Property and Facilities Management Report: Case Study Analysis

This report presents a comprehensive analysis of property and facilities management, based on a provided case study. It addresses key areas including life cycle management, covering cost-benefit analysis, return on investment, and valuation methods. The report delves into lease management, detailing essential documents, agreement requirements, and negotiation strategies. Financial management is examined, focusing on cost analysis, budgeting, and responsibility. Risk management is also addressed, identifying and evaluating various types of risks involved. Space planning is analyzed, including plan requirements, execution, and responsibility. The report concludes with recommendations, considering stakeholder involvement, project benefits, future cost commitments, environmental considerations, cash flow, negotiation strategies, reporting requirements, risk mitigation, and staff amenities. The report aims to provide insights for executive management in relation to the proposed commercial property management as presented in the Case Study. It also identifies fundamental principles of Property and Facilities Management, linking the case study data and course materials to support comments and recommendations. The report format is designed for presentation to executive management.

Running head: PROPERTY AND FACILITIES MANAGEMENT
Property and Facilities Management
Name of student
Name of University
Author’s Note

PROPERTY AND FACILITIES MANAGEMENT 1
Table of Contents
1. Life Cycle Management..................................................................................................................3
Undertaken Cost Benefit Analysis...........................................................................................................3
Realized the Return on Investment..........................................................................................................3
The valuation that has taken place...........................................................................................................4
Those responsible for efficient returns.....................................................................................................4
2. Lease Management..........................................................................................................................5
Documents that are needed to draft..........................................................................................................5
Requirements of the agreements..............................................................................................................5
Understanding the negotiation that is taking place..................................................................................6
Who is responsible for managing what?..................................................................................................6
3. Financial Management.....................................................................................................................7
The cost involved and Costs incurred......................................................................................................7
Cost budgeted or monitored, reported......................................................................................................7
Costs responsibility..................................................................................................................................8
4. Risk Management............................................................................................................................8
Different Type of Risk Involved..............................................................................................................8
5. Space Planning...............................................................................................................................13
Plan Needed...........................................................................................................................................13
Performing the space planning...............................................................................................................13

2PROPERTY AND FACILITIES MANAGEMENT
Reported, Monitored and performed the space planning.......................................................................14
Space Planning Responsibility...............................................................................................................14
6. Final Recommendation..................................................................................................................15
Stakeholder involvement........................................................................................................................15
Benefits of the project............................................................................................................................16
Future cost of commitment....................................................................................................................17
Environment considerations...................................................................................................................18
Cash flow requirements.........................................................................................................................18
Negotiation and documentation strategy................................................................................................18
Reporting requirements..........................................................................................................................19
Risk identification and reduction...........................................................................................................19
Staff amenity and future growth............................................................................................................20
7. Reference.......................................................................................................................................21

3PROPERTY AND FACILITIES MANAGEMENT
1. Life Cycle Management
Undertaken Cost Benefit Analysis
Important progress requires to be made for the cost benefit to manage the life cycle of the
current office and analyse the infrastructure of the future workplace. The project benefits and
cost would be measured regarding the total equivalent value of money that benefits the project's
community (Azzouz et al., 2017). The senior management decides to provide benefits regarding
$ 750 amount for a current rental that is considered for the project. The growth is forecasting at
10% per annum were current density is 8m2 per person. The value could be either less than or
greater than the market value. In this project, the management has provided an estimated value of
around $500,000 for about every year until the next move. The analysis of the cost-benefit that
needs to be undertaken in this project is to approach and decide by putting the benefits on one
side and the cost on the other side (Säynäjoki et al., 2017).
Realized the Return on Investment
For the goals of the business, the needle can move to achieve the space of the office for
the future. The physical office can benefit the business greatly by ensuring productivity for
widening the office. The facility manager would align the space of the office and create an
environmentally efficient to overarch the business goals which have a higher return on
investment (Muehlemann, & Wolter, 2014). The facility manager would upgrade the office for
making the business case and try to optimise the current space. There will be a meeting in-house
with ease and convenience for the customers. A comfortable room for a meeting, having a space
for easy-to-navigate and company values that have innovative technologies. The bottom line for
minimising the impact of the costs would be to use the resources that could maintain the

4PROPERTY AND FACILITIES MANAGEMENT
equipment consistently. It is helpful for the managers to use space management tools for the
square footage (Lavy, Garcia, & Dixit, 2014). From the workplace management system, the data
and visuals can be used to reduce the internal costs of the office (Miller, Goore & Uddenberg,
2018).
The valuation that has taken place
Valuation for the office mostly contains the elements that are necessary for the net annual
value. For office valuation, some Comparative Principles are used for valuation and be able to
recognise that some of the parts of the office space are consistently valuable (Damodaran, 2016).
The most valuable space for the office users are the elements of the office that have a higher
value (Waber, Magnolfi & Lindsay, 2014). Additionally, accommodations can be made on the
basement, or the second or higher floor which may have a lower value than the first or the
ground floor of the space-dependent that have access to nature (Şahin et al., 2015). It is better to
mention the valuation that has the net internal area of the room. The office accommodation
valuation with the office space revolved around the office classification system and based on the
separate classifications the final classification is made (Langevin, Wen & Gurian, 2015). It is
difficult to determine the services that are inclusive of paying the rental fees for the office space
and would, therefore, be valued at the office level properties (Schor & Fitzmaurice, 2015).
Those responsible for efficient returns
The people who are responsible for the efficient return include the commercial tenant.
This tenant is the external parties for the lease space of the office that would be defined for some
period (Chau & Wong, 2016). The next is the facilities management information system who
will be helpful in space management (Love et al., 2014). A hot desk that could be used by multi-
workstation and different employees can easily access it (Kim et al., 2016). The senior executive

5PROPERTY AND FACILITIES MANAGEMENT
is the staff members of the office that has the managerial post such as the director, CEO, vice
president, CFO and more.
2. Lease Management
Documents that are needed to draft
For office space, a business has to operate by drafting a lease for the rights of the
property. The lease itself is the legal document for renting the building for the office space
(Remøy, & van der Voordt, 2014). It gives the power to sue them if the payment is not made.
The owner can even charge for some security deposit for some duration of the lease or can either
hire an attorney or draft legally an enforceable lease that can be used multiple times (Furth-
Matzkin, 2017). There are some specific terms written on the agreement and is organised to
outline the document. Identifying the property owner is necessary.
Requirements of the agreements
The agreements are required at a time when confirming that the company is about to rent
some space for the office. The agreement contains the information on the length of time that the
company need to lease for the office space (Janda et al., 2016). There is some major construction
required in the commercial office space before moving into the new area. The terms and
conditions are inserted in the contract which can protect the interests and prevent some
misunderstanding that comes in the future which usually leads to disputes, trouble, litigation or
financial losses (Kumari, & Nakano, 2016). The lease agreement gives rights to the company to
rent the space for the office. The eight months of lease agreements is a common form of
agreement that is used for the commercial properties (Ajupov, Kurilova & Ozernov, 2015). It is
important to specify the duration for the lease that is to be made. It is very much considered that

6PROPERTY AND FACILITIES MANAGEMENT
no mistake is made which may be costly for the owner of the building who is giving the space
for rent. The lessee can set the installation costs for longer depending on the need of the
company and get a lot of investment on installation and set enough time to exploit investments
(Chapman, 2015).
A budget is very much important to be created before processing a lease for the office space
(Bailey, & Pill, 2015). The expenses of the office space and the utilities need to be considered
and can request the landlord to provide us with the previous year billing statements that give the
estimate of the utility cost (Simons et al., 2017).
Understanding the negotiation that is taking place
Negotiation of a legal document can be understood better while dealing with renting,
leasing or licensing arrangements for the office space. A commercial property lease negotiation
is a process which is very complex and may even sometime get wrong. The negotiation is done
with a best possible lease can help the company to get hire enough cash for the employee. One of
the best ways to negotiate for a lease of office space is by preparing a Letter of Intent (LOI) or a
“term sheet” can be taken into consideration which can be easily present to the owner of the
building (Stein, 2015). A good space could be achieved with the best possible deal. The
negotiating leverage could be minimized by hedging them with the existing space. At the
beginning of the negotiation, it would be easy to know exactly the total value of the deal that
needs to be achieved. It is better to propose the deal initially and know when and how to stop the
negotiation. It is better not to let know the owner of the building about what the company feel
about the space which will be helpful in making the negotiation better (Ozmec et al., 2015). The
office space lease determines the length of the lease term that the company has to receive. Later a
longer lease could be signed if space meets the current and future space needs.

7PROPERTY AND FACILITIES MANAGEMENT
Who is responsible for managing what?
The tenant, faculty manager, are responsible for looking into the office space were
sufficient or not. The employees who are working in the company are responsible for keeping the
office space clean and acquire only that much space which is provided to them.
3. Financial Management
The cost involved and Costs incurred
The cost that is involved in managing the space for the office is the current rent,
additional rent, reconfiguration cost, maintenance charges and the additional cost of the
employee. The current rent for the additional space in the same location would be $ 75,00,000,
for relocation the amount taken to be $ 90,00,000 and for reconfiguration of the current location,
the amount could be spent for $75,00,000. Additional rent that has been considered for the same
location would be $37,50,000. Reconfiguration cost would be $ 25,00,000. The maintenance
charges for the same location is $ 15,00,000. For relocation, the maintenance charges would be
taken to be $ 5,50,000. For the reconfiguration, the maintenance charge is $ 7,50,500. The cost
of the employee for additional space in the same location is $ 1,25,000. For the relocation of the
employee, the cost would be $1,50,000. Additional employee cost for reconfiguration would be
$75,000. The total flow of the requirement has been provided in the cash flow requirement table
section.
Cost budgeted or monitored, reported
The budget has been done depending on the rent of the current location, additional rent,
maintenance charges, employees additional cost and reconfiguration cost. To fit all the 500
employees in the office, the manager has provided each employee with small cubicles with

8PROPERTY AND FACILITIES MANAGEMENT
sufficient space taking into consideration that they can comfortably work. Each employee will be
provided with one system. Providing one single long light for the complete row to save
electricity. Providing on the single door where movement can be captured for all the employee in
that case on one camera would be sufficient, and there will be no need for multiple devices.
Costs responsibility
The Human Resource is responsible for taking care of the need and expenses of the
employee. The food snacks and tea that are provided to the employee have some amount that
cost that the company has to pay which is included in the office. The cleanliness and the
maintenance charges are all undertaken into consideration so that every comfort zone is provided
to the employee who would be helpful for the employee growth. The administration manager and
the networking team will be responsible for the network issue, internet issue and their cost. The
guard who will be taking care of the visitor.
4. Risk Management
Different Type of Risk Involved
Risk Type Impact Probabilit
y
Responsibl
e Person
Mitigatio
n
Sponsor
Risk: The
sponsor can
have some
business
plan to
The two primary
subsets of the sponsor
risk are:
1. Asset
management
risk: The
High High Asset
Manager
The manager can
assess the risk and
mitigate the risk
for the business
operation.

9PROPERTY AND FACILITIES MANAGEMENT
execute and
can deliver
targeted
results to
the
stakeholder.
strategic level
of the business
plan is executed
by the asset
manager. The
attentiveness
and expertise of
the asset
manager are
translated the
plan of the
business to get
a successful
outcome.
2. Property
management
risk: The
business plan
gets executed
with the asset
required for the
individual
customer

10PROPERTY AND FACILITIES MANAGEMENT
service.
Debt
Risks: Debt
risks leads
to
foreclosure
that is
incurred
over the
risks that
are
leveraged.
1. Over leverage:
Depending on
the strategy of
the asset which
can leverage
with
compelling
justification.
2. Debt maturity
risk: The net
operating
income is
compromised
where the
project is
unable to get
new loan and
investor are
unable to infuse
the capital that
is necessary to
refinance the
High Medium Investors The company
keeps on working
actively in
maintaining the
debt by reducing
the interest rates
and extending the
terms of the loan.

11PROPERTY AND FACILITIES MANAGEMENT
asset which is
at risk by
default
Tenant
Risk:
Tenant has
two primary
subsets
1. Rent roll
quality: it refers
to the
creditworthines
s and stability.
It is highly
desirable or less
risky. The risk
for the single
tenant is great
during the lease
term and can
vacate at
expiration.
2. Rollover risk: It
refers to term
left on property
leases which
can affect the
single tenant
Mediu
m
Medium Lease
Tenant
Screening the
tenant carefully to
mitigate the risk
to get the most
reliable tenant
who can pay rent
every month
within the time
mention.