Trend 2: Increased demand is leading to faster-paced evolution of corporate real estate (CRE) outsourcing

High demands on in-house CRE teams are driving rapid growth in CRE outsourcing across more geographies, functions and corporations.

Companies continue to seek innovative CRE delivery models that harness greater strategic contributions and deliver best practice. A growing number of new companies are taking varied and sometimes innovative paths toward strategic outsourcing. The majority view outsourcing as a partnership, and more and more are involving procurement in CRE decision-making.

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TREND 2 KEY FINDINGS

  • Amplified by the emergence of a broader strategic CRE agenda, capacity caps and skill gaps within many in-house CRE teams have, in turn, fuelled growth in the CRE outsourcing market. Gaining momentum since 2011, this tendency will continue over the next three years and is now moving at a much faster pace.
  • CRE outsourcing is gaining traction across more geographies, industry sectors and corporations. Only 8% of companies have not outsourced any aspect of their CRE function, a big drop from 24% in 2011. This indicates that CRE outsourcing is quickly catching up to other outsourced functions—such as IT, HR and finance—that are seen to be further along the outsourcing curve.
  • Most companies firmly view outsourcing as a long-term, strategic relationship seeking to add value rather than a price-driven, tactical transaction. This holds true regardless of whether or not they are currently heavily outsourcing CRE service delivery. These companies use outsourcing to draw upon expertise and skill sets not available within their own organizations and release internal capacity to focus on addressing strategic pressures.
  • This strategic viewpoint is important given the increasing role that procurement plays in the CRE buying decision. There is a perception that procurement teams lack understanding of the characteristics of CRE services, and a growing risk that these qualities will be overlooked in a price-driven procurement process.
  • Procurement involvement may hinder the strategic influence of CRE teams. As such, there is an urgent need for the CRE community to educate and clearly articulate their value proposition.
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Risk: Undervaluing external contributions

Key Statistics

Current attitudes toward CRE outsourcing

The role of procurement in CRE

Few companies deliver real estate services fully in-house today