Forecasting and Modeling
No matter how similar the companies may be, a merger or acquisition requires assimilating different business models into one entity. For example, corporations use varying levels of sophistication when forecasting future real estate requirements. An essential first step in the real estate evaluation process is to take a fresh look at the legacy methods used to develop estimates for space needs by property type. The goal is to avoid under- and over-investment in the various facility types, since both results can have negative financial implications.

Each corporation and each individual business unit will have unique space forecasting requirements and nuances that need to be understood. The use of software to model space requirements and the integration of more sophisticated statistical techniques are keys to achieving reliable forecasts.

In a merger or acquisition, a simple, but effective, way to save potentially millions of dollars through cost avoidance is to stop or substantially slow down the space acquisition and disposition process. The bias has been to complete "in-process" transactions or to negotiate new deals before the longer-term nature of space requirements is understood. Corporations that have decentralized real estate decision-making processes are most prone to this error. Companies with centralized real estate functions are not immune, however. Following this recommendation, they are often more successful in realizing significant financial benefits.

For example, an international financial services company acquired the overseas operation of a major banking enterprise. The U.S. director of real estate of the acquiring company was asked to look over some new leases for office space in a major European city that were being negotiated by the new subsidiary. Given his limited understanding of the local market, the director acknowledged he was at a disadvantage in critiquing the transactions. He wasn't comfortable with potentially overruling the subsidiary's decision-making since the acquisitions had closed only several months before.

People, Workplace Environment and Culture
Most everyone agrees on the importance of retaining qualified people in a low-unemployment-rate environment and particularly in the context of a merger or acquisition. AT the same time, a merger or acquisition provides employees a convenient opportunity to re-evaluate their careers. Clearly, the physical environment within which people work can influence their thought process concerning whether to change their jobs.

From the employer's perspective, creating the right workplace environment to improve productivity on a cost-effective basis can help enhance employee moral and reduce turnover. Merging entities frequently present sharp contrasts in the area of culture and workplace environment that need to be resolved.

Forming the appropriate internal team is the first critical step. It should include internal representatives from the business units, finance, sales, marketing, human resources, information technology as well as external corporate real estate and space planning experts. This team orientation is consistent with the integrated management of non-core functions under Corporate Infrastructure Resources™ (CIR) . The team's mission will be to determine the appropriate models for the different facility types used by the merged entity.