What is the difference between a tactical and strategic approach to real estate planning?
There’s a saying: ‘If you don’t know your destination, any road you take will work.’ The tactical transaction-based approach to real estate planning focuses on a specific activity, one deal at a time. The strategic approach focuses on the destination — real estate cost as a percent of a company’s revenue. You could complete an effective real estate transaction and negatively impact the company’s bottom line because your focus is not aligned with the overall company strategy. For example, a client is looking for a location to operate a call center. The general operating margin on a call center is less than 10 percent. A real estate services firm could identify and fitout a site for a client that is not the best solution for that business need, and the company will lose money on the call center business. The ideal approach is to develop a company-specific real estate decision support model, which can be used to identify the appropriate cost/space metric that will positively impact the bo
