SPECIAL ADVERTISING SECTION: ECONOMIC DEVELOPER AND SERVICE PROVIDER SHOWCASE

s outsourcing has become the mantra of corporate real estate, an increasing number of service providers each year enter the business of providing the critical services needed by corporate real estate departments.

   No longer confined to transaction services, third-party firms now provide global site selection, portfolio management, turn-key development and financing, and a host of other services.

   The key to effective outsourcing of corporate real estate, according to a recent study of this practice, is a tight relationship between both parties and one that is built upon mutual trust and frequent, open communication.

   Clear articulation of the overall corporate goals and strategies is a must for effective outsourcing deals, conclude researchers Karen Gibler and Roy Black in a recent report prepared for the Journal of Real Estate Research.

   The study analyzed data collected in 2000 by Ranko Bon and Rachel Luck at the University of Reading (Pa.) and Black at Georgia State University in Atlanta. What Gibler and Black found may surprise many corporate real estate managers.

   “Real estate managers and service providers do have some differences in opinions,” the study’s authors wrote. “Corporate real estate managers place greater emphasis than service providers do on the need for knowledge and skills in the areas of corporate infrastructure resource management, construction management, contract law and management, process re-engineering and design management.”

   Service providers place greater emphasis on such things as information technology skills, investment appraisal and marketing, the study found.

   As a result, said Gibler and Black, outside service providers often do not recognize the need to develop the “general business skills” that are considered essential to business success by the corporate real estate department. Instead, they tend to focus on traditional real estate tasks.

   “In such cases,” the study noted, “a company relying on real estate service providers may have difficulty getting the consultants to buy into the company’s strategic plans as a partner. The service providers may behave in a more traditional, task-oriented approach to real estate problems rather than helping firms make strategic real estate decisions.”

   The authors’ advice to corporate real estate managers? Make sure you are “on the same page” as your service providers by ensuring that they fully comprehend your strategic goals and objectives; make sure they understand your corporate culture; look for service providers with similar belief structures; and finally, use caution in determining the appropriate level of outsourcing for your real estate services.