Increasingly companies are evaluating their real estate holdings to see if they are still cost effective and align with larger business goals. This is not welcome news to landlords—although net lease companies will be happy about the increase in sale leasebacks—but it is reality and the best way to address this trend is to understand how these companies are thinking.   

Two leaders at Colliers Capital Markets—Ron Zappile, Senior Vice President, Portfolio Strategy Consulting, and Connor Faught, Executive Vice President, Head of Corporate Capital Solutions—give their take on some of the strategies that they see clients considering.

Study what's in the portfolio. A first step is to look at real estate holdings because of the price of debt and decide how to apportion funds to cover strategies, says Zappile. As an example, he cites a client whose growth strategy is rooted in developing new technology. Doing so requires a huge proportion of its available funds. The client also has other assets to maintain that require more monies. When taking a deep dive, owners/operators can identify inefficiencies. Excess real estate holdings might be an alternative capital source, he said.