From time to time clients raise the question of the difference between corporate real estate and facilities management. In essence, they’re asking why we have two different professional designations since they both seem to have the same responsibilities. But the two professions have distinct differences and responsibilities. Here we explore these differences and attempt to bring clarity to the issue.
Facilities Management (FM)
Facilities management is primarily an operational role. Facilities managers have the responsibility of managing the day to day operations of enterprise facilities.
Key Responsibilities of Facilities Managers
- Maintenance and Repairs: Ensuring all facilities are well-maintained and any issues are promptly addressed.
- Utilities and Energy Management: Overseeing the use and efficiency of utilities.
- Landscaping: Maintaining the outdoor areas of the facilities.
- Furniture Acquisition: Procuring and managing furniture for the enterprise.
- Physical Security: In some cases, managing the physical security of the facilities.
Professional Associations for Facilities Managers
Facilities managers are typically members of professional organizations such as IFMA (International Facilities Management Association), which offers training and certification associated with facilities management disciplines.
Corporate Real Estate (CRE)
Corporate Real Estate (CRE) is distinct from FM in that it is primarily a transactional responsibility with focus on leasing of facilities for the enterprise including
- Office Spaces
- Warehouses
- Data Centers
- Manufacturing Facilities
- Research Facilities
Key Responsibilities of CRE Professionals
CRE professionals manage the life cycle of property, beginning with site location, building design, acquisition, disposition, and in most cases leasing versus owning company properties. Over time, CRE has become more strategic in its role as steward of the enterprise portfolio; developing long range plans to insure efficiency and cost effectiveness in the portfolio.
CRE Workplace Strategies
In the last decade CRE has assumed the role of workplace manager and developed workplace strategies such as desk sharing, office hoteling, and various mobility strategies such as co-working and telecommuting.
Professional Associations for CRE Professionals
CRE professionals tend to join associations which focus on real estate management versus facilities management. The most prominent CRE association is Corenet, an international association with tens of thousands of members worldwide. Corenet was formed from the merger of the International Development Research Council (IDRC) and the National Association of Corporate Real Estate (NACORE). Similar to IFMA, Corenet offers professional training and certification in subjects unique to CRE management.
Overlapping Responsibilities Between CRE and FM
In many cases, the CRE executive has the responsibility for facilities management and will have a separate FM staff as part of the CRE organization. In addition to leasing the CRE organization will have office design capabilities, engineering, environmental expertise, and IT management capability usually staffed from the IT organization.
FASB Lease Standards for CRE and FM
For both CRE and Facilities Management responsibilities, it’s crucial that all staff members have a good knowledge and understanding of the new FASB lease standards. While these standards will be more relevant to the CRE managers, who are directly involved in property leasing, it’s important to recognize that the standard applies to all leasing including equipment leasing. FM managers lease various equipment such as vehicles, maintenance equipment, landscape equipment, etc so FM must be cognizant of the FASB standard as well.
Importance of Collaboration between CRE and FM
Corporate Real Estate and Facilities Management are distinct managerial disciplines, but closely aligned. It’s important that the two disciplines collaborate since FM should be involved in the property leasing operation to provide input on maintenance and repair issues with prospective properties, input on the energy efficiency of the prospective properties, and other building operational factors. It’s wise to have some degree of cross training between CRE and FM; to enhance the level of collaboration based on common knowledge and understanding of the critical success factors for both disciplines.
Importance of Collaboration between CRE and FM
While Corporate Real Estate (CRE) and Facilities Management (FM) have distinct roles and responsibilities, they often intersect with another critical function: Property Management. Understanding the differences and similarities between CRE, FM, and Property Management can further clarify each role’s unique contributions to the overall management of real estate assets.
Corporate Real Estate (CRE) vs. Property Management
CRE professionals focus on strategic planning, site selection, acquisition, leasing, and portfolio management, ensuring the efficiency and cost-effectiveness of the company’s real estate holdings.
Property managers handle tenant relations, maintenance and repairs, budgeting, compliance, and vendor management, focusing on the day-to-day operations of individual properties.
The key difference lies in the scope of their responsibilities, with CRE being more strategic and portfolio-focused, while property management is operational and property-specific.
Facilities Management (FM) vs. Property Management
Facilities managers are responsible for maintaining and overseeing the operational aspects of enterprise facilities, including maintenance, utilities, and physical security.
Property managers, on the other hand, focus on tenant relations, property maintenance, budgeting, compliance, and vendor management.
The primary difference is that facilities managers serve the organization’s needs, while property managers serve the tenants’ needs, with FM being more internal and operational and property management being tenant-focused.
Learn More About Visual Lease
Visual Lease provides comprehensive lease management solutions tailored for both Corporate Real Estate (CRE) and Facilities Management (FM) professionals. Discover how Visual Lease can help your organization streamline lease operations, ensure compliance with FASB standards, and optimize your real estate and facilities portfolios.