JLL: Fortune 1000 Companies Lose Billions on Mismanaged Real Estate Budgets

JLL

The Fortune 1000 are mismanaging their real estate budgets, blowing capital plan targets for office real estate to the tune of $12.2B every year, JLL research says. For illustrative purposes (see the cool infographic), the money lost equals three One World Trade Centers or one World Cup hosting.

"Until companies start to manage and align their capital plans with the true goals and objectives of the firm, the trend of overspending and underspending will continue in the future," JLL Global Board Chair Jim Dobleske tells Bisnow. Mismanagement is sometimes caused by incorrect forecasts, inflexibility or ineffective technological monitoring tools.

In total, 28% of this comes from overspending. The remaining 72% comes from underspending. While saving 72% of your money sounds good, it’s actually pretty bad, considering this money could’ve been used to produce higher returns on investment, such as investing in corporate strategies for company growth.

"Firms need to look at the capital planning process as a continuous cycle and not a once-a-year event," Jim tells us. He says using a proven capital planning process will be key in managing capital more efficiently.

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