What are the most important qualities in a corporate real estate service provider? by JEB ATKINSON editor bounce@conway.com Jeb Atkinson is Vice President of Corporate Services for ProVenture Corporate Real Estate in Brentwood, Tenn. He is also a member of the Industrial Asset Management Council. “I ndustry Expertise." "Global Breadth." "Client Focused." You hear these descriptions often, but what do they mean? More importantly, are these true qualities in a top- notch service provider? Is a global provider superior to a smaller boutique shop? These days, qualifying corporate real estate service providers is a different ballgame. The players are new, and the defining characteristics have shifted.    The first step for corporate decision makers is to define the "service provider" entity as it specifically relates to them. Is it one person, a group of people, one local office? Ask the question, "Who is going to be solely devoted to my needs and projects?" The reality is that, from the client's standpoint, the provider is only as strong as the account manager and primary team members.    The account manager and team must have experience, not just relationships, with the best service provider(s) in each local market in which the service is provided regardless of company affiliation. The lead account manager must play an integral role with the local teams on the ground on every project in order to effectively manage the process, motivate team members, and know the capabilities of those individuals. Therefore, the litmus tests of performance capabilities and qualities must be applied to the service provider as defined.    Once the physical nature of service provider is defined, the question of qualifying the provider is next. Though individual specialties, experience arenas, and relationships are important, the single most vital feature of a first class corporate real estate service provider is its ability to understand and incorporate the objectives and strategic initiatives of the client's CEO, CFO, COO, and CIO into the corporate real estate decision making process. How Much Is It Costing Me?    Most corporate real estate departments generally operate under Finance & Administration or Legal departments. That said, a quality service provider must be able to recognize what the client's real estate is costing them and fully understand the client's cost exposure, from repairs and maintenance to operating expenses and management fees – across the portfolio.    The provider's ability to identify the comprehensive cost of real estate as a component of the client's weighted average cost of capital (WACC) is an essential quality. At least one member of the service provider team should have an intimate knowledge of the global capital markets – both institutional and individual ownership. Regardless of the client's lease vs. own preference, the provider should have multi- market experience with institutional insurance/pension funds, REITs and merchant developers to maintain perspective on the analysis. Understanding the value of the client's lease to the landlord and knowing how the different investors underwrite assets are critical components in a service provider's ability to recommend business terms.    Recognizing the relationship of transportation and labor costs to a company's overall occupancy cost, a premium service provider should also be proficient in finding ways to offset these costs, whether through internal overhead reduction, economic incentives, or capital market influence. Doing Business in Space and Time    Construction management and facility engineering are critical components to the service provider team. From a site's utility infrastructure, IT capabilities and limitations to a building's clear height and column spacing, the provider's ability to fully assess the physical aspects of the property is vital when determining whether a project's deadline is met or not.    The implementation and operations components of the client's business deal with timelines. A service provider that can effectively translate existing site/facility characteristics into project timelines and can manage and synchronize all team members involved is an invaluable asset to the client. Engineering the Exit    In new construction projects or large acquisitions with specialized improvement buildout, unfortunately, exit strategy often seems to be the last item on the list. Though it is clear that the purpose of any facility is its contribution to a company's primary operation, an experienced service provider needs to be instrumental in employing an exit strategy in the early project phases such as site selection and facility design.    For some operations this is impossible. For most, however, a marginal amount of mainstream design and investor appeal on the front end could significantly ease the pain should the client's strategic direction shift in the future. All Pieces in Place    The fact of the matter is that real estate, directly or indirectly, affects all facets of a corporation.    Whether the client is privately held or publicly owned and bound by SOX compliance measures, a leading real estate service provider must fully comprehend the financial, physical, strategic, and legal aspects of every project and incorporate each component into a systematic procedure to ensure consistency and accountability, from site selection to disposition.