2013 Best Practices Index

Be sure to tune into this month’s research podcast discussing the current best practices in commercial real estate.

Business is all about getting better all the time and finding ways to be more efficient and effective when providing services to clients. Nowhere is this more evident than in this month’s CPE-MHN Index to Best Practices in Real Estate. It is not unusual for firms to focus on what they know best, and across the spectrum of possible lines of business, nearly all of the responding firms showed some level of improvement in their core pursuits. Perhaps more interesting, though, was the varying way the firms expanded their businesses to include a more comprehensive set of service offerings. Given that competition in acquisitions and development is substantial, being better and utilizing best practices offer firms the possibility for future success. Best practices are, in our view, both a current cultural shift toward doing everything better and also an important investment in the future, in terms of sustainability, growth and market share.

The survey results reflected the viewpoints of firms in property operations and ownership in the office, retail, industrial, multi-family, hospitality, student housing, investment management and other sectors. Responses indicated that they made acquisitions of other entities, added services including investment banking, sold out of categories they felt were at their peak in value, broadened their appeal by re-investing in new sectors and generally redeployed capital to gain market positioning.

One of the best-practice strategies they reported was the addition of programs in sustainability, which now includes charitable activities, socially conscious employee participation and, in some instances, the addition of causes and actions more local to where the firms have offices. It seems the firms all believe that giving back is the key to looking forward.

Methodology

This month’s CPE-MHN Index to Best Practices in Real Estate was based on evaluation in three separate areas. First, the overall change in performance of every firm, based on number of offices, revenues, time in business, number of employees and turnover. Second, the types and concentration of activities in various regions, comprehensive nature of services and percentage of activities by sector served. Finally, the number of square feet, units and facilities in each portfolio; areas of specialization; and financial activities. Each of the areas was assigned a weighting relative to its degree of importance to the firm’s success, followed by an examination of supplemental information provided on best practices, innovation, charitable participation and other supplemental data.