Real Facilities Inc.

Real Facilities Inc.

November 13, 2008 09:00 ET

Real Estate Expert Offers Crucial Tips to Help Canadian Businesses Become Recession-Proof

Businesses must focus on real estate costs - second largest expense after payroll

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2008) -

Attention News/Business Editors:

At a time when the confidence of business leaders is nearing an all-time low and even the biggest and most well-known corporations are announcing major cutbacks to save costs, many Canadian businesses are anticipating what had until very recently been unthinkable... staff layoffs.

However, before business leaders embark on the painful path of eliminating jobs, they must ask themselves if they have done everything possible to keep their company's expenses in check.

"A crucial error many businesses make during a recession," says Stan Krawitz president and founder of Toronto-based real estate consulting firm Real Facilities Inc. (www.realfacilities.com), "is to focus all their attention on reducing staffing and not placing priority on assessing physical occupancy costs, which for most businesses rank as the second-largest expense after payroll."

According to Krawitz, there can be significant benefits in extending your lease in exchange for a space or rent reduction. However, he adds, there is an art to this negotiation process and a science behind the financial calculations that many tenants simply do not understand. The challenge, he says, is to find the delicate balance between the extension term length, the rental rate and the amount of space required.

With more than 18 years experience in Canadian office, industrial, commercial and investment real estate, Krawitz offers five crucial tips to help Canadian businesses recession-proof their operations during lean times:

1. Apply an integrated, organization-wide approach to reducing costs, including looking at real estate, human resources, production processes and all other major cost centers.

2. Conduct a locational assessment to determine the value and strategic importance of each distinct physical location in the organization.

3. If your company has multiple leased properties in different locations, leverage the strength of your portfolio to negotiate with your landlord or landlords to cut space and increase the length of your lease term/s.

4. Undertake a space utilization study to make sure you are seeing maximum efficiencies across the organization.

5. Do a lease audit to uncover any hidden costs your organization may be bearing, and be prepared to renegotiate the terms of your lease with your landlord.

About Real Facilities

Real Facilities Inc. (www.realfacilities.com) is a Toronto-based group of corporate real estate professionals representing the best interests of corporate space users across Canada, the U.S. and Mexico. Other service providers represent both landlords and tenants, buyers and sellers, and create a marked conflict of interest. Real Facilities only represents corporate space users. Real Facilities' FLOW process delivers tangible cost savings and productivity increases for its clients.

Contact Information

  • To arrange an interview with Stan Krawitz, please contact:
    Sacke PR
    David Bosworth
    (416) 846-3540
    Email: davidb@sackepr.com