Commercial Real Estate sits in the middle of everything a business does. With that said, every business leverages their real estate differently. Some treat it as a financial cost center, others as an operational lynchpin, some have real estate floating out as its own thing, and still others as a hybrid between these. There is no right way to manage your real estate, but there are several wrong ways.
The question you must ask yourself is who sits at the ends of the chains connected by your real estate? These two sides are both customers of the real estate function. Neither is more or less important, but they have competing needs and requirements that must be balanced.
For a retail location, you are connecting your sales to your customers. For a warehouse, you are connecting your manufacturing with your retail outlets. For a headquarters, you are connecting your corporate functions to the rest of your business. Other types of offices could have many types of connections to clients, the market, other businesses, etc.
Real estate is the ultimate in balancing conflicting requirements. If money wasn’t a requirement, every single employee would be given the workplace environment that most makes them productive. However, money and location are extremely limiting factors in all real estate decisions.
Money is the biggest limiting factor as the office must be built to last for a relatively long period of time. Location is a close second, I debated making it the biggest factor but never quite convince myself to pull the trigger. There can be no “perfect” real estate solution because of these built-in factors. The best we can do is to be optimized given the various limitations.
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