In this article, the real estate business includes the industries and professions that design, finance, develop, construct, market, and manage land, infrastructure, and buildings. In contrast, business real estate refers to an organization’s workplaces. The choice of locations, properties, and financing methods can help or hinder a company’s strategy, raise or lower its costs, and promote or impede its productivity
Look around you. If you’re on land, you are in real estate. It is ubiquitous and indispensable. For most businesses, it is the largest or second-largest asset on the books; yet, because it is everywhere, real estate is easy to take for granted. And because it affects everyone—customers, employees, investors, regulators, neighbors—real estate is not easy to manage. My aim in this article is to distill real estate maxims that will help board members, executives, and others meet this challenge.
Business real estate is not merely an operating necessity; it’s a strategic resource. But it rarely captures senior management’s attention. In many organizations, real estate remains a reactive, second-order staff function, focused on discrete projects and deals rather than on the company’s broader strategic issues. Location and layout choices are made within business units, driven by short-term needs, and based on conventional wisdom. Proximity to headquarters can take precedence over customers’ and employees’ preferences. The five maxims discussed below—intended not for real estate specialists but for the leaders who guide them—highlight the issues that senior managers need to understand.
