Shine webinar managing global real estate portfolios


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Shine webinar managing global real estate portfolios

  1. 1. Sue Buckworth, Susan Samuel and Michael Conroy Harris Eversheds LLP June 2013 Managing global real estate portfolios Strategies for managing multi-jurisdictional legal services
  2. 2. Project Managing Global Real Estate • The challenge of managing multiple global real estate deals across time zones • Ideal world: a single point of contact, your advisors are aware of and implement your requirements • The reality can be quite different: mergers/acquisitions, organic growth or centralisation of core corporate functions, with little structure in place for the appointment of external solicitors
  3. 3. Project Managing Global Real Estate In this webinar, we will cover: • Understanding the portfolio – “What have we got?” • Identifying the lawyers in each jurisdiction – “Who have we been instructing, how have we been appointing them, and how should we be appointing lawyers going forward” • Is the portfolio fit for purpose – “Does the business need space in that location?” • Forming and implementing your real estate strategy
  4. 4. Polling question Are you satisfied with the level of information held by your company in relation to its real estate? A: YES B: NO
  5. 5. Understanding the Real Estate Portfolio • Great records: copy deeds, property schedules, management files or even a property database • Incomplete records: – Rental roll – accounts – Office location map and work back from there! – Appoint external surveyors to identify what you have • Carry out a legal review of your portfolio (more on this later on)
  6. 6. How have we been instructing external lawyers to date? • Organic growth can lead to the disparate / ad hoc instruction of external lawyers • Usually local contacts are used, or lawyers are selected from Chambers guides • What have been the parameters for the appointment - cheapest or best in class? • More importantly, how has legal risk been managed in these processes?
  7. 7. Choose your preferred legal model • Find the most appropriate and effective model for your business • How? – Canvass opinion across the business – Decentralised approach – allow local business heads to appoint (but how do you manage legal risk?) – Centralised approach – lay down formal processes to appoint lawyers – Appoint a legal project manager to do it for you
  8. 8. Processes for instructing external lawyers the structure • Structure for obtaining legal advice: – a single point of contact (a legal project manager) co-ordinates appointments – a formal procedure is put in place for selecting and instructing external lawyers: • a formal tender process • standard terms of engagement • prescribe a formal reporting format and procedure
  9. 9. Processes for instructing external counsel reporting and SLAs • Reporting formats and procedures should cover: – your requirements for matter management – fee reporting – value added programmes – budget and time agreements – success criteria • Service Level Agreements: – key performance indicators
  10. 10. What is the greatest challenge to you in managing the delivery of legal services across jurisdictions? A: Disparate levels of service B: Scoping the instruction C: Understanding the market level of fee for each transaction Polling question
  11. 11. Streamlining service delivery: saving you money • Clear scope of services for each transaction • Cost transparency and certainty: fixed or capped fees? • Regular updates and progress against budget • Set out: – deal milestones/timescales (when do we need to move into the building?) – your service delivery expectations – what happens if advice is needed outside of scope?
  12. 12. Streamlining service delivery: saving you time • Client manual - sets out: – administrative steps which must be followed for each transaction – external panel firm arrangements – contact details for the legal team, secretariat, accounts, tax and insurance contacts in your business – requirements for invoicing and payments – standard form clauses and negotiating positions • Standard form documents, such as leases
  13. 13. Standardising documentation: before you begin How you will procure your next project? • Not sure yet? • In the same way as the last one? • As set out in your recent strategic review?
  14. 14. Standardising documentation: allocating your resources • No two buildings are the same – but should their contracts be? • Do you have enough resource to project manage construction projects in-house? • If you’re outsourcing project management, do you do it on a project by project basis? • Will you benefit from framework agreements?
  15. 15. Standardising documentation: leveraging your buying power • What’s your attitude to project risk? • What’s coming through your project pipeline? • Are you maximizing the impact of the global economic factors and the current market?
  16. 16. Standardising documentation: off the shelf or made to measure • Will industry standard contracts work for you? • Do you apply your own Golden Rules? • What changes do you need to make?
  17. 17. Polling question How do you identify all of the legal and regulatory requirements which apply to your company’s real estate in each jurisdiction? A: Rely on our local real estate lawyers to give us pragmatic advice B: Rely on the local business head to investigate / research the position C: Rely on real estate consultants to provide this advice
  18. 18. It’s not just about the real estate.... • Corporate entity to take the real estate interest • Business and trading licences • Employees and employment law • Pensions • Trademarks / IP • E-commerce and Logistics • Tax • Health & Safety/Regulatory • Construction
  19. 19. It’s about speaking the same language • Translation shouldn’t be a disbursement that follows down the line • You need to know the implications of having contracts in different languages so you can budget cost and time accordingly • You need to be clearly guided on the myriad other procedural points that impact you (registration, notarization, legal capacity and so on)
  20. 20. Our guide to international real estate services/real-estate-law/
  21. 21. When it goes wrong • At best – impact of timescales for the project • At worst – penalties and fines and damage to local business reputation • Sometimes there is nothing you can do, for example: – the real estate local market does not allow flexibility in leases – local law / statute – new laws arise during the contract term
  22. 22. Polling Question Is your company’s current real estate strategy about: A: Growth B: Rationalisation C: Maintaining what you have got
  23. 23. Is the portfolio fit for purpose? • “Why do we have three offices in this city?” – new customer requires a base near them – hangover from business acquisition or merger • Business drivers for change: – premises costs – require an agile workforce i.e. hot-desking – teams not communicating with each other – growth in the business – contraction in the business
  24. 24. Real estate due diligence • Legal review of the portfolio: – term – monetary liabilities – dilapidations – break clauses – liquidity of the asset – alienation provisions • The legal review will allow you to implement your real estate strategy
  25. 25. Your real estate strategy the first six months • Short term (0 – 6 months): – decide on an appropriate legal model – appoint a legal project manager – implement a process for selecting and appointing external solicitors – implement processes for document storage and records – diarise and implement key dates (ie lease expiry dates, dates for serving break notices)
  26. 26. Your real estate strategy the first year • Medium term (6-12 months): – draft and produce an SLA – implement internal fee budgeting and reporting systems – implement the SLA, fee and reporting requirements amongst external lawyers – compile and circulate internal matter reporting on current transactions – set up data sites / extranets with real estate documentation so that it is all to hand –
  27. 27. Your real estate strategy the second year • Long Term (12-24 months): – implement a key dates system across all of the portfolio – agree and implement the internal processes for notification and escalation of real estate issues / risk events – develop and circulate a legal manual to external lawyers – agree and implement a supervision protocol that works for you – arrange training on real estate issues/legal risk events
  28. 28. Keep testing the strategy... • Make real estate a rolling six monthly board agenda item • Ask the business heads what is on the horizon for their part of the business (acquisition or contraction of the business?) • Request regular updates from your external lawyers on the relevant law in each jurisdiction • Require internal legal sign offs before new real estate can be acquired or legal services can be instructed, so that you can ensure processes are followed
  29. 29. Our contact details Sue Buckworth Susan Samuel Michael Conroy Harris
  30. 30. Questions
  31. 31. Name here, Eversheds LLP Date here Eversheds LLP 2013© Eversheds is a limited liability partnership. DT02497