Over the past two weeks, I wrote 7 parts for what it takes to Create a Real Estate Program. For those that prefer their materials all in one place, this summary is for you. Here, for ease of reference, I will put together the links and key takeaways for those trying to build a program for their company. It’s a hard process that many, many businesses are considering or trying to stand up. Do not feel bad if you are struggling with it, because even those that have done it before struggle.
Who is this series actually for?
Real estate teams with expensive, but opportunistic, one-off projects. Sometimes there are projects we all know need to be completed in the next two years but the cost to achieve them is beyond our normal investment thresholds requiring us to to put together a one-time initiative asking for above normal investment with the goal of generating a return for the business. This may not fit the exact way the posts were written, but it is a scaled down version of the same process.
Companies with a desire to transform their real estate portfolio through targeted restructuring efforts. This is the explicit case that led to the creation of this series. There are a lot of companies either going through or contemplating this process. It is hard. It is messy. It is not something many real estate teams have done before.
Why you should share and bookmark this post.
While the posts leading up to this are not necessarily a playbook on how to build a real estate program, they hit most of the key points on what you need to do and look out for as you go through the process. Having something to reference to at least make sure your own checklist has not missed something can be valuable. These processes involve millions, if not tens of millions, of dollars of decisions. This process should be as comprehensive as possible, and any reference that helps move you a bit is worthwhile.
This is a subject that I have lived nearly full time for the past eight years with off-and-on experience with for the decade before that. For nearly twenty years I have been helping businesses build implementable strategies and business cases for their most complex and business critical challenges. The process outlined in these posts comes straight from that lived experience.
Consulting often gets a bad wrap for creating beautiful strategies that get glowing executive praise, but then those strategies sit on a shelf because they cannot be executed. My experience comes as much from the execution side of the equation as the consulting side. The process I outline addresses the necessary, but often overlooked, role of politics in organizational decision making. It focuses on communication and stakeholder management. It ensures you have more time for the soft side of selling your program because that is what ensures your program can do what you say it can do. This is not a consulting process, it is an implementable process.
Below is a link and summary to each of the 6 parts I posted. I have tried to focus on the summary that matters for each.
Step 1 – Setting Realistic Goals for your Program
Summary | The first step is all about the importance of defining a clear rationale, specific goals, and a realistic time horizon before embarking on any projects. Real estate professionals face a shared challenge in balancing ongoing work with future planning. You should first establish the program’s overall framework and avoid getting sidetracked by individual projects. This initial strategic setup is essential for guiding all subsequent decisions and reviews, ensuring a cohesive and effective program.
Risks to Consider | The biggest risk early on is having a lack of a solid foundation due to unclear rationale or goals, which can hinder the program’s effectiveness. There is also the risk of misalignment with broader company objectives, potentially leading to program rejection if proposed plans contradict corporate financial aims or timelines. Furthermore, becoming overly focused on specific projects can derail the crucial initial setup phase, while setting unrealistic financial targets without proper justification can undermine credibility. Finally, neglecting preliminary analysis of the portfolio may lead to significant discrepancies between early targets and final business cases, causing doubt among decision-makers.
Key Outcomes | The key outcome of successfully initiating a real estate program starts with a clear definition of program success, including quantifiable financial benefits, associated costs, and qualitative improvements. This also entails establishing a defined program duration and setting specific, measurable financial targets such as annualized P&L benefits and breakdown of costs. Additionally, successful outcomes include measurable metrics like square foot reductions and improved employee experience, alongside an approved project planning methodology. Be sure to define a clear escalation path for challenges and effectively socializing the program goals to guide the team’s strategies and identify opportunities.
Step 2 – Forecasting your Opportunities
Summary | The most effective programs begin with a comprehensive review of every single site, lease, workplace, or real estate service, treating each as a potential opportunity. While this broad initial sweep may extend the analysis phase, it ensures no valuable prospect is overlooked. This systematic approach allows us to cast a wide net, capturing all possibilities before refining them into actionable projects.
Risks to Consider | The most significant risk is the potential for conservatism within teams intimately familiar with a site; they might underestimate its full potential. Always start by imagining what a site could be if designed from a fresh start to uncover significant space reduction opportunities. It is important to recognize that sites offering less than a 10% space reduction are unlikely to yield substantial savings, while those promising 50% or more are typically strong candidates. Many projects may be timing-dependent (such as subleases) which make accurate forecast timing difficult.
Key Outcomes | Take a structured approach to opportunity identification. Categorize potential projects by type, such as owned site sale/leaseback, natural lease expiry, or consolidation. After this initial classification, sort sites into High, Medium, and Low likelihood categories for becoming a program project. Those with over 40% space savings or a clear fit into defined project types are typically “High” likelihood. Finally, conduct a high-level analysis for these High and Medium opportunities, focusing on broad ranges for costs, savings, and likely delivery years, rather than pursuing perfect, detailed scenarios. Remember, this phase is more art than science. The goal is to develop a plausible overview of potential achievements without diving into individual business cases just yet.
Step 3 – Craft a First Business Case
Summary | This might be one of the most critical steps. Having established clear goals and initial forecasts, focus on integrating all the numbers, facts, benefits, and timing into a cohesive draft business case. Create a compelling and realistic presentation that will resonate with leadership, ensuring the program’s viability and setting the stage for its approval and future success. This is not a final business case, this is to aid in socializing what might be possible.
Risk to Consider | A common pitfall is either over-promising or sandbagging on potential benefits. It is crucial to find a realistic yet conservative middle ground by narrowing opportunity cost/benefit ranges as much as possible. A significant risk also lies in underestimating the inherent uncertainty of programs spanning multiple years. Apply contingency factors to your benefit and cost estimates based on project likelihood (High, Medium, Others). This accounts for unforeseen variables like business growth shifts, workforce location changes, market fluctuations, and even the team’s forecasting experience, thereby ensuring your financial projections are truly feasible and robust.
Key Outcomes | There are four essential steps to building out your business case. First, narrow down your forecast ranges to the most probable delivery scenarios, focusing your efforts on the 20% of sites that will likely yield 80% of the benefits. Second, diligently estimate risk and uncertainty, applying appropriate contingencies to your financial projections to reflect real-world variables. Third, when determining the final numbers for your business case, consider your company’s political landscape and culture. Decide whether to present a low, middle, or high-end figure based on how your leaders typically react to initial proposals. Finally, aim for a single-page business case (if possible), avoiding excessive detail about individual projects. The ultimate goal at this stage is not getting a final “yes,” but rather to present realistic, exciting opportunities that prevent an outright “no” in order to build momentum for future support.
Step 4 – Iterate over and over and over….
Summary | Prepare for the often-frustrating, yet absolutely critical, iteration phase of refining your real estate program’s business case. This is where the true effort begins, as we take that initial draft and subject it to rigorous scrutiny from business leaders and refinement from each conversation. This essential back-and-forth process is make or break for ensuring your business case becomes robust enough to withstand the scrutiny of key business leaders. It will take awhile. It will be frustrating. But it is absolutely vital.
Risks to Consider | The primary challenge you will face in this phase is the extensive iteration required with business leaders to hone assumptions and the final business case. Be prepared for a multitude of conversations, opinion vetting, and an endless stream of questions (some pertinent, some not) as stakeholders demand details that may not yet exist. They will push you to maximize benefits while simultaneously slashing costs, scrutinizing every single detail. A significant risk is moving too quickly iyt if this phase without sufficient input, which can lead to the premature demise of your program as leaders feel overlooked or unheard. This process can feel incredibly slow, with little tangible progress, and your documents will likely undergo countless revisions.
Key Outcomes | Stay grounded in strategic leader engagement. Treat every question as brilliant, even if it feels otherwise, and to embrace a slow, steady pace to ensure stakeholders are fully invested in your program. It is crucial to work with a draft and avoid any premature indications of seeking formal approvals. Demonstrate along the way that you are actively listening and incorporating feedback. This iterative process, though frustrating, is vital because challenges addressed at the draft stage are non-fatal and can be effectively accounted for, paving the way for a smoother, quicker approval process later. This phase provides an invaluable opportunity to gauge leadership support for future projects and strategically build a stronger foundation for the program, ultimately aligning it with company aspirations and enhancing your standing with company leaders.
Step 5 – Getting Program Approval
Summary | This is the pivotal stage of securing formal approval for your real estate program. While you might feel like you’ve been selling the program for months through informal conversations and iterations, the actual sign-off process is a distinct hurdle, and crucially, much of it often falls outside your direct control. Ensure you are meticulously prepared and strategicly navigate your company’s processes to gain the necessary endorsements.
Risks to Consider | A primary challenge you will encounter in seeking approval is the inherent financial nature of a real estate program, necessitating engagement with senior finance leadership, likely including the CFO, and strict adherence to their specific approval processes. You must also brace yourself for navigating the complex political landscape within your organization, where the influence of diverse opinions can be unpredictable and potentially derail your efforts. A significant risk here is the potential for leaders to push back on your carefully vetted numbers, and you must be prepared to manage and articulate material risks that could impact the program years into the future. This phase demands not only financial acumen but also considerable political awareness.
Key Outcomes | Be thorough, confident, and prepared as you seek approval of your program. Know your costs, benefits, underlying details, and rationale backward and forward with a concise, impactful supporting presentation. Be ready to definitively answer critical questions such as: What specific outcomes will the program deliver? How much will be saved, and at what cost? What is your confidence level in hitting these targets, and how will ongoing updates be provided? It is paramount to ensure that all individuals involved in the approval process are already well-acquainted with the program from the previous iteration phases, and that their feedback has been visibly incorporated.
Step 6 – Transitioning from Planning to Delivery
Summary | Welcome to the moment when your real estate program shifts from strategic planning and formal approval to tangible execution. While achieving program approval is a monumental milestone, the greatest challenge lies in successfully bringing that program to life. This is where you bridge the gap between broad strategic vision and the granular, day-to-day work of project implementation.
Risks to Consider | It can be a challenge to transition between the higher-level program that was just approved to the detailed execution of individual projects. Delivery teams often anticipate a clear list of pre-approved projects and budgets, but the reality is that the team must identify and finalize projects from scratch. All the steps to now have been about the total program, saving the individual projects to later as their specifics are dependent upon what program is ultimately approved. This can be frustrating due to the inverse relationship between the certainty of hitting financial targets and the uncertainty of the exact projects that will get us there. There is a natural hesitancy to push the business as aggressively as needed, and a significant risk that the program’s budget might be misconstrued as a general fund for “wish list” items rather than strategic investments.
Key Outcomes | To successfully navigate these challenges, focus on effective management and consistent oversight. I highly recommend an independent program manager (whether an existing team member or a third party) whose primary function is to ensure every project aligns with the program’s parameters and financial objectives, often by advocating for more aggressive approaches. This individual prevents projects from being delivered too “comfortably,” ensuring no opportunities are left untapped, and curbing unnecessary escalations. Another best practice is maintaining constant financial and project oversight: regularly reviewing leases, collaborating with accounting, and securing weekly updates from delivery teams. This consistent engagement builds credibility with senior leaders. While the program introduces new ways of working, it is crucial to integrate with existing processes to maintain consistency and speed. Demonstrate quick successes with new workplace strategies, as seeing tangible, positive change makes people far more receptive to the broader program. Despite the inherent difficulties, ultimately, delivery is what we in real estate do, making this a familiar, albeit demanding, endeavor.
Conclusion
Throughout these six parts, I have walked you through the intricate journey from setting realistic goals to transitioning into delivery. While the process of standing up such a program is undeniably fraught with challenges (from painstaking iteration of the business case to navigating unpredictable political landscapes to the gap between conceptual approval and detailed project execution) the benefits can be amazing. Going through this process represents a truly singular opportunity to materially transform your real estate portfolio, moving it into a more efficient, strategic, and creating a better future for both the company and its employees. The perseverance through these challenges culminates in a program that not only delivers significant financial and operational improvements but also fundamentally enhances the workplace experience.
When done right, this can be a great win-win-win situation.