Future State Assessment: The Second Step of CRE Portfolio Optimization

To ensure your commercial real estate (CRE) portfolio remains in line with your overall business strategy, it’s always smart to revisit, reevaluate, and reoptimize your existing portfolio—this process is called real estate portfolio optimization

As market conditions and business objectives often change, organizations must remain aware of how both internal and external shifts impact their portfolios. By revisiting your current CRE portfolio, you can ensure a better space, location fit, or configuration for your business to reach its goals and to grow.

The portfolio optimization process ultimately involves four strategic steps: 

  1. Current state assessment.
  2. Future state assessment.
  3. Scenario planning, strategy, and action plans.
  4. Implementation.

In this post, we’ll walk you through exactly what to expect during the future state assessment phase. 

For everything you need to know about portfolio optimization, download our free whitepaper

What Are the Goals of Future State Assessment In Portfolio Optimization?

In the second phase of portfolio optimization, future state assessment, you and your real estate advisor will articulate the future real estate needs for the organization. The goal of this phase is to define ideal real estate needs based on organizational goals.

What Does Future State Assessment Involve?

The future state assessment phase usually includes the following three tasks:

  1. Conducting interviews with real estate and business unit leaders.
  2. Distributing surveys to understand future real estate needs.
  3. Identifying and interviewing peer organizations to develop case studies of best practices.

To best understand your future CRE needs, the following questions are typically discussed among your team: 

  • What is your ideal space sizes? What is the ideal quantity of space required?
  • Does your team need to be in one location, or multiple separate smaller locations? 
  • Is there a need for a front office / headquarters and back office / operations center? 
  • Where do you meet your clients? Does your team travel to them or do they come to your centralized or decentralized locations?
  • Where are your suppliers located? From a logistics standpoint, do you need to be located closer to suppliers or customers? 
  • How is a successful real estate strategy going to be measured? What factors/ indicators/measurements define success?
  • What financial constraints does the organization have?

The list goes on. When partnering with a real estate advisor, like Allegro Real Estate Brokers & Advisors, expect to come away from this second phase with a summary of your current and future KPIs and a best practice case study analysis.  

Align Your CRE Portfolio With Business Strategy   

Corporate real estate optimization is fundamental to achieving your business goals and responding to new challenges. Learn more about assessing and adapting your CRE to meet changes in business by downloading our free guide, Portfolio Optimization: The Essential Corporate Real Estate Guide

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