ATR NEWS....

FOR IMMEDIATE RELEASE
March 3, 2004

HOW TO SAVE A MILLION DOLLARS 50 SQUARE FEET AT A TIME

Benchmark survey of space use by engineering firms finds wide range of square feet per employee.

Two national engineering firms asked their corporate real estate service providers to conduct a benchmark survey of how large engineering firms make real estate decisions and what sort of office space they used.

The survey targeted engineering firms with 500 or more employees and with 10 or more locations. Participation from engineering firms was very high, with 48 of the 110 firms responding.

Results of the survey revealed that the amount of space firms allocate per employee varies widely from 150-175 square feet to over 300 square feet. The median amount is 226 to 250 square feet per employee.

“For a company with 1,000 employees that pays an average rental rate of $20 per square foot across their portfolio, for example, 50 square feet per employee amounts to 50,000 square feet and $1 million per year in rent. If this amount can be saved, it will drop directly to a firm's bottom line,” said John Reynolds, CoRE Partners, Englewood, Colo.

CoRE Partners and Gola Corporate Real Estate, Plymouth Meeting, Penn., both members of the Alliance of Tenant Representatives (ATR), conducted the survey at the request of two of their largest engineering clients, MWH Americas and Gannett Fleming.

“The two firms wanted benchmark data for their own space planning needs, and then offered to share it with other engineering firms,” said Mark Gola of Gola Corporate Real Estate. “Real estate is the second or third highest cost on most companies’ income statement. In today’s softer economic climate, especially, we’ve found that engineering firms are interested in investigating ways to intelligently reduce their real estate costs.”

Reynolds said real estate organizations such as NACORE International and CORENET Global have conducted benchmarking or metric surveys of their members, they included firms of all industries. None focused exclusively on engineering firms like this survey did.

The survey found that firms that have either their finance and accounting people or their real estate departments manage their real estate are more space efficient than those that relegate this responsibility to the heads of their local offices. The latter tend to use 50+ square feet more per employee.

Corporate space guidelines have a similar impact on space utilization. The median allocation per employee for firms with guidelines is 50 square feet less than those without. Companies that have put systems in place to more carefully control their real estate, tend to be more efficient.

CoRE Partner and Gola Corporate Real Estate will also use the data to inform their engineering clients as part of the services they offer as members ATR. ATR members are commercial real estate advisors who specialize exclusively in serving the needs of tenants and buyers. ATR has member firms nationwide, and an important segment of their business is with engineering firms. To locate an office near you, see their web site at http://www.alltenrep.com.

For a copy of the survey results, contact John Reynolds at 303-796-7800 ext. 11 or Mark Gola at 610-828-2424 ext. 18.