Procurement strategies that power portfolio performance

As operating costs rise, strategic sourcing has emerged as a key lever for property owners and operators looking to protect asset value. The old playbook of decentralized purchasing and inconsistent vendor oversight no longer cuts it in a time when margins are tight, supply chains are volatile and inflation and labor costs continue to grow.

Investors, owners and operators must apply more rigor into how products and services are sourced, managed and delivered. Centralized, risk-aware sourcing strategies are a valuable tool for trimming expenses, driving stronger property performance, decreasing compliance risk and raising the bar for service delivery across an entire portfolio.

Without a centralized sourcing strategy, portfolios are exposed to inefficiencies, inconsistent service and more risk. Properties operating independently often struggle with:

• Cost inflation and lost savings opportunities: Without consolidated buying power and preferred status, owners lose leverage and pay above-market rates for goods and services.
• Service inconsistency: Vendors may prioritize institutional partners with clear expectations and volume potential, leading to better responsiveness and quality. Independent properties may be treated as one-off clients without long-term value, resulting in slower response times or inconsistent service levels. 
• Lack of agility: Labor and trade policies, taxes and tariffs and other rapidly shifting macroeconomic conditions can disrupt a portfolio’s supply chain and service delivery. It is critical to have a deep understanding of the impacts and where delays might occur. 
   

Decentralized procurement can also prevent owners from benefiting from outcome-based contracts and coordinated supplier management—tools that help institutional portfolios control quality and reduce risk exposure. A strategic, centralized sourcing approach turns procurement into a proactive asset protection and value creation tool for long-term portfolio performance. 

A program that aggregates purchasing power across portfolios allows owners to achieve heightened financial and operational performance. For example, JLL's global sourcing and procurement platform centralizes purchasing across $34.5 billion in managed spend, offering clients greater control across more than 71,000 vetted suppliers and 56,000 contracts. Clients purchasing direct goods through the JLL Marketplace can expect cost savings of 10–15%.

The platform combines global scale with dedicated support:

• 900+ sourcing professionals across the globe 
• Corporate category managers and account-based teams 
• Strategic supplier onboarding via the Aravo portal 
• Performance oversight through KPIs and SLAs 
• Innovation programs like SYNERGY and supplier workshops 
• Sustainable product sourcing
   

JLL’s supplier relationships are built on long-term collaboration, shared performance goals and speed to market through pre-established agreements and aligned expectations. Preferred suppliers receive training, share best practices and participate in continuous improvement initiatives. This strengthens responsiveness, raises service quality and speeds issue resolution.

This approach enables early identification of issues and facilitates benchmarking across portfolios. By consolidating these insights, sourcing teams can advise clients on broader market trends—such as the impact of new tariffs, labor agreements, or shipping delays—before they disrupt service.

“The height of COVID is a good example of how a sourcing program supports agility,” said Tracy Hrebik, Director of Sourcing at JLL. “Our sourcing network worked closely with suppliers to secure critical items like masks and cleaning supplies. Real-time communication and performance tracking ensured essential deliveries continued, even amid global shortages.”

Rather than encouraging stockpiling in response to economic uncertainty, a strategic sourcing partner can monitor market intelligence reports and implement cost planning strategies for those categories prone to fluctuation. 

With a centralized sourcing platform in place, supplier performance management should go beyond basic scorecards to promote continuous improvements, minimize operational risk and hold vendors to consistent, measurable standards. Through this lens, performance management becomes a proactive tool rather than a reporting function, designed to improve service outcomes and protect asset value.

JLL’s supplier performance program manages vendors across the full lifecycle, including five key phases: pre-screening and onboarding, embedding performance criteria in contracts, maintaining compliance throughout delivery, facilitating regular business reviews, and using those insights to refine strategies.

Strategic sourcing plays a frontline role in mitigating operational and legal risk. A procurement team can manage certificates of insurance (COIs), ensure rigorous supplier vetting and evaluate contractors against compliance with labor laws and modern human rights standards.

This is especially critical in high-risk categories like janitorial and security services, where improper hiring practices have led to legal challenges across the industry. By embedding due diligence into onboarding and maintaining documentation throughout the supplier relationship, sourcing teams help reduce exposure for owners and operators.

Vague vendor contracts can also be a significant source of risk. Too often, inherited contracts lack specificity, which can create confusion around deliverables and accountability. One misread line can change an entire operational flow, resulting in a significant loss of time and money. 

Strategic sourcing is both an art and a science—requiring not only deep vendor relationships and nuanced category knowledge, but also the discipline of clear performance benchmarks. JLL develops scope-specific contracts using an outcome-based model that enables:

• Customized KPIs tied to portfolio goals 
• Greater legal clarity and enforcement capability 
• Proactive supplier performance conversations 
   

This model ensures expectations are clearly defined, measurable and enforceable, helping to align service delivery with long-term operational and financial outcomes.

As portfolios scale and regulatory pressures mount, sourcing and procurement are being redefined from back-office operations into strategic growth functions that make real estate more profitable. By centralizing spend, holding suppliers accountable, and embedding risk management into every contract, institutional owners can achieve real NOI impact.

When procurement is aligned with investment strategy, the results are tangible. Savings achieved through sourcing—whether from reduced maintenance costs, smarter contract terms, or supplier consolidation—can directly improve net operating income. Those improvements, when capitalized, enhance the overall value of the asset and position the portfolio for stronger long-term performance.

Contact us to learn how our strategic sourcing platform can help your portfolio reduce risk, increase NOI and elevate supplier performance.