2nd QUARTER 2014
43
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ANDREW ZEZAS, SIOR
CEO, Real Estate Strategies Corporation
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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 North America 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.
Figuring It Out...First!
Don’t enter into real estate negotiations without a plan
T
oo many companies run headlong
into real estate transactions without
completing sufficient due diligence.
Whether buying, selling, leasing, or
otherwise, corporate real estate transactions
for all property types often include myriad
details, like any other complex business
deal. Putting the pieces together as you go
is not an optimal approach to any initiative,
and often results in missed information,
last-minute decisions, distractions, and
increased risk. Sometimes there are
pitfalls like engagement of ineffective
service providers, lost opportunity, and
additional cost. Intelligent planning, not
just about property types, prices, and terms,
but focused on operating and financial
requirements, stakeholder objectives, M&A,
business exit strategies, and more, all serve
as keys to successful undertakings of any
kind, especially those as critical to most
companies as their underlying real estate.
For some reason — call it arrogance, or
call it a can-do attitude —when the
best-run companies
recognize that an entire
industry of real estate advisors
and service providers are
at their beck and call, some
companies still prefer to engage
in multimillion-dollar real estate
transactions without the
benefit of expert guidance and
without first determining the
optimal approach to achieving
their objectives.
Heck, some companies enter into
real estate negotiations without even
knowing their own business objectives!
That happens less and less these days
as more companies are led by prudent
executive management. However, it still
happens and amazes me when it does.
Let’s face it: Stakeholders demand that
management rely on expert advice and
quality guidance when making command
decisions. That goes for all substantive
initiatives. So, why should real estate be
addressed any differently? What great
company acquires anything that has a
cost in the millions of dollars and that
can impact operating efficiencies and
profits for years to come, without first
determining what they need and how
to acquire it? So, I ask you again, why
should real estate, that underlying asset
(or liability) that most certainly affects
a company’s ability to conduct business
and earn profits, be addressed without
the same due diligence and intelligence as
other acquisitions?
Using qualified
internal or external
expertise, figure out
what to do before doing
it. That is always an optimal
strategy. Prudence demands
that management not take
chances with important assets,
and that includes executives’ time
and resources, and the company’s
real estate. The most effective and
successful business leaders recognize
that planning first, determining the
company’s true goals, understanding the
costs and risks along with the likelihood
of success or failure, and then figuring
out the most effective means of achieving
those goals more often than not ensures
optimal outcomes. So, go figure it out first,
and only then, jump in with both feet.
C
SOME COMPANIES
ENTER INTO REAL
ESTATE NEGOTIATIONS
WITHOUT KNOWING
THEIR OBJECTIVES
