1.

Key Performance Indicators (KPIs)

2. Portfolio Quality Index (PQI)

3. Tools & Technology
4. Panel discussion

PQI - Your New Business Intelligence Platform

Simon George
Director, Corporate Real Estate
Redhat Incorporated

Karen Burkhart Dick

Leader, Global Real Estate
Equifax Incorporated

Tim Markham
Sr. Director - Workplace Resources,
Travel Services & Safety
IHS Incorporated

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COST vs VALUE

cost

value

(-)

(+)

KPI

PQI

amount paid to obtain

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worth or usefulness

3 Steps in business intelligence

PQI

KPIs

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3 Steps in business intelligence

knowledge
information
data & metrics

KPIs
$ PSF
% Utilization
Cost savings

55 30% precipitation

Market benchmarks
Performance
measurement
Ratios
Analysis
Its going to be
rainy and cool

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Provide insight
Promotes options
Gamification
Future proofing
Decision support
Guidance

You should bring a light

sweater and an umbrella
5

What is a Portfolio Quality Index (PQI)?

technical
difficulty

style
artistry

Shifts the focus from individual Key Performance Indicators

to
a multi-dimensional prioritization tool for decision support
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66

Steps to developing a PQI

4
2

Identify
KPIs that
are
measurable
and
impactful
to the
business
and real
estate

Select the
KPIs that
are most
important
to your
organization
tied to
business

Weight the
KPIs in
order of
importance

1
3

Score the
outcome

Prioritize
actions

performance

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Core CRE KPIs

Financial
Total Occupancy Cost
Cost/SF
$/Seat
Capex Performance
Cost Savings Targets
Cost as % of Revenue
Sales/SF
Contract Value

2 1 3

Customer
Satisfaction
Customer Satisfaction
Employee Satisfaction
Score
Subjective Rating of
Space
Employee Engagement

Utilization/
Efficiency
Occupancy Rate
Utilization Rate
SF per Employee
SF per Seat
Office to Workstation
Ratio
Warehouse Utilization
Productivity Rates

Market
Performance
$/SF Rent
Market Vacancy Rate
Capitalization Rate
Market Volatility

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Operations Criteria
Transaction Quality
Cycle Time
Lease Flex - Turnover
Rate
Lease Flex - Options
Lease Term Length
Subjective Rating for
Lease Restructure

Sustainability
Metrics
Carbon Footprint
Energy Efficiency
Energy Conservation
LEED Certification
Public Transportation
Proximity

Benchmark Data

2 1 3

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Sample Portfolio Benchmark Data

2 1 3

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CoreNet SPP Survey Results

What KPIs and metrics are important to managing your organization?
400+ responses

Size/FTE
Occupancy cost / SF
Productivity
Client Satisfaction
Cost Savings
2 1 3

Workstation Density
Revenue SF / FTE

Occupancy Cost / Total Cost

ROI
Cost / % of Revenue
0%

5%

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10%

15%

20%

25%

30%

35%
11

Sample Executive Dashboard / KPIs

2 1 3

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Sample PQI
Building Vacancy
Rating (5%)

9.0

London

2 1 3

Chicago

8.0

Frankfurt

8.0

Market Vacancy
Rating (5%)

Optimal

Beijing

7.5

Hong Kong

7.5

Singapore

7.5

San Jose

7.0

Sao Paolo

7.0

Mexico City

7.0

Mid

SF per FTE (20%)

High Score
Low Opportunity

5.0

Brisbane

Occupancy
Cost PSF
(25%)

% of Current Market Rent

that our Existing Rent is
Above Market (25%)
Mid Score
Mid Opportunity

Score &
Prioritize

4.5

Paris

Needs
Improvement

Subjective
Rating of
Space (5%)

7.0

Prague

Utilization Rate
(15%)

8.5

New York

Target
Status

Low Score
High Opportunity

Select KPIs &

weight

10

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Site A Leased Portfolio Quality Index

Optimal Property Below Current Market (-15%)

Strategic
Options

MARKET RISK

NoChange

Location
Portfolio
UTILZATION
RATE

FACILITIES
COST PSF

Optimal $45.00

Needs
Improvement 50%
NEEDS IMPROVEMENT

Best-In-Class
90%
SF PER SEAT

Best-In-Class
$55.00

OPTIMAL

OCCUPANCY
RATE

Re-gear
Sublet

AVERAGE

Needs
Improvement 200 SF
Best-In-Class
150 SF

Renew

FACILITIES
COST PER
SEAT

Reduce

Optimal $7,750

Expand

Best-In-Class
$8,000

Needs Improvement 55%

Best-In-Class
85% 90%

Co-locate
Relocate

0-12
Mos.
12 - 24
Mos.
24+
Months

Scenario Planning Action Plans

Site A
Action Plan
A. Early terminate and relocate
Early termination right
allows for termination with
6 months prior notice
Relocate to downsize and
decrease overall obligation
due to low utilization rate
of 50%

B. Reduce and re-gear for

long-term strategy
Give back space to landlord
Re-gear build-out to be more
efficient

C. Monitor market for

opportunities
Monitor trends in advance
of the current leases
expiration date

Terminate
Dispose

X
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Horizon Action Plan

3-5 year portfolio lifecycle plan
Align with capital and operational financial planning
RedRevisit
semi-annually
Hat - Core
Sites Action Plan / annually and ensure the plan is aligned with the business
CORE LOCATION

LEASE
EXP

SPACE
STATUS/ SCENARIO
UTILIZATION PRIORITY ACTION

Sydney

BEIJINGRAYCOM

2013

Delhi

2017

RENEW & COB

LOCATE

Sydney
Begin due diligence for immediate negotiation for(ABC)
renewal option in existing
space as well
asmoving non-site critical engineering functions (GSS) to sales office in Park View Green .

RELOCATE

Initiate discussions with Engineering Planning about expansion to 2nd tier city for potential
expansion.

Analyze renewal option given the TI dollars invested in the property as well as it being an
exceptional location and meets future expansion needs no current expansion options in building
also initiate immediate expansion search for new location move GSS, Ops & IT into adjacent
building, Location needs to accommodate future consolidation option when 2017 lease expires
Ideal location.

Begin immediate expansion search for new location move GSS, Ops & IT into adjacent building,
location needs to accommodate future consolidation option when 2017 lease expires Ideal
location. Examine phased re-location strategy at end of 2017 lease, viable options near the current
location with good incentive opportunities. Terminate lease at end of term. Building highly inefficient
and does not accommodate future growth projections.

Shanghai 2014

Tokyo

SINGAPORE

2014

FY2012:73%
FY2013:81%
FY2014:92%
FY2015 100%

FY2012: 70%
FY2013:78%
FY2014:99%
FY2015 117%

12-24 MONTHS

24+ MONTHS

(ABC), Fin &

EXPAND &
RELOCATE

TOKYO

FY2012: 91%
FY2013:129%
FY2014:144%
FY2015 159%

FY2012:103%
FY2013:121%
FY2014:135%
FY2015 143%

0-12 MONTHS

RENEW &
EXPAND

BRISBANE

ACTIONS
Sitefor
ABC
Begin due diligence for immediate negotiation
renewal option in existing space as well as
immediate examination for expansion with Raycom and adjacent properties.

RENEW &
EXPAND
FY2012: 76%
FY2013:122%
FY2014:140%
FY2015 157%

TIMELINE FOR ACTION PLAN

SCENARIO
OPTIONS

RENEW &
EXPAND

Analyze renewal option depending on expansion capability within the current location. Monitor
availability within the building ideally floor. Examine opportunities for expansion/swing space in
bldg (nothing currently available) or adjacent to building to meet expansion in next 12-15 months.
Consider a phased move depending on location and space type.
Examine phased re-location strategy at end of 2014 lease. Capex is in budget for relocation option
if needed. Look for expansion/swing space in bldg (nothing currently available) or adjacent to
building to meet expansion in next 12-15 months. Consider a phased move depending on location
and space type. Terminate lease at end of phased move depending on re-location strategy.

EXPAND &
RELOCATE

RENEW

Analyze renewal options depending on status of future headcount projections and lower cost rate
structure. Polycom leaving building in 2012, potential option for growth.

RELOCATE

Lease expiration of 2014. Due to building inefficiency and projected growth, examine options for
space relocation. Need to confirm first right of refusal on 9th floor.

RENEW &
EXPAND

Analyze renewal option depending on expansion capability within the current location. Examine
expansion/swing space in bldg (one floor may become available) another tenant has first right of
refusal. Potential for relocation of FTEs to Bangalore. In Western Office Park there are few
expansion opportunities available highly sought after.

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2017
RELOCATE

Analyze phased re-location strategy at end of 2014 lease (2017 lease expiration). Discuss over
next 12 months right to terminate lease in 2014 (2017 lease expiration) depending on re-location

u
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Confidential Document
This information includes confidential data and material that may not be duplicated,
used or disclosed, in whole or in part, for any purpose other than the evaluation of
Colliers by the intended party, without the prior written consent of Colliers International.
October 20, 2014

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