Corporate Real Estate Management
The Blind Spot: Turning Your Real Estate Organization into a Value Driver
Climate change, digitalization, ESG requirements, hybrid work models, and increasing cost pressures are fundamentally reshaping business demands. Many organizations continuously develop their business models, processes, and technologies to meet these challenges. However, their own real estate organization is one of the areas that frequently lags behind when it comes to realizing its true potential.
Corporate real estate is more than just floorspace and buildings. These assets directly impact productivity, innovation, sustainability targets, and employer attractiveness. The critical question today focuses on transforming Corporate Real Estate Management (CREM) into a strategic driver of value rather than simply the management of properties.
“Many companies invest significant resources in transformation, digitalization, or sustainability,” says Dr. Chris Richter, Associate Partner and Head of Strategy and Organization at Drees & Sommer. “At the same time, they often fail to question whether their own real estate organization is even equipped for this shift.”
A significant gap frequently exists between the strategic potential of corporate real estate and the actual organizational structure of many companies. Structures that have grown over time, a lack of transparency in terms of costs and value contributions, and unclear responsibilities make consistent management difficult.
We spoke with our expert about the modern role of CREM, the necessity of an operating model for modern real estate organizations, and how companies can objectively assess their maturity level.
What role does corporate real estate management play today?
Many companies traditionally viewed CREM primarily as a service function. Teams operated properties, provided space, and managed investments. However, core requirements have changed fundamentally.
“Real estate represents one of the largest assets for many companies. At the same time, they influence productivity, sustainability, employer appeal, and an organization's ability to adapt to change,” Richter explains.
This shift makes CREM increasingly important strategically. Modern real estate organizations must deliver much more than basic building and site management. They need to integrate corporate strategy, portfolio decisions, work environments, processes, and technologies.
Real estate can only deliver a measurable contribution to corporate success when leaders manage it actively rather than in isolation.
“The property itself is not the goal,” the Drees & Sommer expert states. “It’s an enabler for the core business.”
Why don’t real estate organizations make the most of their potential?
Despite the growing strategic importance of corporate real estate, many organizations still operate with structures developed over decades.
Fragmented responsibilities, parallel processes, and disconnected systems eliminate transparency and complicate decision-making. Real estate departments also frequently describe their services using technical jargon that fails to align with the broader corporate strategy.
“Many CREM organizations do valuable work. However, their contribution often remains invisible because control metrics, governance structures, and strategic links are missing.”
This leaves vast potential untapped. Teams may well manage costs but fail to optimize them actively. Organizations possess data but do not use it consistently to drive decisions. Consequently, the wider business views the real estate organization as a cost center rather than a strategic partner.
What does a modern real estate organization look like?
“Optimizing individual processes is not enough to establish corporate real estate as a strategic value driver. Instead, it requires an integrated Corporate Real Estate Operating Model.”
Scientifically developed by Dr. Richter, the CREM framework provides the foundation for this transformation. It outlines six core dimensions that collectively define a high-performing real estate organization:
- Strategy and Ambition: Aligning real estate management with corporate strategy using clear target visions.
- Portfolio Architecture: Designing and managing locations, spaces, and property portfolios in the best possible way.
- Governance and KPIs: Establishing transparent decision-making paths alongside measurable performance and success metrics.
- Structures and Roles: Defining clear responsibilities within a high-performing organizational structure.
- Processes and Operations: Ensuring efficient workflows across the entire real estate life cycle.
- Systems: Creating integrated data and technology landscapes to support informed decision-making.
“Transformation needs more than just good ideas. It requires an organization that connects strategy, processes, and implementation,” Richter explains.
This interplay of dimensions allows companies to manage real estate strategically, measure value contributions, and implement sustainable changes.
What roles do data, governance and KPIs play in CREM?
Successful Corporate Real Estate Management relies on more than just real estate expertise. Reliable data, clear responsibilities, and a transparent management system are equally essential.
“If companies want to make the value contribution of their real estate organization visible, they need clear KPIs and governance structures,” Richter adds.
Leaders can only make informed decisions when performance, costs, risks, and potentials become measurable. Governance structures clarify decision-making authority and connect real estate targets with corporate goals. This transforms corporate real estate from an operational administrative function into a management discipline that actively drives business transformation.
How can companies assess the maturity levels of their real estate organization?
“The biggest challenge is often not a lack of willingness to change, but rather the absence of an objective view of the status quo,” says Richter.
Many companies can see where there’s existing room for improvement but struggle to identify exactly where to begin. Drees & Sommer’s maturity assessments for real estate organizations solve this exact problem.
The assessment highlights strengths, weaknesses, and specific development opportunities to provide a solid foundation for strategic decisions. It effectively bridges the gap between research and practical application.
The CREM framework offers a scientifically sound orientation guide, while the maturity analysis applies these insights directly to a company's specific context.
What benefits does maturity analysis offer?
The analysis goes beyond a simple inventory check to reveal concrete improvement potentials and derive actionable measures.
Companies receive:
- Transparency regarding the key value drivers within their real estate organization.
- An objective classification of their current developmental stage.
- Clear identification of efficiency and optimization opportunities.
- Benchmarking against similar organizations in the market.
- Prioritized action plans for future development.
- A scalable, future-proof CREM model.
Real Estate as a Central Transformation Driver
If companies only administer their real estate organization, then they fail to harness their full potential. Leaders who manage corporate real estate strategically build the foundation for greater efficiency, better decision-making, and successful transformation. Obtaining an objective view of the status quo often serves as the crucial first step. Organizations can only unleash their full potential as value drivers when they understand their current baseline.
“The question is not how properties are managed. The question is what contribution they can make to corporate success.”
Companies that can answer this question create the basis for turning corporate real estate from a cost factor into a strategic value driver. This transformation represents the true future of Corporate Real Estate Management.