Facility professionals , CRE strategy and property cost reduction

Cost reduction method of real estate expenses

Cost reduction method of head office building/branch building/facilities, etc.

Reduction of rent

In case of leased building/facilities, you may determine whether the rent and/or common-area charge being paid now is within the range of an appropriate and available market rent, by conducting regular valuations of the prevailing market rent.
In conducting market rent valuation, it is advisable to use professionals for the valuation of each building as valuation done by oneself can only be made using the average rent data for the market.
We prepare a "market rent valuation report" by building managers who have hundreds of successful experiences of rent reduction, promptly at low cost (we valuate for free for your initial contact).
Not limited to valuation of the market rent, we also prepare request papers for rent reduction/revision, engaging ourselves in the actual negotiation of rent reduction on your behalf.
The above request paper provides the basis of the market rent valuation (proper rent level) enabling negotiation based on specific figures, and so you can expect results different from ordinary rent reduction requests.


Reduction of deposit

Concurrently, we valuate the actual amount of deposit (deposit and guarantee money), and when it appears expensive, we will prepare a request paper for a refund. We can also engage in the refunding negotiations on your behalf.


Cost reduction and improvement of environment by relocation from the building

It can also help you reduce the cost by studying options to relocate from buildings where the financial situation of the owner (lessor) is unstable or aging buildings with deteriorated appearance and facilities.
In view of the slump in the economy, we consider it a good opportunity for you to review the possibility to relocate to other buildings with equal or better locations, grades and relatively cheap rent.
We not only recommend properties, but also provide consulting for rent reduction by preparing layouts to rationalize space as much as possible.
For instance, if you rent 200 tsubo (660�u) with a rent of 4 million yen per month, you can achieve cost reductions of 12 million yen by reducing the space to 150 tsubo (495�u) by relocation. Even when the relocation expense and expense for recovering to the actual condition should cost you 20 million yen, it can be recovered in 2 years. You can expect improved an office and work environment, realizing substantial cost reductions in mid-long term perspectives.


Cost reduction of acquisition/selling of building

By acquiring leased buildings to date, you may avoid fluctuations of rent in future. Actually, there are cases in which you will end up in more advantageous position by acquiring the building rather than continuing to pay the rent, even considering expenses such as administrative fees, repairing costs and taxes. We conduct comprehensive services ranging from calculation of current value, intermediation of transaction, recommendation of qualified building management firms to formulation and planning of long-term repairing plans, etc. by experienced professionals including real-estate appraisers.
We also provide comprehensive consulting of evaluation, intermediation and other practices in regard to selling of your owned building and others.

Cost reduction method of construction cost

An Effective use of Cmr (construction manager)

Negotiation to reduce construction costs requires professionalism and facts.
We often hear from people in charge of general affairs in companies who speak proudly that they have achieved cost reductions by simply making baseless negotiations, "Why don't you reduce the cost which appears expensive". We tell you that constructors never do lose money on a job, which means they make unnoticeable adjustments of the conceded cost somewhere in the building, ending up an unsatisfactory completion of the construction work.
There are unlikely to be sufficient experts in ordinary companies who are capable of both actual quantity survey of the construction estimate and quality check of the ongoing buildings. Therefore, it would be far better to rely on an outsourced professional quantity survey firm, having them prepare re-evaluation reports of estimate amount with substantial facts and figures and negotiate with the constructor using the report.
It is also effective to have CMr negotiate the estimate on your behalf and report to you in the event of a major construction work.


Check points of estimate sheet and work schedule

It is not enough to know the unit price on the estimate sheet for cost reduction.
As a matter of fact, a review of the appropriateness of the range of work and if the space of construction posted on the estimate sheet is correct is very important.
There are often cases in which you are persuaded to think, "The cost of the painting work given is 1,100yen per square meter is just an average", while the work area has been exaggerated as much as 50%, for instance.
It is also essential for you to check the work schedule closely if the actually required number of days is given. We often see people in charge happy to be told by the constructor that, "We have completed the work earlier than the schedule". It may be that the constructor presented an inflated schedule to start with, such as a 6 week schedule for interior finishing work which usually could be completed in 4 weeks. In such a case, all corresponding expenses including personnel expenses and administrative expenses of the construction have been inflated as well.

Whatever the case, we believe that frequent visits to the work location to confirm the actual condition of the estimate sheet and work schedule by the person in charge of the company himself will ensure a maximum cost reduction.

We provide introduction of specialized firms for quantity survey and supportive service of your negotiations.