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Organizational Strategy in Commercial Real Estate: Adapting for Long-Term Success

Updated: Jan 15

How CRE Companies Are Transforming Their Structures to Meet New Demands

The commercial real estate (CRE) industry is experiencing significant shifts driven by rapid technological advancements, sustainability concerns, and evolving workplace dynamics. These changes have forced CRE companies to rethink their organizational strategies, as outlined in a recent survey conducted by Gunnar Gombert Strategy Consulting in June 2024.


In this blog, we explore the survey's findings, highlighting the essential adjustments in competencies, team structures, and the strategic organizational transformations required for long-term success in a volatile market.

Sustainability2
Implemented organisational measures until 2024 by CRE companies Source: Survey Gunnar Gombert STRATEGY CONSULTING, 17 June 2024, Frankfurt am Main

1. The Need for New Competencies in CRE

The survey results showed that new competencies are in high demand, ranking as the top priority for CRE organizations globally. This aligns with broader industry trends emphasizing the need for expertise in areas such as:


  • Technology and Digital Solutions: The integration of advanced technologies, including PropTech and AI, has become crucial for optimizing property management, automating processes, and enhancing tenant experiences.

  • Data Analytics: In a data-driven world, the ability to analyze and extract actionable insights from vast amounts of property and market data is essential for decision-making and portfolio optimization.

  • Sustainability: As environmental regulations tighten and investors prioritize ESG (Environmental, Social, and Governance) criteria, sustainability expertise is increasingly critical for both compliance and competitive advantage.

  • Workplace Strategy: With the rise of hybrid work models, CRE companies must design spaces that meet new employee needs while maximizing the value of their assets.

  • Change Management: Navigating organizational transformation requires strong leadership in change management, particularly as companies restructure their teams to align with new market realities.


These competencies are becoming essential as the industry moves away from traditional skills and adapts to a more dynamic, technology-driven future.



2. Organizational Structure: Adjustments for Liquidity Preservation

In response to current market challenges, many CRE firms are restructuring their teams to improve efficiency and preserve liquidity. The survey indicates that organizational structure adjustments and headcount reductions are common, as firms look to streamline operations without compromising on core capabilities. This shift reflects a global trend toward more agile and flexible organizational models.


Key Drivers of Structural Changes:

  • Cost Efficiency: With increased pressure on margins, companies are reducing non-essential roles and focusing resources on high-impact areas like technology, sustainability, and analytics.

  • Scalability: As market conditions fluctuate, scalable organizational models enable CRE companies to quickly adjust to changing demands, ensuring they can capitalize on growth opportunities while controlling costs.

  • Liquidity Management: By optimizing their structures, companies can preserve liquidity, a crucial factor in navigating the current market cycle and ensuring long-term resilience.



3. Anticipating Major Restructuring in CRE

Globally, the survey revealed that 66% of CRE leaders anticipate near-term changes to their team structures, with nearly one-third expecting major restructuring efforts. This highlights the growing recognition that "structure follows strategy"—organizational changes are essential to achieving strategic goals in today’s market.


What Restructuring Might Involve:

  • Centralizing Key Functions: To improve operational efficiency and decision-making, many companies are consolidating functions like finance, IT, and HR.

  • Adopting Flexible Work Models: The rise of remote and hybrid work is pushing CRE firms to rethink their office footprints, as well as how they manage and support their workforce.

  • Outsourcing Non-Core Functions: By outsourcing non-differentiating activities, companies can focus their internal resources on areas that drive growth and value creation.



Conclusion: Strategic Organizational Changes for Sustainable Growth

The CRE industry is at a critical juncture, where organizational transformation is not just an option but a necessity for long-term success. The demand for new skills in technology, data analytics, and sustainability is reshaping the way CRE companies operate. As headcounts are adjusted and structures streamlined, these changes will help firms preserve liquidity and maintain agility in a challenging market environment.


At Gunnar Gombert Strategy Consulting, we understand that structure follows strategy. Our team not only guides clients in developing comprehensive business strategies but also supports them in making the necessary organizational adjustments to implement those strategies effectively.


Contact us today to learn how we can help your company align its organizational structure with your long-term strategic goals and thrive in a rapidly evolving real estate landscape.

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