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Real Estate Portfolio Management
Author: Coralie Clément
April 2009
How to build your Business Case
Conclusion
Why do you need a Business Case?
Why do you need a Business
Case ?
• The Main Reasons :
– It helps you to make better decision and allows you to
compile in one single document all inputs linked to the
strategy of an office
– It increases the support of your project & probability of
approval
• The Business Case justifies your recommendation
• A sharp & complete presentation increases the chance of
approbation as well as enhances your credibility with
decision matters
– It can be used as a back up if you need to refer to
historical decision making
2
How to Build your Business
Case
3
Only use information that are helpful to understand your strategy
⇒ Keep your Business Case practical, simple,
visible & easy to understand
> 1st
step in the Business Case creation
Obtain BU inputs
11
Work with the Business Units in order to obtain:
• Headcount Projection
• Specific requirements (warehouse, storage, parking...)
• Technical requirements (data centre, demo areas…)
• Employee Services requirements
• Revenues Projection & BU Strategy (market strengths,
opportunities, perspectives…)
• Customer/Competitor/Partner Locations
How to Build your Business
Case
4
> 2nd
step in the Business Case creation
Needs Evaluation
22
• Summarize the current situation and if needed
do a SWOT analysis
• Evaluate the space occupancy & the need to
increase/reduce the seat capacity
• Define the level of flexibility requested by the BU
in terms of lease duration & space capability
• Review the availability of employee services
• Review the impact of technical & specific requirements
• Evaluate a few preferred location in terms of costs
& BU preferences
How to Build your Business
Case
5
> 3rd
step in the Business Case creation
Define Real Estate
Options
33
• Once the needs have been defined, it is time to
define your various options such as: renewal,
relocation, disposal, consolidation, optimization,
expansion, alternative workplace solutions such
as home working, E-Suite, virtual office…
• Define a forecasted schedule and obtain the
Capital and Expenses costs for each option
• Work with your broker to assess the market and
obtain transaction assumptions
How to Build your Business
Case
6
> 4th
step in the Business Case creation
Assess & compare
your options
44
• Assess the viability of each option financial
analysis:
• NPV/WACC Analysis ▪ IRR & Payback
• Operating Budget and P&L impacts
• Cash impacts
• Roll out Financial & other operational criteria (KPI
such as vacancy rates, location, flexibility…)
in a scorecard showing both BU & RE Corporate
objectives and evaluate the overall performance
of your options
How to Build your Business
Case
7
>
Final step before completion of the Business Case:
Real Estate
Recommendation
55
• As an introduction to your Real Estate
recommendation you can include a graph or a
paragraph introducing the Real Estate Corporate
targets ($/sqf - $/Occupant – SQF/Occupant …)
• Based on your needs evaluation and the
scenarios assessments, explain what is
your recommendation and how this one will
efficiently support the BU objectives and
contribute to the success of the company
as a whole by minimizing the risks and costs
Your Real Estate recommendation has been defined and your are now
ready to start negotiating with the Business Units and the stakeholders.
Additional TIPS
• If your recommendation is about “CHANGE” be
ready to talk about this aspect and do not hesitate to
add further back up at the end of your presentation
(examples, pilot projects, testimony of individuals
who already accepted this change …)
• It goes without saying that building positive
relationship with the Business units and
stakeholders is part of your main priorities and will
ease the Business Case discussions
8

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Coporate Real Estate Business Case

  • 1. Real Estate Portfolio Management Author: Coralie Clément April 2009 How to build your Business Case Conclusion Why do you need a Business Case?
  • 2. Why do you need a Business Case ? • The Main Reasons : – It helps you to make better decision and allows you to compile in one single document all inputs linked to the strategy of an office – It increases the support of your project & probability of approval • The Business Case justifies your recommendation • A sharp & complete presentation increases the chance of approbation as well as enhances your credibility with decision matters – It can be used as a back up if you need to refer to historical decision making 2
  • 3. How to Build your Business Case 3 Only use information that are helpful to understand your strategy ⇒ Keep your Business Case practical, simple, visible & easy to understand > 1st step in the Business Case creation Obtain BU inputs 11 Work with the Business Units in order to obtain: • Headcount Projection • Specific requirements (warehouse, storage, parking...) • Technical requirements (data centre, demo areas…) • Employee Services requirements • Revenues Projection & BU Strategy (market strengths, opportunities, perspectives…) • Customer/Competitor/Partner Locations
  • 4. How to Build your Business Case 4 > 2nd step in the Business Case creation Needs Evaluation 22 • Summarize the current situation and if needed do a SWOT analysis • Evaluate the space occupancy & the need to increase/reduce the seat capacity • Define the level of flexibility requested by the BU in terms of lease duration & space capability • Review the availability of employee services • Review the impact of technical & specific requirements • Evaluate a few preferred location in terms of costs & BU preferences
  • 5. How to Build your Business Case 5 > 3rd step in the Business Case creation Define Real Estate Options 33 • Once the needs have been defined, it is time to define your various options such as: renewal, relocation, disposal, consolidation, optimization, expansion, alternative workplace solutions such as home working, E-Suite, virtual office… • Define a forecasted schedule and obtain the Capital and Expenses costs for each option • Work with your broker to assess the market and obtain transaction assumptions
  • 6. How to Build your Business Case 6 > 4th step in the Business Case creation Assess & compare your options 44 • Assess the viability of each option financial analysis: • NPV/WACC Analysis ▪ IRR & Payback • Operating Budget and P&L impacts • Cash impacts • Roll out Financial & other operational criteria (KPI such as vacancy rates, location, flexibility…) in a scorecard showing both BU & RE Corporate objectives and evaluate the overall performance of your options
  • 7. How to Build your Business Case 7 > Final step before completion of the Business Case: Real Estate Recommendation 55 • As an introduction to your Real Estate recommendation you can include a graph or a paragraph introducing the Real Estate Corporate targets ($/sqf - $/Occupant – SQF/Occupant …) • Based on your needs evaluation and the scenarios assessments, explain what is your recommendation and how this one will efficiently support the BU objectives and contribute to the success of the company as a whole by minimizing the risks and costs Your Real Estate recommendation has been defined and your are now ready to start negotiating with the Business Units and the stakeholders.
  • 8. Additional TIPS • If your recommendation is about “CHANGE” be ready to talk about this aspect and do not hesitate to add further back up at the end of your presentation (examples, pilot projects, testimony of individuals who already accepted this change …) • It goes without saying that building positive relationship with the Business units and stakeholders is part of your main priorities and will ease the Business Case discussions 8