Corporate Real Estate (CRE) executives play a much different role within their companies than they did 20 years ago.

Today’s CRE executive has broader responsibilities and direct accountability for ensuring that the corporate real estate portfolio supports the company’s strategic and operational objectives. Given recent advances in technology, sophisticated commercial real estate advisors have risen to the new challenges faced by their CRE clients.

Technology is enabling the development of new analytical tools that allow real estate advisors to deliver better information to tenant clients. The result is that CRE executives are empowered to make smarter, data-driven real estate decisions that can withstand executive and board-level scrutiny.

In today’s knowledge economy, a key driver in real estate portfolio management and facility location strategy is the attraction and retention of employees. Companies will go to great lengths to locate facilities in areas with access to target labor markets. When relocating an existing operation, companies seek to avoid losing employees. Not only is employee loss disruptive, but the cost of losing an employee can approach 150 percent of the employee’s annual salary, due to lost productivity, recruitment, training and other related costs.

Commute Time Analytics

Sophisticated real estate advisors have taken notice and are using cutting-edge technology to help tenant clients of all sizes manage attrition risk when relocating corporate facilities. In this role, real estate advisors are interfacing with not only their client’s internal CRE counterparts and the chief financial officer, but also working closely with the chief operating officer and human resources executives to compare alternative locations and mitigate the risk of employee attrition.

The geo-analytic tools used to quantify employee attrition risk include GIS applications and digital map databases. Using these tools, advisors consult with tenant clients, creating sophisticated models of employee commute patterns and analyzing how patterns would change if the company were to relocate to any one of the alternative locations under consideration in the real estate search.

This commutation analysis may be focused on an entire employee population, or alternatively, a subset of the population. This is particularly important when a company has key employee groups with deep organizational knowledge or niche technical skill sets that are difficult to replace.

For example, it could be detrimental to a technology company to lose seasoned employees in a highly-technical R&D department. In these situations, it is critical to have a solid understanding of how relocation will impact employee commute times.`

While employee retention is a key driver in a corporate relocation decision, employee attraction is a focus when deciding where to locate a new operation. Technologies employed to optimize the location of a new operation include GIS-mapping programs and geo-demographic databases. Taken together, these two technologies enable CRE advisors to define the geo-demographic characteristics of their client’s target employee population, and highlight the neighborhoods, towns and regions where potential future employees reside.

This analysis enables a company to understand which locations will be most accessible to target employees. Whether analyzing employee attraction or retention, as described above, sophisticated advisors will go to great lengths to understand how the public transportation network will impact employee commute patterns in various alternative locations.

Real estate professionals have developed detailed HR analysis capabilities to help tenant clients make informed location decisions that are supportive of HR goals, and backed by objective, quantitative analysis.

Real estate professionals are utilizing the same technologies that support our navigational devices, iPods and Location-Based Services “apps” to make smarter real estate decisions that can positively impact a company’s bottom line. These real estate decisions support the corporation’s HR strategy, enhance quality of life for employees, and help minimize the environmental impact of carbon emissions.