The top 4 challenges with current CRE performance metrics
Corporate real estate (CRE) leaders are moving from tactical to strategic approaches in a post-pandemic world. Fifty-five percent of office-based employees are currently doing hybrid work, and only 11% of employers are not offering any sort of hybrid option, which has a significant impact on how companies operate and meet their goals.
As a result, there are limitations with current performance measurement frameworks and a need for transformation in real estate. New metrics that matter reflect the shift in changing organizational priorities and represent the evolution from activity-based metrics to value-based metrics.
According to JLL’s latest Metrics that Matter report, current performance measures are disconnected from the future of work reality and not fit for the purpose. This assertion is validated by 42% of CRE leaders who said they only capture and report data intermittently. In particular, many existing measures are less relevant, while better metrics are needed in what are now more relevant areas. For example:
- Density and occupancy are no longer as relevant as true measures of operational excellence given the shift toward hybrid working. Instead, 65% of CRE leaders are operationalizing hybrid-work models to support agility and flexibility.
- Traditional metrics like space utilization are now augmented by metrics that measure how real estate and facilities are being used in real time. For example, organizations are now focusing much more on providing improved workplace experiences.
- New regulations and transparency in reporting with regard to sustainability are driving the need for better metrics. Organizations are setting ambitious net zero carbon targets, which require measuring, managing, and tracking performance against their environmental and social goals.
- While adoption of CRE technologies is on the rise, harnessing data and analytics for data-driven decision-making remains a challenge. Organizations that build a metric-driven culture to empower data-driven decision-making in real time will future-proof their businesses and drive the future transformation of their portfolios.
Although a number of CRE organizations continue to use some traditional metrics, many have been broadened to capture real estate’s impact on new enterprise priorities and represent the collective efforts of multiple parts of the organization, such as HR, finance, and IT. In addition, almost every area of real estate is embracing digital transformation, which makes it possible to generate more superior and sophisticated performance metrics, including real-time and predictive insights.
Learn more about the metrics that matter: