Conducting commercial real estate (CRE) portfolio optimization is a multistep process, and the time commitment required varies based on objectives, breadth of the portfolio, and other issues like the availability of robust real-time occupancy and utilization data from all areas. The first step of the process is to define objectives for the portfolio and set quantitative targets on metrics like office space and resource capacity utilization. The output here is a set of goals and standards which can be applied to all holdings in the portfolio.
The second step is to evaluate the performance of the existing portfolio. This involves conducting a detailed analysis of each property’s occupancy, resource utilization, employee and team feedback, financial performance, including income, expenses, and overall value.
The third step is to identify areas for optimization within the portfolio. This can include identifying underperforming properties, determining the best courses of action to address shortfalls, and evaluating the potential for cost savings.
The fourth step is to develop a strategy for portfolio optimization. This can involve a range of activities, such as identifying new investment opportunities, disposing of underperforming assets, and optimizing space utilization within existing properties. Property managers may also consider strategies for managing risk, such as diversifying investments and developing contingency plans.
Finally, ongoing monitoring and evaluation are essential for successful portfolio optimization. Property managers should regularly review the performance of the portfolio and make adjustments as necessary. This can include adjusting investment strategies, reevaluating individual properties, and making other changes to improve the overall performance of the portfolio.