HOW AND WHEN TO MOVE FORWARD WITH TRANSACTIONS?
Many occupiers are asking where and when to pick-up with the implementation of transactions now that we are transitioning back to a new way of working. In our previous article, we noted the way businesses occupy real estate portfolios in the “new normal” could change dramatically. Actions that were planned or started pre-COVID-19 now have questions around their relevancy.
Whether it is remote work, the reconfiguration of your office, future workplace standards, distributed work patterns or questions of onshoring or relocation, every project should be analyzed for its fit relative to implementation as well as its alignment to the business.
FOUR FILTERS TO ASSESS CHANGE LEVELS
Our teams have identified four primary considerations for you to assess how to move ahead.
Transaction Analysis Scorecard
- Business Fit – The first criteria to examine is whether the business has shifted its operations and occupancy needs. Will the business rely more heavily on a distributed or remote work strategy? Has the business downsized or pivoted to a new model? Advising on these issues and asking provocative questions is the first thing you should do with your business partners. If the results point to a change, pause and re-evaluate the scope of the project and re-think the options.
- Risk – After assessing the impact of changes to the business and workplace, you should undergo a risk assessment that focuses on business continuity and the degree of change that will impact the project. Depending on the risk associated with business disruption, you will have amended the scope and timing of the project and ultimately looked for alternatives. An important area to address is the stage of a project and the status relative to the alignment of the business needs. If the project is near completion and the business requirements have changed, you should prioritize developing a remediation plan with your businesses to assess the impacts of proceeding with completion of the project. This should include analysis of the required workplace and specific space changes, capital and operating expenditure impacts, project change-orders and post-completion changes.
- Finance – Re-evaluate the status of financial goals and budgets for all projects. Confirm with your finance leadership and the business units that the projects’ previously determined levels for capital and operating expense requirements have not changed. If the budgetary goals have changed, you should go through a scope assessment to determine the degree of change required in order to continue with a project. This can range from minor scope adjustments to total project restructuring.
- Location – Now that work and the place where work gets done could shift, you should assess the viability of the proposed location for the project. If in the pre-execution phase, you should consider changing location requirements due to the evolution of your company’s people strategy and the locations you are seeking to access talent. If there is uncertainty relative to the longer occupancy strategies, you should analyze your current or proposed lease and assess whether you have adequate flexibility to move forward.