This Fortune 100 automotive manufacturer’s Corporate Real Estate (CRE) department established a strategic partnership with UGL Equis to provide globally integrated real estate management services for its 97 million square foot NAFTA portfolio (US, Canada and Mexico). Specifically, the CRE group wanted to:

1. Align its real estate strategy with its core business strategy;
2. Obtain best-in-class real estate transactions; and
3. Create a partnership with UGL Equis in order to help Treasury address costs, lack of resources, controls, standards, and processes.

To date, UGL Equis and the client’s CRE department have acted in partnership to:

• Develop a specific strategy for assets for asset planning and project initiation supports the individual business unit’s core business goals;
• Reengineer and standardize processes and reports;
• Institute appropriate financing structures that include both traditional and off-balance sheet debt financing;
• Save costs and create efficiencies by streamlining the PO process, which had previously allowed business units to circumvent the CRE group, and which resulted in higher real estate costs;
• Implement performance tracking for facilities and service delivery; and
• Establish a benchmark of 120 days for transaction cycle time.

Throughout our relationship, UGL Equis has continually helped to refine the client’s centralized leasing management model, policies and business unit relations. In one specific example, we examined consolidation opportunities for facilities around the country. Study factors included:

• Proximity to employee and customer bases;
• Local infrastructure;
• Existing space utilization;
• Capital costs;
• Remaining lease obligations, and;
• Lease terms were all weighed against potential cost savings.

The study weighed all considerations against potential cost savings. Implementing the recommendations consolidated 28 offices down to 13 locations (Detroit, Philadelphia, Pittsburgh, Kansas City, Los Angeles, Minneapolis, Milwaukee, Syracuse, St. Louis, and Washington, DC). Total real estate savings to the affected business unit reached an excess of $5 million annually, more than 17% reduction versus prior conditions. An additional 15% reduction is projected for when the project is scheduled to be complete.

Achievements reached by this client - UGL Equis partnership include:

• Improved public warehouse transactions and reduced the number of service contracts that include a real estate component;
• Achieved high degree of internal business unit satisfaction by meeting or exceeding real estate performance criteria;
• Shortened transaction cycle times while continually besting the 120-day benchmark;
• Saved $5.8 million through restructuring, lease terminations and subleasing strategies;
• Effected a 16% reduction in annual leased obligation and square footage for Corporate Finance division;
• Reduced annual lease obligation by 28% and total square footage by 47% for the Sales and Service business unit; and
• Provided more than $47 million in real estate portfolio cost avoidance and savings to date.

UGL Equis has successfully completed many individual transactions across the portfolio. Some highlights include:

• Mexico - Generated $23 million in immediate savings through a creative lease financing strategy for a 256,000 SF Mexico headquarters.
• Auburn Hills, MI - Completed 130,000 SF, build-to-suit diagnostics center at nearly $2.25 million under budget whereby reducing the estimated cost of the project by 15%.
• Charlotte, NC - Client CRE & UGL Equis successfully renegotiated and renewed a Sales & Marketing lease resulting in annual savings of $161,180.
• Milwaukee, WI - Client CRE & UGL Equis successfully consolidated, reduced and renewed Sales & Marketing leases resulting in annual savings of $277,996.
• Syracuse, NY - Client CRE & UGL Equis consolidated, reduced and renewed Sales & Marketing leases resulting in annual savings of $192,482.