There are many types of outsourcing models and organizations have the ability to design outsource partnerships that can range from experimental, where service provider dependence is low, to models that are more transformational, where dependence on the outsource partner is high. Varying models offer trade-offs and some can present challenges for real estate departments from a cultural standpoint. In most cases today, corporations choose to partner with multiple providers based either on their functional expertise (i.e., transaction management, facility management, lease administration) or geographic expertise (i.e., Americas, EMEA, APAC).

Owner Outsourcing

Much like the corporate side, internal cost pressures are driving owners to outsource more and in different ways. An increased regulatory environment globally, as well as the additional resources needed to tackle issues such as energy consumption, business continuity, social media and technology, have increased operating costs for many owners. These firms are beginning to turn to service providers to not just manage properties and collect rent, but to provide expertise in areas that create asset value. This allows owners to be able to focus on their core activities of making real estate investments.

Looking Ahead

The increase in outsourcing activity does not mean that it's all smooth sailing for service providers. To the contrary, it is creating fierce competition in the provider industry. While the benefits of outsourcing are clear, corporate users are mindful that many providers are just beginning to scale the more strategic side of their platforms.

Owner concerns hinge on choosing which firm can provide the best advice in strategically managing assets for value creation. One thing is clear however, with the continuing need to control costs in the global economy, the trend towards more outsourcing, with broader and more complex services, is not likely to slow in the near future.

Maria Novak is the senior managing director of global strategy for Cushman & Wakefield's corporate occupier and investor services group. The views expressed in this column are the author's own.