5 Ways CRE Professionals Can Reduce Total Cost of Occupancy (TCO)

 March 13, 2023

By  Guy Gray

In a perfect world, a commercial real estate professional’s total cost of occupancy (TCO) would be at a manageable level—with minimal effort required on the part of the professional.

Unfortunately, this world isn’t perfect.

Inflation, employment changes and other challenges can wreak havoc on efforts to reduce occupancy costs. The good news is that there are a few ways to get ahead of the game and make high-impact moves while reducing TCO. 

5 Ways CRE Professionals Can Reduce Total Cost of Occupancy TCO Five ways CRE professionals can reduce total cost of occupancy:

1. Rethink Your Spaces

The new hybrid work environment is here to stay in some capacity within some businesses and industries. While remote work will ebb and flow, commercial spaces will never be used the same way again. Does this mean you need less space or that you need to downgrade? No. But it does mean you can get more inventive with how you use your commercial spaces—there are lots of opportunities for culture, workload and perk improvements.

2. Free Up Your Capital

If capital is “trapped” in your balance sheet, there are ways to free and strengthen it. Consider implementing sale-leaseback initiatives and strategies that reduce your expenses and increase your flow of cash. In fact, a sale-leaseback arrangement can be the ideal way to deal with properties that have aged, gone vacant or are functionally obsolete. 

3. Invest in Technology

As with other metrics involved in commercial real estate, there’s a lot to calculate and keep track of when it comes to total cost of occupancy. Managing this increases in difficulty as you scale up your portfolio. Fortunately, technology solutions are getting better and better these days to not only make calculating these metrics easier, but even automating many of them on the back end. 

(To see how Quarem can do this with TCO, request a demo!)

4. Prioritize Energy Efficiency

Not only are environmentally friendly initiatives perceived positively upon by clients and other companies, they reduce your costs as well. The more you invest in energy efficiency and renewables, the more you “reduce operating expenses and carbon emissions,” according to CBRE. Even just replacing old lighting, security systems and windows or doors is a good place to start.

5. Develop a TCO Strategy

At the end of the day, if you don’t have a TCO strategy (or a documented one, at the very least), it’s time to start one. Whether you’re looking to reduce your TCO, maintain your TCO and prevent your TCO from increasing in the future, a documented strategy will keep yourself and everyone on your team on track. Be sure to implement incentives, requirements and best practices for your portfolio.
These five ways CRE professionals can reduce total cost of occupancy are just the start. To see how commercial real estate software like Quarem can help you learn other ways to reduce total cost of occupancy (TCO), request a demo today.

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About the author 

Guy Gray

Guy Gray serves as Chief Operating Officer overseeing our technology and client services teams. He is responsible for guiding Quarem application development, networking and security, as well as new client implementations.

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