Financial Services Client
The client’s leased portfolio consists of over 550,000 square across 49 locations with total annual occupancy expense of $17.3 million. Real Estate had historically been managed internally by their Head of Shared Services. Outside brokerage firms were used non-exclusively to assist in identifying and negotiating for leases. As the company continued to grow in 2019, a more comprehensive service offering was sought to manage all components of real estate, including, but not limited to lease administration, facility management, workplace strategy, brokerage, and project management. The Head of Shared Services had too many broader roles within the organization. Therefore, the client sought to either 1) hire a Head of Real Estate or 2) explore outsourcing solutions. Either solution would report into shared services and allow time to focus on core business responsibilities.
The client’s Chief Financial Officer and Head of Shared Services interviewed several candidates to become an internal head of real estate that could manage the portfolio as a sole focus. Vestian proposed to provide a comprehensive outsourced team that would function as a complete real estate department, reporting into shared services and finance. This eliminated the need for salary and related expense of hiring a senior, full-time employee. Specifically, Vestian offered:
An account manager with over 20 years of experience as a Head of Real Estate for Fortune 500 firms, specifically within the financial service sector. The Vestian account manager understood the client’s business, and all strategies to explore in managing the portfolio. The Vestian account manager pedigree and experience was superior to that of other candidates; and eliminated the out-of-pocket expense for salaries and benefits.
Accountability to driving strategy for all business units, establishing targets for occupancy and cost objectives, and overseeing the client’s local facility managers for maintenance and operational support.
A complete department of Vestian professionals supporting the account manager by:
- Creating test fits and space programs for all projects
- Establishing KPI’s and metrics to measure performance internally and with competitors
- Providing workplace services to advise on contraction and consolidation possibilities
- Transacting using a tenant-only approach with dedicated senior transaction manager
- Developing budgets for capital expense annually and broken down per project
- Negotiating and finalizing lease terms
- Creating schedules for construction timeline and accountability to budget
Vestian was selected as the optimal solution to better centralize and manage real estate and facilities and allowing the client’s Head of Shared Services to focus on core business responsibilities. The engagement to date has:
- Implemented lease negotiations to reduce annual expense from over $17 million to under $10 million by 2022
- Eliminated above line expense of a potential new hire
- Exceeded expectations of CFO and Head of Shared Services
- Developed remote work survey and evaluation of how and where people want to work
- Aligned remote work desires with leadership and productivity/collaboration objections
- Recommended foot-print reduction of over 40% current size