Shine webinar  managing global real estate portfolios
 

Shine webinar managing global real estate portfolios

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    Shine webinar  managing global real estate portfolios Shine webinar managing global real estate portfolios Presentation Transcript

    • Sue Buckworth, Susan Samuel and Michael Conroy Harris Eversheds LLP June 2013 Managing global real estate portfolios Strategies for managing multi-jurisdictional legal services
    • 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
    • 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
    • Polling question Are you satisfied with the level of information held by your company in relation to its real estate? A: YES B: NO
    • 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)
    • 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?
    • 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
    • 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
    • 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
    • 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
    • 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?
    • 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
    • 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?
    • 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?
    • 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?
    • 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?
    • 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
    • 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
    • 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)
    • Our guide to international real estate http://www.eversheds.com/sites/global/en/what/ services/real-estate-law/real-estate-guide.page
    • 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
    • Polling Question Is your company’s current real estate strategy about: A: Growth B: Rationalisation C: Maintaining what you have got
    • 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
    • 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
    • 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)
    • 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 –
    • 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
    • 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
    • Our contact details Sue Buckworth suebuckworth@eversheds.com Susan Samuel susansamuel@eversheds.com Michael Conroy Harris michaelconroyharris@eversheds.com
    • Questions
    • Name here, Eversheds LLP Date here www.eversheds.com Eversheds LLP 2013© Eversheds is a limited liability partnership. DT02497