Technically yes, while one can consider all commercial real estate as “corporate” and having to do with a corporation or company, Corporate Services refers to more than just brokerage activities. Corporate Services typically include services such as lease administration or lease management, portfolio strategy and optimization, project management and several other real estate related activities.
The simple answer is “experience” and “efficiency.” A mid-size to large company may have operations and accounting teams that could take on those roles, but the bulk of their responsibilities lies within running the company and the numbers. They most likely do not have time to be market or industry experts and gain valuable industry relationships. Take Coca-Cola for example. They are focused on when they know best, the beverage business. Although Coca-Cola may have the resources to start or acquire an aluminum or plastics company to manufacture the packaging, they choose to purchase packaging from suppliers to focus on what they do best. This saves them time and money.
The most obvious service is going to be project management. Many brokers’ scopes of work end at lease signature. Once the lease is signed, their duties are complete. Whether the lease is a renewal, net-new location, or relocation, there are typically many actions that need to be taken following the lease signing. Typically, the premises will require construction or improvements, facilitating a move and/or furniture delivery, tenant signage design and installation and many other menial tasks that are time consuming.
Lease Administration or management is another service that may seem simple, but can quickly become complex once you have 10, 20, 30 + locations. Lease Administration is more than just filing your leases away in the cloud. It involves tedious abstraction of terms for each of the leases. To assure that data is easily accessible, key data points such as, lease commencement and expiration dates, annual rent escalations and dates, rent abatement, CAM (common area maintenance) charges, taxes and operating expenses, and the list goes on and on. Once this data is abstracted, it is much more valuable for the accounting department to access and budget. All this data can be hosted in a tenant portal to make it easily accessible and exportable.
That is up to you! Think of your Corporate Services broker as part of your company. Initially, they will need all your leases so they can abstract and understand the status of each of them. Your broker will need to learn about your company and understand the short- and long-term goals so they can devise the appropriate strategy. Once the strategy is in line and accepted by company management, your broker will begin executing on that strategy. To maintain the execution and make tweaks to the strategy as needed, regular calls will need to take place to assure continuous alignment. The frequency of calls depends on the volume of the project and can vary from company to company.
The cost varies depending on the services you select. Based on your needs, your broker can recommend the services. Alternatively, you can choose what services you think are best for your needs. At CARMEN Commercial Real Estate, we charge a monthly fee based on the client’s needs. This is almost always more cost effective than hiring an internal team.