The importance of effective Strategic Real Estate Planning in driving a company's ability to maximize profitability and minimize risk is often woefully underestimated and overlooked by business executives; that is until it is too late!

A company's real estate assets, liabilities and decision making WILL, on varying scales, either enhance or compromise its overall success. If managed effectively, a company's real estate assets can add substantial value at all levels. It is therefore essential that those responsible for corporate property management are experienced in doing so and also take full advantage of the benefits of professional advice from a qualified consultant.

Strategic real estate planning examines the business issues that effect a company's real estate requirements. This in turn determines how real estate assets or liabilities can be best positioned to support its financial and operational objectives. The ability to respond quickly and effectively to changes in operations, organizational structure, markets and business strategy is more important than ever in terms of maximizing value and risk management. Hence, the quality of decision making intelligence a company gains from such planning will directly impact its ability to maximize value and minimize risk. Real estate risks should be translated into business risks to determine the business consequences of a decision by analyzing which risks are consistent with expected business returns and thus acceptable, and which risks should be avoided because the disadvantages outweigh the advantages.

Maximizing value creation is one of the most challenging issues facing senior management today. Strategic real estate planning can enable companies to effectively map real estate decisions to business strategy; thus resulting in improved financial and operational performance. It also integrates financial and strategic objectives and creates solutions that deliver maximum flexibility and increase efficiency. It also establishes specific criteria for transaction structure, capital requirements, financing, P&L and tax planning, and decision making and approvals.

An effective strategic plan begins with a detailed review of the organization's financial and operational objectives and the key business issues facing the organization. The goal of this review is to consider the real estate from a business strategy perspective and determine how it can be positioned to most effectively support strategic business objectives.

Below is a summary of common issues companies need to consider when formulating an effective strategy:

1. Corporate Strategy
2. Short and long-term goals and objectives
3. Operational Drivers
4. Physical and geographical locations
5. Demographic and economic audits
6. Proximity to Workforce
7. Qualitative and quantitative analysis
8. Lease review
9. Operating expense audits
10. Forecasting revenues
11. Space programming
12. Budgeting
13. Economic and municipal incentives
14. Consolidations
15. Expansions
16. Early lease renewals and negotiations
17. Acquisitions and dispositions
18. Sale and leasebacks
19. Staffing and space utilization

Through aligning corporate real estate strategy with financial, operating and strategic goals, companies can derive greater value from their real estate assets and obligations. The right balance of a sophisticated, broad reaching, and intelligent approach that enhances corporate performance can mean the difference between "cutting good real estate deals" and driving business success.