38
1st QUARTER 2014
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ANDREW ZEZAS, SIOR
Real Estate Strategies Corporation
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Preparing for Growth
Real estate as a catalyst for growth
G
iven how rapidly business moves
these days, and considering the static
nature of commercial real estate, pru-
dence strongly suggests that advance
real estate planning is in order when CFOs
anticipate any operating or financial growth.
The most practical view in support of
growth plans may not be that your company
will have an abundance of real estate oppor-
tunities available to it in properties that will
accommodate all of its needs. With little new
construction having been completed in most
regional real estate markets over the last half-
dozen years and demand having increased,
many markets are now either experiencing
or are on their way to becoming supply
constrained.
While some regional commercial real
estate markets continue to offer sufficient oc-
cupancy alternatives, others are experiencing
strong demand and a declining supply. For
example, in Manhattan’s office market, rents
continue to rise and tenants currently com-
pete for available space. In Chicago suburbs,
distribution centers larger than 100,000
square feet are becoming scarce, as are large
blocks of office space in the center city. In
New Jersey, distribution buildings of that size
are very challenging to come by near Port
Newark, yet for various reasons a multitude
is available at low rental rates near Turnpike
exit 8A. Large blocks of class A office space
greater than 200,000 square feet are more
scarce throughout the state.
When planning for growth, CFOs should
consider the following questions:
n
Does your portfolio of occupied properties
contain surplus space in other locations that can
take up the slack associated with future growth?
n
Can restructuring real estate leases now,
even those that were previously restructured,
result in opportunities to protect your com-
pany’s future growth needs?
n
If your company acquires additional facili-
ties now, can it secure future growth rights
and flexible lease terms that would delay
certain costs?
n
Can consolidating multiple facilities create
greater economies of scale and opportunities
to support growth?
n
If still in cost-control mode, can your com-
pany dispose of smaller amounts of surplus
real estate, as a hedge against future growth?
n
Should your company be looking further
out into the future regarding the acquisition,
disposition, or restructure of its occupied real
estate as a means of growth planning?
n
Would an alternative real estate control
structure generate greater growth opportuni-
ties for your company?
n
What other steps can your company take
to reduce waste and control costs?
For many companies, 2014 may well be a
breakout year of growth. The most effective
CFOs will plan intelligently for how their
companies’ real estate will promote operat-
ing and financial opportunities and will
ensure success.
C
Andrew Zezas, SIOR, is the award-winning CEO of Real Estate Strategies Corporation, a
NJ-based real estate advisory and transaction services firm that advises and represents only
corporate occupants in the acquisition, disposition, and restructure of occupied real estate in
markets throughout North America. Licensed in 9 states, having completed engagements in
31 states and 5 Canadian provinces, and having represented the U.S. real estate
interests of companies from 14 countries, the firm offers sophisticated real estate services
and M&A support, and is most often engaged by CFOs, General Counsels, and other
management team members. Visit
or call 732.868.000 x111.
