Managing Corporate Real Estate Assets: Current Executive Attitudes and Prospects for an Emergent Management Discipline

In 1987 MIT conducted a study of the management of buildings and land in large organizations not primarily in the real estate business. Senior real estate executives at 284 large US corporations and institutions were surveyed. The research shows that despite their great value, corporate real estate assets are seriously undermanaged. One of the most significant factors in this undermanagement is that many corporate real estate managers do not maintain adequate information about their real estate assets. The study attempted to identify key factors in the "effectiveness" of real estate management in various organizations. The strongest factor appeared to be the attitudes of managers in regard to the importance and value of the real estate function within their organizations. The corporate real estate decisionmaking process is driven most strongly by the mission and operational needs of the corporation. Corporate real estate management as a field has been inhabited by the low prestige and priority accorded it in companies, in management consultant groups, and in business schools. However, characteristics of a distinct management discipline are emerging professional organizations, publications, and most importantly, the recognition of real estate's potential for increasing company profits. Corporate real estate management must move toward developing a strategic approach involving principles and practices of general management to develop a proactive, comprehensive, and portfolio-wide decisionmaking process.