A global telecommunications company had more than 5,500 heavily equipped properties not being utilized optimally, which resulted in wasted space and wasted dollars. The company was tasked with monetizing these under-utilized real estate assets to generate more than $100 million in additional revenue.

JLL Technologies implemented a solution that helped them:

• Identify 150 property candidates to consider monetizing
• Measure utilization based on power consumption rather than desks and headcount with a customized solution
• Make strategic and proactive decisions about which assets to monetize and what disposition approach to use with flexible insights into portfolio use and local market conditions
• Deliver real value through monetization of underutilized assets

A global telecommunications company had a real estate problem. The shift from landlines to cell phones meant that less equipment was needed for their customers to make calls. This freed up a significant amount of real estate for the telecom company. In fact, more than 5,500 heavily equipped properties–called Central Office locations–were not being utilized optimally, resulting in wasted space and, therefore, wasted dollars. The company was tasked with monetizing these under-utilized real estate assets to generate more than $100 million in additional revenue.

The telecom company partnered with JLL Technologies’ (JLLT) Data and Business Intelligence (BI) Advisory team to develop a customized solution for analyzing and optimizing their expensive Central Office assets.

Looking at data through different lenses
Pivoting from the traditional office building utilization measured solely on desks and headcount, JLLT created a solution to assess space utilization effectiveness of the customer’s real estate based on power consumption.

By measuring total power usage along with power density for each property, the solution compares how much energy is being used within each building to that of similar-sized traditional real estate buildings, creating important benchmark measurements and painting a better picture of the company’s space utilization. The solution also captures data on the market trends in each property location.

Aligning data

The solution then takes the data gleaned from the benchmark analysis and aligns it with data from JLL’s Capital Markets group to deliver an estimated value for each property to assess whether they are in favorable markets to sell, lease, or leaseback excess space. This allows the telecom customer to make additional money in hot markets or hold to wait for better market conditions; buildings deemed high value and not fully utilized, for instance, are prime targets for monetization.

Narrowing down the list

Starting with 150 buildings, JLLT quickly narrowed down the list to 15 prime monetization targets. With those 15 buildings, the customer worked closely with JLL’s brokerage team to come up with a disposition strategy for five of the buildings. Whether a vacant building sale, partial sale, or full building sale with leaseback, the optimal approach is determined to garner the highest return.

Identified 150 property candidates, five of which have been monetized to date.

• Customized solution developed to measure utilization based on power consumption rather than desks and headcount
• Flexible insights into portfolio use and local market conditions helps make strategic and proactive decisions about which assets to monetize and what disposition approach to use
• Real value delivered through monetization of underutilized assets