILL STAY THE SAME? Budgeting and charge strings for payment processing will remain unchanged. Payment processes for auxiliary rent payments, and international leases will remain unchanged. Lease Administration Project

7 WHAT IS CDFD’S INVOLVEMENT? CDFD will transition centrally paid leases over to the real estate group. All lease-related support work will shift from CDFD to Real Estate. CDFD will continue to manage university funded capital projects in leased spaces, as well as all capital projects in university owned locations. CDFD and Real Estate will collaborate on all space requests, and jointly coordinate space committee approvals. PROJECT TIMELINE: The Go-Live Target is June 1, January – Introduction of project to stakeholders February – Meet with payment processors to discuss the project in more detail and gather additional information. March - Reach out to Landlords, CMU commercial tenants and CMU tenant stakeholders, to communicate the changes and gather info. April - Complete data entry and finalize new processes. May - Test the new reporting tool and payment processes. June – 1 st batch of consolidated rent payments. Lease Administration Project