Real Estate Outsourcing
Enhancing Your Team to Help Meet Your Goals
The role that service providers play in the retail real estate industry today is vastly different than it was just a few years ago. Retailers are struggling with cost, expansion, and process alignment. Many retailers are asking their service providers to assume roles and responsibilities traditionally held by their internal real estate departments. In many ways, service providers are becoming much more of a strategic advisor. While retailers are often uncertain on the preferred outsource role for their service providers, one thing is certain, service providers are assuming more risk on behalf of their clients.
SRS’ Real Estate Outsourcing Platform
SRS has been providing a variety of outsourcing services exclusively to retail clients for more than a decade. SRS frequently supplies talent to its clients in an outsourced capacity to augment or replace our clients’ real estate roles. Examples include the engagement of real estate directors and managers, transaction managers and coordinators, and other roles that are critical to the execution of our clients’ real estate process. In addition to real estate roles, SRS helps define processes, deploy technology infrastructure, and identify key performance metrics and reporting requirements to ensure the successful execution of the client’s real estate plan by internal and SRS team members.
SRS can help you achieve key objectives with its outsourcing solutions:
- Lower costs and increase efficiency within your organization
- More focus on your core business and business unit support
- Consistent service across multiple geographies
- Exposure to best practices, including technology
Client Case Studies:
- Walgreens was looking to save money by creating a leaner, more efficient real estate team. SRS was hired to act as Walgreens’ outsourced real estate partner. SRS built a team of regional managers and developed a transition plan. The team is identifying target markets and intersections for expansion and identifying relocation opportunities. In addition, SRS is handling lease restructuring and extensions and idle and excess property dispositions for Walgreens.
- Shopko had the goal of opening 100 new stores in 2016. The volume of new stores and aggressive timeline were putting pressure on Shopko’s internal real estate team, so they hired SRS as their outsourced real estate partner. SRS put in place advisory and account management teams to run the account and built a team of regional managers to support site selection and transaction activities. Shopko also hired Cypress Equities to act as a preferred developer in various markets.
- Staples needed help achieving rent reductions and renewal options, creating flexibility in length-of-term, right-sizing older stores, obtaining future renewal options, and to be six months ahead of option notice dates. Since 2007, SRS has acted as an extension of Staples’ real estate department to meet these objectives on 40 to 60 assignments per year. In 2015, SRS saved Staples more than $6 million in rent and obtained $976,000 in TI allowance.
- Chevron desired to unleash capital tied up in real estate to deploy into upstream exploration. They needed to complete over $290 million in asset sales which was 10 times the amount in the prior year. They hired SRS as their outsourced partner to provide real estate management, project/construction management and portfolio disposition services. Chevron met 100% of their first-year goals and drove down costs by 20%. SRS disposed of more than 100 properties and assisted with the lease or purchase of 82 locations.
- FedEx Office desired to launch a growth initiative following the acquisition of Kinko’s. They wanted to open 2,000 new locations in multiple markets over a five year period and needed to augment their existing real estate and construction management teams. They hired SRS who worked with the client to design an organizational structure to meet their growth goals. During the first year, SRS was assigned 292 new stores over an 11 state territory. One hundred thirty nine stores were approved at committee and 63 stores opened.
- CVS/pharmacy needed to rapidly dispose of a portfolio of surplus real estate and sought an outside partner to enable them to reduce costs and time spent on non-revenue producing real estate. SRS developed property-specific disposition strategies and managed disposition activities for more than 1,200 properties saving CVS/pharmacy approximately $575 million.
- Blockbuster had an understaffed portfolio administration team and was struggling with the accuracy of data and meaningful reporting while missing critical dates and seeing an increased backlog of CAM reconciliations across a store portfolio of 5,200 properties. Blockbuster outsourced the entire lease administration function to SRS who quickly assumed responsibility for in-house administration and redefined the management structure. SRS saved Blockbuster more than $45 million over the life of the relationship.