Real Estate Assets Offer Shelter to Tumultuous Energy Industry

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RISMEDIA, July 18, 2008-Due to intense scrutiny by both government regulators and consumers alike, global energy providers face a decade of change and uncertainty. There are many uncontrollable global economic, social, and business forces that continue to exist in the energy industry, yet the utilization of commercial real estate transactions allows energy companies to both reduce operating costs and improve productivity.

Energy companies are surprised by the financial impact that aggressively managed real estate assets can have on the rest of their business. Lori Brown, President of Brown Real Estate Advisors in Chicago, IL is an expert in managing real estate portfolios for energy companies. Her following key recommendations offer suggestions for energy companies to maximize the impact of real estate on overall business performance.

Trim the fat: Energy companies prefer to avoid tying up their capital in obsolete buildings, yet the reality is that the land is often worth more than the building. By selling underutilized operations centers and investing capital back into updated, efficient real estate facilities, companies advance their growth and reduce their annual capital expenditures.

Invest in technology: Current technologies of the energy industry are becoming obsolete, yet energy companies are recognizing the need to invest in new technologies to create new work practices that meet the demands of today. Technology is an enabler for energy companies to invest in the future, and the capital gains from the sale of real estate assets allow for an emphasis on technology to be possible.

Foster a teamwork environment: High priced, underutilized office space can be relocated to more cost effective buildings that redesigns the way energy companies work. Energy companies recognize the value of a work environment that fosters learning, creativity and communication. Decreased operating costs reduce underutilized space so work processes can be viewed on a holistic level and business practices can be streamlined. Functions such as customer service, training, meter and repair shops can be consolidated to improve both employee productivity and customer satisfaction.

Economically Driven Location: Site selection decisions have a large impact on energy companies’ business from servicing the needs of rate payers to attracting the optimal employee demographic. Real estate can be a successful recruiting tool if a company’s corporate headquarters, call centers and trading operations are geographically convenient to capture the interest of young recruits with desired skills in technology, engineering, and sales. Operation centers located near the company’s target demographic minimizes transportation costs and improves the speed to customer.

Have a backup plan: Our world runs on energy, and even in the event of a natural or unnatural disaster, customers and regulators alike expect power and service to continue uninterrupted. In the instance of an energy disaster, a single location for call and data centers threatens the energy service to the entire system. A network of dispersed, smaller call and data centers provides security protection of these critical functions.

Lori G. Brown: With over 20 years of experience as a prominent commercial real estate tenant representative, Lori Brown has launched her new woman-owned and led company, Brown Real Estate Advisors. Brown Real Estate Advisors provides real estate brokerage and advisory services to mid-cap companies.

For more information, visit www.brownrealestateadvisors.com.

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