PQI[1].pdf

PQI - Your New Business Intelligence Platform

3. Tools & Technology

1. Key Performance Indicators (KPIs)

2. Portfolio Quality Index (PQI)

4. Panel discussion

PQI- Your New Business Intelligence Platform PQI- Your New Business Intelligence Platform

Simon George Director, Corporate Real Estate

Redhat Incorporated

Tim Markham Sr. Director - Workplace Resources,

Travel Services & Safety

IHS Incorporated

Karen Burkhart Dick Leader, Global Real Estate

Equifax Incorporated

2 PQI- Your New Business Intelligence Platform


COST vs VALUE

3

value worth or usefulness

( + )

PQI

cost amount paid to obtain

( - )

KPI

PQI- Your New Business Intelligence Platform


3 Steps in business intelligence

KPIs

PQI


3 Steps in business intelligence

5

data & metrics KPIs $ PSF % Utilization Cost savings

55 30% precipitation

information

Market benchmarks Performance

measurement

Ratios Analysis

Its going to be

rainy and cool

knowledge

You should bring a light

sweater and an umbrella

Provide insight Promotes options Gamification Future proofing Decision support Guidance


What is a Portfolio Quality Index (PQI)?

6

Shifts the focus from individual Key Performance Indicators

to

a multi-dimensional prioritization tool for decision support

technical

difficulty

style

artistry


PQI- Your New Business Intelligence Platform PQI- Your New Business Intelligence Platform PQI- Your New Business Intelligence Platform

Steps to developing a PQI


Identify

KPIs that

are

measurable

and

impactful

to the

business

and real

estate

1

Select the

KPIs that

are most

important

to your organization

tied to business performance

2

Weight the

KPIs in

order of

importance

3

Score the

outcome

4

2 1

3

Prioritize

actions

5

X


Core CRE KPIs

8

Total Occupancy Cost Cost/SF $/Seat Capex Performance

Cost Savings Targets Cost as % of Revenue Sales/SF Contract Value

Financial

Customer Satisfaction Employee Satisfaction

Score

Subjective Rating of Space

Employee Engagement

Customer

Satisfaction

Occupancy Rate Utilization Rate SF per Employee SF per Seat Office to Workstation

Ratio

Warehouse Utilization Productivity Rates

Utilization/

Efficiency

$/SF Rent Market Vacancy Rate Capitalization Rate Market Volatility

Market

Performance

Transaction Quality Cycle Time Lease Flex - Turnover

Rate

Lease Flex - Options Lease Term Length Subjective Rating for

Lease Restructure

Operations Criteria

Carbon Footprint Energy Efficiency Energy Conservation LEED Certification Public Transportation

Proximity

Sustainability

Metrics


2 1 3

X


Benchmark Data


2 1 3

X


Sample Portfolio Benchmark Data


2 1 3

X


CoreNet SPP Survey Results

11

What KPIs and metrics are important to managing your organization? 400+ responses


Size/FTE

Occupancy cost / SF

Productivity

Client Satisfaction

Cost Savings

Workstation Density

Revenue SF / FTE

Occupancy Cost / Total Cost

ROI

Cost / % of Revenue

0% 5% 10% 15% 20% 25% 30% 35%

2 1 3

X


Sample Executive Dashboard / KPIs


2 1 3

X


Low Score

High Opportunity

Sample PQI

13

Target

Building Vacancy

Rating (5%)

Market Vacancy

Rating (5%)

Occupancy

Cost PSF

(25%)

SF per FTE (20%)

Subjective

Rating of

Space (5%)

% of Current Market Rent

that our Existing Rent is

Above Market (25%)

Utilization Rate

(15%)

Select KPIs &

weight

Status London

New York

Chicago

Frankfurt

Beijing

Hong Kong

Singapore

San Jose

Sao Paolo

Mexico City

Prague

Brisbane

Paris

Score &

Prioritize


9.0

8.5

8.0

8.0

7.5

7.5

7.5

7.0

7.0

7.0

7.0

5.0

4.5

Optimal

Mid

Needs

Improvement

0 2 4 6 8 10

High Score

Low Opportunity

Mid Score

Mid Opportunity X

2 1 3

PQI- Your New Business Intelligence Platform PQI- Your New Business Intelligence Platform 14 PQI- Your New Business Intelligence Platform

MARKET RISK

FACILITIESCOST PSF

FACILITIESCOST PER

SEAT

OCCUPANCYRATE

SF PER SEAT

UTILZATIONRATE

Optimal Property Below Current Market (-15%)

Needs Improvement 55% Best-In-Class 85% 90%

Optimal $45.00 Best-In-Class $55.00

Optimal $7,750 Best-In-Class $8,000

Site A Leased Portfolio Quality Index

NEEDS IMPROVEMENT

AVERAGE

OPTIMAL

Needs Improvement 200 SF Best-In-Class 150 SF

Location Portfolio

Needs Improvement 50% Best-In-Class 90%

Strategic Options

0-1

2

Mo

s.

12

- 2

4

Mo

s.

24

+

Mo

nth

s

No-

Change

Renew

Re-gear

Sublet

Reduce

Expand

Co-locate

Relocate

Terminate

Dispose

Action Plan

Early termination right allows for termination with

6 months prior notice

Relocate to downsize and decrease overall obligation

due to low utilization rate

of 50%

A. Early terminate and relocate

Monitor trends in advance of the current leases expiration date

C. Monitor market for

opportunities

Give back space to landlord Re-gear build-out to be more

efficient

B. Reduce and re-gear for

long-term strategy

Scenario Planning Action Plans Site A

X


Horizon Action Plan

15

Red Hat - Core Sites Action Plan

LEASE SPACE STATUS/ SCENARIO SCENARIO

CORE LOCATION EXP UTILIZATION PRIORITY ACTION OPTIONS 0-12 MONTHS 12-24 MONTHS 24+ MONTHS

RENEW &

EXPANDA

Begin due diligence for immediate negotiation for renewal option in existing space as well as

immediate examination for expansion with Raycom and adjacent properties. u

RENEW & CO-

LOCATEB

Begin due diligence for immediate negotiation for renewal option in existing space as well

asmoving non-site critical engineering functions (GSS) to sales office in Park View Green . u

RELOCATE CInitiate discussions with Engineering Planning about expansion to 2nd tier city for potential

expansion. u

RENEW &

EXPANDA

Analyze renewal option given the TI dollars invested in the property as well as it being an

exceptional location and meets future expansion needs no current expansion options in building

also initiate immediate expansion search for new location move GSS, Ops & IT into adjacent

building, Location needs to accommodate future consolidation option when 2017 lease expires

Ideal location.

u

EXPAND &

RELOCATEB

Begin immediate expansion search for new location move GSS, Ops & IT into adjacent building,

location needs to accommodate future consolidation option when 2017 lease expires Ideal

location. Examine phased re-location strategy at end of 2017 lease, viable options near the current

location with good incentive opportunities. Terminate lease at end of term. Building highly inefficient

and does not accommodate future growth projections.

u

RENEW &

EXPANDA

Analyze renewal option depending on expansion capability within the current location. Monitor

availability within the building ideally floor. Examine opportunities for expansion/swing space in

bldg (nothing currently available) or adjacent to building to meet expansion in next 12-15 months.

Consider a phased move depending on location and space type. u

EXPAND &

RELOCATEB

Examine phased re-location strategy at end of 2014 lease. Capex is in budget for relocation option

if needed. Look for expansion/swing space in bldg (nothing currently available) or adjacent to

building to meet expansion in next 12-15 months. Consider a phased move depending on location

and space type. Terminate lease at end of phased move depending on re-location strategy.u

RENEW A

Analyze renewal options depending on status of future headcount projections and lower cost rate

structure. Polycom leaving building in 2012, potential option for growth. u

RELOCATE B

Lease expiration of 2014. Due to building inefficiency and projected growth, examine options for

space relocation. Need to confirm first right of refusal on 9th floor. u

RENEW &

EXPANDA

Analyze renewal option depending on expansion capability within the current location. Examine

expansion/swing space in bldg (one floor may become available) another tenant has first right of

refusal. Potential for relocation of FTEs to Bangalore. In Western Office Park there are few

expansion opportunities available highly sought after.u

RELOCATE B

Analyze phased re-location strategy at end of 2014 lease (2017 lease expiration). Discuss over

next 12 months right to terminate lease in 2014 (2017 lease expiration) depending on re-location

and off-shoring strategy by business units.u

FY2012: 70%

FY2013:78%

FY2014:99%

FY2015 117%

PUNE

BEIJING-

RAYCOM

TIMELINE FOR ACTION PLAN

ACTIONS

FY2012: 76%

FY2013:122%

FY2014:140%

FY2015 157%

FY2012: 91%

FY2013:129%

FY2014:144%

FY2015 159%

FY2012:103%

FY2013:121%

FY2014:135%

FY2015 143%

FY2012:73%

FY2013:81%

FY2014:92%

FY2015 100%

2013

BRISBANE 2017

TOKYO 2014

2017

SINGAPORE 2014


Delhi

Shanghai

Tokyo

Sydney

Site ABC

Sydney (ABC)

(ABC), Fin &

3-5 year portfolio lifecycle plan Align with capital and operational financial planning Revisit semi-annually / annually and ensure the plan is aligned with the business


Confidential Document

This information includes confidential data and material that may not be duplicated,

used or disclosed, in whole or in part, for any purpose other than the evaluation of

Colliers by the intended party, without the prior written consent of Colliers International.

October 20, 2014

Documents

PQI[1].pdf