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Article
Publication date: 1 January 2001

Virginia Gibson

Real estate is an inherently inflexible asset, yet corporate real estate managers increasingly need to find ways in which flexibility can be achieved. Shorter planning…

Abstract

Real estate is an inherently inflexible asset, yet corporate real estate managers increasingly need to find ways in which flexibility can be achieved. Shorter planning horizons, increasing corporate experimentation and growth through mergers and acquisition are but a few of the influences which have led to the need for more flexible resources. One way in which corporate real estate managers can gain a greater insight into the problem is by recognising that real estate is often considered from a variety of perspectives: as a physical, functional and financial asset. Each of these perspectives leads to a different source of flexibility. As a physical asset, corporate real estate managers are concerned with aspects of design, including floorplate sizes, column placement and building services. As a functional asset, corporate real estate managers consider what activities can actually be undertaken inside a building. As a financial asset, corporate real estate managers examine the terms of contracts and the ability (and cost) to terminate those obligations. Each of these types of flexibility is required, but at different times and for different purposes within the life cycle of an organisation. Possibly the most appropriate way to look at the issue is on a portfolio‐wide basis, considering what are an organisation’s core and periphery real estate requirements. This approach requires a different type of examination of the assets but can provide a corporate real estate manager with a firm base for working towards the elusive goal of flexible real estate.

Details

Journal of Corporate Real Estate, vol. 3 no. 1
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 July 2001

Greg Krzysko and Claudia Marciniak

This paper discusses ways that corporate real estate managers can use creative financial structuring to optimise their real estate portfolios. The corporate real estate

Abstract

This paper discusses ways that corporate real estate managers can use creative financial structuring to optimise their real estate portfolios. The corporate real estate manager can most effectively arrive at an optimal decision by considering three perspectives: the corporate real estate market, business unit needs, and investor preferences. After gathering the relevant information and evaluating the pros and cons of the full range of financial structures, the real estate manager can make a sound recommendation to the business unit and the finance department. The manager knows that the solution is acceptable to the marketplace, can provide flexibility in the event of a changed business model, and provides the space at the most reasonable cost.

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Journal of Corporate Real Estate, vol. 3 no. 3
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 April 2002

Arnold L. Redman, John R. Tanner and Herman Manakyan

This study examines the financing methods used by corporations to acquire real estate for their operations. It also examines the opinion of managers about the factors that…

Abstract

This study examines the financing methods used by corporations to acquire real estate for their operations. It also examines the opinion of managers about the factors that they consider in choosing financing methods. The data were provided by a survey questionnaire that was sent to members of the International Association of Corporate Real Estate Executives. It was found that companies rely on internal financing (operating cash flows) and external financing such as long‐term leasing, joint ventures, property mortgages and sale/leaseback arrangements. The top‐ranked methods of finance include operating cash flows, property mortgages, leasing and sales/leasebacks. Use of real estate investment trusts, collateralised mortgage obligations and mortgage‐backed securities were the lowest‐ranked forms of financing. Managers tend to look at tax advantages of debt and availability of cash flows in deciding which financing methods to use, rather than theoretical corporate finance factors such as bankruptcy cost. There were significant differences in opinion by industry and by company size regarding the use of cash flows and the impact of debt financing on common stock prices.

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Journal of Corporate Real Estate, vol. 4 no. 2
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 April 2001

Pity van der Schaaf and Lydia de Puy

Many corporate and public real estate managers are challenged to prove their added value to both the organisation and the individual business units or departments. Value…

Abstract

Many corporate and public real estate managers are challenged to prove their added value to both the organisation and the individual business units or departments. Value can be added by product and by process. This paper elaborates on ways to improve the corporate real estate portfolio management process in order to align the real estate portfolio to the different needs of the organisation and thus add value to the organisation by delivering a better product. To manage the real estate portfolio as a group instead of individual properties, the long‐term portfolio strategy should be translated into short‐term guidelines and clear performance measures in order to analyse alternatives and the performance of the individual properties. These measures should be related to what the stakeholders consider to be the added value of corporate real estate. The examples in this paper will show how a corporate real estate manager can create a clear framework for making real estate decisions on a day‐to‐day basis.

Details

Journal of Corporate Real Estate, vol. 3 no. 2
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 January 2006

Anna‐Liisa Lindholm and Kari I. Leväinen

The purpose of this paper is to model how real estate strategies can add value to the core business, providing corporate real estate mangers with a tool to illustrate to…

Abstract

Purpose

The purpose of this paper is to model how real estate strategies can add value to the core business, providing corporate real estate mangers with a tool to illustrate to corporate officers how real estate adds value to the firms.

Design/methodology/approach

The authors review previous research and interview 26 corporate real estate executives to examine what are common approaches to developing real estate strategies and measuring performance. They then model how real estate adds value to the firm and how that value can be measured.

Findings

Many firms do not recognize how real estate adds value to the business. While they may have a corporate real estate strategy, that strategy is often not developed in coordination with the overall business strategy. In addition, the performance measures being used by many companies focus solely on cost, not value added.

Practical implications

Corporate real estate's contribution to the core goal of wealth maximization can be modeled to illustrate the tangible and intangible effects real estate has financial performance. A structured approach to developing a real estate strategy in conjunction with the core business strategy, supported by a performance measurement system will allow corporate real estate executives to better communicate how corporate real estate is adding value to the firm.

Originality/value

Corporate real estate managers need better ways to illustrate, to corporate leaders, how they add value. This paper illustrates such a model with supporting operating decisions and performance measures.

Details

Journal of Corporate Real Estate, vol. 8 no. 1
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 11 September 2009

Linda Too and Michael Harvey

The purpose of this paper is to introduce the concept of timescape and examine its impact on corporate real estate strategy, i.e. the people, process, space and technology…

Abstract

Purpose

The purpose of this paper is to introduce the concept of timescape and examine its impact on corporate real estate strategy, i.e. the people, process, space and technology elements of strategy.

Design/methodology/approach

This paper utilises a qualitative approach to analyse secondary data in order to develop a conceptual framework of timescape for corporate real estate strategies.

Findings

Time is an integral part of strategic corporate real estate management. There are seven key elements that make up the timescape for corporate real estate strategies.

Research limitations/implications

This is a conceptual paper and future empirical research should be conducted to validate the propositions made in this paper.

Practical implications

The paper clearly identified the need to incorporate timescape into corporate real strategy formulation. The discussion on the impact of timescape on corporate real estate is useful in providing the impetus for managers who operate in a hyper‐competitive global business landscape to review their existing strategies.

Originality/value

This paper is high in originality as it pioneers the concept of timescape for application within corporate real estate management.

Details

Journal of Corporate Real Estate, vol. 11 no. 3
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 June 2010

Karen M. Gibler, Robert R. Gibler and Derek Anderson

The purpose of this paper is to enable real estate managers to identify and evaluate appropriate information technology (IT) solutions from the array of options available.

Abstract

Purpose

The purpose of this paper is to enable real estate managers to identify and evaluate appropriate information technology (IT) solutions from the array of options available.

Design/methodology/approach

The authors explain the main components of IT solutions and provide a systematic approach for evaluating, selecting, and maintaining a cost‐effective IT solution, empowering corporate real estate managers to make informed IT decisions.

Findings

Corporate real estate managers can use a systematic approach to evaluating hardware and software options to select a solution that better serves business needs.

Practical implications

Corporate real estate managers can use the models in this paper to change how they approach the selection of IT solutions for their business.

Originality/value

The paper fills a void by providing IT assistance specifically for corporate real estate managers using business rather than technical language.

Details

Journal of Corporate Real Estate, vol. 12 no. 2
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 December 2005

Fernando de Zúñiga

Purpose – This paper intends to respond the question that comes up to CRE managers when they consider the outsourcing technique for their CRE management and portfolio. The…

Abstract

Purpose – This paper intends to respond the question that comes up to CRE managers when they consider the outsourcing technique for their CRE management and portfolio. The question, if it is possible to capture in the outsourcing contract sufficient flexibility to meet the changing needs of the business and add value, addresses the existing debate on flexibility arguing the suitability of the outsourcing structures for corporates portfolio. Design/methodology/approach – The paper undertakes a methodological analysis, considering the main outsourcing deals in the UK and continental Europe and discussing the main theories on management outsourcing. Theories of flexibility of CRE portfolios are considered and the main characteristics of the new REPs discussed. Findings – The paper finds that it is possible to capture in the outsourcing contract sufficient flexibility to meet the changing needs of the business and add value because a contract can capture all the flexibility desired and iit would add value as the properties would be used efficiently. Two outsourcing contracts in the UK are explained in two case studies, which support this. Originality/value – The paper suggests methods to outsource CRE portfolios and obtain adequate flexibility to add value to shareholders.

Details

Journal of Corporate Real Estate, vol. 7 no. 4
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 October 2003

Andreas Pfnuer and Stefan Armonat

A great number of German companies are suffering an acute financial crisis. Financial optimisation of the substantial property holdings owned by German companies offers an…

Abstract

A great number of German companies are suffering an acute financial crisis. Financial optimisation of the substantial property holdings owned by German companies offers an opportunity to reduce costs and to free up capital. However, the demands on property for operational purposes create difficulties when optimisation is carried out exclusively for financial objectives. In this paper it will be shown, by means of an empirical investigation of real estate directors and financial managers of the leading German undertakings, that companies are failing to take the decisive step towards optimisation. The reason for this lies in inadequate internal preparations, manifested in the lack of a linkage between real estate strategy and corporate strategy. Property rights‐oriented analyses of real estate assets create new scope to refinance existing holdings, without sacrificing the important requirements of the units occupying them. This paper discusses the essential steps to a solution and explains the potentials that can be enhanced by a structured financial optimisation of property holdings.

Details

Journal of Corporate Real Estate, vol. 5 no. 4
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 23 November 2010

Linda Too, Michael Harvey and Eric Too

The purpose of this paper is to examine the impact of globalisation on corporate real estate strategies. Specifically, it seeks to identify corporate real estate

Abstract

Purpose

The purpose of this paper is to examine the impact of globalisation on corporate real estate strategies. Specifically, it seeks to identify corporate real estate capabilities that are important in a hypercompetitive business climate.

Design/methodology/approach

This paper utilises a qualitative approach to analyse secondary data in order to identify the corporate real estate capabilities for a hypercompetitive business environment.

Findings

Globalisation today is an undeniable phenomenon that is fundamentally changing the way business is conducted. In the light of global hypercompetition, corporate real estate needs to develop new capabilities to support global business strategies. These include flexibility, network organization and managerial learning capabilities.

Research limitations/implications

This is a conceptual paper and future empirical research needs to be conducted to verify the propositions made in this paper.

Practical implications

Given the new level of uncertainty in the business climate, that is, hypercompetition, businesses need to develop dynamic capabilities that are harder for competitors to imitate in order to maintain what is considered a “momentary” competitive advantage. The findings of this paper are useful to guide corporate real estate managers in this regard.

Originality/value

This paper is original in two ways. First, it applies the strategic management concept of capabilities to corporate real estate. Second, it links the key challenge that businesses face today, i.e. globalisation, to the concept of capabilities as a means to maintain competitive advantage.

Details

Journal of Corporate Real Estate, vol. 12 no. 4
Type: Research Article
ISSN: 1463-001X

Keywords

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