Question 2: Are we actively managing our lease obligations?

In addition to the analysis provided in the article, CEOs should know whether the corporate office leased space is fully utilized. Are you aggressively questioning the utilization of your space and proactively identifying the leases we can reduce or eliminate altogether? Does vacancy exist within the leased portfolio that could be purged, thus minimizing the impact of the FASB 13 changes? Have all types of vacancy been considered: vacancy that results from space hording (often upwards of 20%), vacancy planned for growth that will not be realized in that location, and vacancy that exists due to mobile employees?

Question 4: What is our key metric for evaluating occupancy costs?

For corporate office space, CEOs should know the effective utilization rate (EUR) of each facility. Client-focused research has revealed the EUR range over the period of one year to be from 80 to 40 percent, meaning 20 – 60 percent of corporate office space is vacant over the course of one year. Systematic, continuous measurement of utilization is required to understand the peaks and valleys of utilization and execute a plan that optimizes the space based upon the other metrics mentioned in the article. An optimized portfolio can yield upwards of 20% reduction in real estate operating expenses.

Question 6: Who is helping us?

Utilization measurement is not a one-time, one-size fits all, assignment. Data from disparate systems must be collected to report the on-going utilization of space. This information enables the prediction of space requirements based upon worker type in addition to other factors such as location and space type.