Contrary to popular perceptions, the government is catching up to the private sector in terms of innovative thinking about real estate. At the federal, state, and local levels, government real estate teams are using technology to operate more effectively. Across the country, forward-looking government entities are transforming how they manage their real estate and facilities. Progressive states are investing in technology and using data and analytics to streamline their real estate portfolios. They have made investments that will help government buildings prioritize deferred maintenance projects and create more appealing workplaces. This is ultimately good news for every one of us. By using their real estate to serve constituents more effectively while achieving significant cost savings, they are able to free up funding for other, often critical services.
Where the public and private sectors differ is in their constraints. Pension liabilities are looming for many state and local governments. Many government organizations are examining their real estate more closely to see whether assets should be repurposed, sold, or leased to third parties, and looking to move from leasing space, to owning it, to reduce lease costs. Government entities at all levels are under pressure to return value to taxpayers.
Additionally, government agencies face an aging workforce challenge. Many are concerned about retiring Baby Boomers and competing with the private sector for the next generation of workers. According to Government Executive magazine, roughly 14% of federal government workers are eligible for retirement today and, in five years, about 30% will be eligible. Many government entities want to modernize their workplaces now to improve employee satisfaction, with an eye toward younger generations and their workplace preferences.
Another motivation for government properties to invest in technology are increased government accounting standards, some of which now also have a regulatory mandate to document their real estate assets. Both of these requirements create a need for accurate, centralized real estate data for reporting.
But the problems of governmental real estate are the same as those in the private sector. Data is often siloed away in different systems, which complicates real estate data governance in government, as in the private sector. Government real estate portfolios are typically very diverse, encompassing everything from offices and warehouses to laboratories and recreational facilities. They also have a large number of stakeholders as a governmental real estate portfolio is managed by multiple different entities, each with their own constituencies.
Technology can help governments address all of these issues and others. Often, an organization might implement one or more modules of an integrated workplace management system (IWMS) as the foundation of their technology ecosystem, which might include a number of other tools and platforms like asset management systems or enterprise accounting applications.
The IWMS is a good starting point because it provides a place for centralizing data and integrating information from disparate sources. A well-suited IWMS solution helps organizations optimize the use of workplace resources, including the management of a company’s real estate portfolio, infrastructure, and facilities assets. However, organizations typically find they need to do more work to use the data effectively. For example, we often conduct research to ensure that companies are effectively aggregating their own data to enable intelligence-driven decision making processes. Because, if data isn’t accurate, it isn’t useful.
Consider what should be straightforward portfolio questions: what are the organization’s real estate assets? What properties are leased versus owned? What department or division occupies the asset? Often, simply trying to verify a government entity’s real estate assets can require significant detective work. Records may indicate, for example, that a property is a school building, but an in-person visit reveals that the site was repurposed into a homeless shelter eight years ago.
Once the government entity has access to reasonably accurate data, it can use business intelligence tools to understand the portfolio and integrate market data. Once you know what spaces you occupy and how those assets are being used, you can gain insights into where facilities are underutilized or where a different location might allow you to reduce costs while providing more convenient service to constituents. Or, you might see opportunities to relocate teams to foster collaboration and streamline service delivery.
Today’s portfolio analytics tools allow you to layer different kinds of information, such as property attributes, lease options and expiration dates, occupancy market data, annual costs, headcounts, and more, so you can make decisions based on the criteria that matters. Real estate costs are important, for instance, but so is service to constituents. These tools provide a comprehensive visualization of the flexibility and opportunity available in your portfolio.
Portfolio data and analytics can enable an organization to make data-informed decisions that can concurrently improve cost-effectiveness along with employee and constituent satisfaction. For government entities, cost can be a complex picture. A facility may be well-located, but it might also be carrying millions in deferred maintenance liabilities. Or, it may be inexpensive to operate, but a source of employee complaints and dissatisfaction. An owned building might be ideally located, but require significant renovations for today’s modes of working.
As major talent shortages emerge across the public sector, workplace and the future of work have come to the forefront for government employers. For previous generations, the lure of a government job was long-term stability and good benefits. Millennials and Gen Z workers, in contrast, are more interested in variety and opportunities to learn, and prefer workplaces that allow for flexibility in choosing where to work.
To a great extent, the public sector could accommodate these preferences with the help of modern technology. For example, many kinds of work can be done from any computer—as long as the worker has secure access to their data and applications. Some government entities are already adopting mobile, flexible workplace strategies that improve employee satisfaction and productivity, and making the PropTech investments that enable these strategies.
These innovations provide multiple advantages for government employers. With mobile working and telecommuting policies, an organization can revamp its office designs to provide shared interactive spaces, and reduce its square footage because not everyone needs their own personal, fixed desk. Data and analytics can enable government employers to better align their space with the needs of employees. And today’s workplace technologies make it possible for even the most secure jobs to be done from different places within or outside of an office, which happens to be a necessity right now. If agencies hadn’t prioritized the ability to work remotely yet, they now will.
Real estate teams also recognize the importance of user experience and are looking to mobile solutions for employees. By integrating floor plans into reservation systems and email applications, employees have an easier time finding desks and amenities when visiting an office. The same experience can be offered to visitors.
Some government agencies have been able to reshape their footprints and improve space utilization by analyzing how their offices are used today versus how they could be used tomorrow. These initiatives require data, and underscores the importance of data in driving not only big-picture portfolio decisions, but also the kinds of workplace strategies that help attract and retain employees. As different as the public sector real estate world is from its private sector counterpart, the need to make smart decisions about a workspace is universal.