Corporate Real Estate

Corporate Real Estate - Corporate Real Estate (CRE) refers to the real estate portfolio that a company uses for its operational purposes - offices, production facilities, warehouses, retail spaces, and data centers. Corporate Real Estate Management (CREM) strategically manages this portfolio with the goal of optimizing real estate costs, maximizing space efficiency, and supporting the corporate strategy through appropriate location and space concepts.

Areas of Responsibility for CREM

Corporate Real Estate Management encompasses four strategic areas of activity:

• Portfolio Strategy: Decisions regarding the purchase, rental, leasing, or sale-and-leaseback of company-owned properties - alignment with corporate strategy (expansion, consolidation, relocation)
• Space Management: Optimization of space utilization - occupancy planning, workplace concepts (desk sharing, activity-based working), reduction of vacancy
• Cost Management: Reducing total costs (Total Cost of Occupancy) - lease negotiations, incentives, optimization of ancillary costs, energy management
• Workplace Strategy: Designing the work environment to promote productivity, employee satisfaction, and employer attractiveness

Relevance to the Real Estate Market

Companies are the largest demand drivers for office, warehouse, and production space in the commercial real estate market. Decisions in CREM-such as relocating, introducing work-from-home policies, or downsizing-have a direct impact on rental rates, vacancy rates, and investment values in the affected region.

Sale-and-Leaseback as a CREM Tool

One of the most important CREM strategies is the sale-and-leaseback: The company sells its owner-occupied real estate to an investor and leases it back on a long-term basis. The advantage: Capital tied up in real estate assets is freed up and can be reinvested in the core business. The disadvantage: The company loses ownership and is dependent on long-term leases, which can become costly in the event of a future relocation. In Nuremberg, major employers such as Diehl, Bosch, and various retail companies have sold properties via sale-and-leaseback transactions in the past-with varying outcomes depending on market developments.

Buy vs. Rent vs. Sale-and-Leaseback - Decision-Making Framework for Corporate Real Estate

Criterion	Ownership (Purchase)	Lease	Sale-and-Leaseback
Capital tied up	High (equity and debt in the property)	Low (ongoing rent)	Capital is freed up
Flexibility	Low (relocation is expensive)	High (lease term)	Medium (long-term lease)
Balance Sheet Impact	Fixed Assets (Property Value)	Lease Liability (IFRS 16)	Off-Balance Sheet (depending on accounting standards)
Appreciation	Benefits from it	No	Lost upon sale
Suitable for	Stable locations, owner-operated companies	Growing/flexible companies	Capital requirements in core business
Typical example	Craft business with its own building	Office users, chain stores	Logistics companies, manufacturing firms

Practical tip for property owners in Nuremberg and Franconia

We recommend that commercial landlords in the Nuremberg metropolitan region understand their tenants’ CREM strategies: Companies are increasingly optimizing their space utilization and tend to require less space, but more flexible and higher-quality space. Lease agreements with flexible space options (expansion and downsizing options), modern technical amenities (fiber-optic connectivity, flexible room layouts, high-quality video conferencing infrastructure), and attractive locations for recruiting employees are in high demand. In Nuremberg, real estate decisions by major employers such as Siemens, Datev, GfK, and Schaeffler shape the market-vacancies at a Siemens location can affect an entire neighborhood.

Frequently Asked Questions

Should companies own or lease their real estate?

The decision depends on the company’s strategy, capital structure, and time horizon. Ownership offers planning security, protects against rent increases, and holds potential for appreciation, but ties up significant capital that is not available for the core business. Leasing offers flexibility in the event of a relocation and frees up capital. The trend has been toward leasing for years-many corporations have sold their properties via sale-and-leaseback and leased them back. For medium-sized companies in the Nuremberg metropolitan region-especially in the manufacturing sector-ownership can still be advantageous if the location needs to be secured long-term and the mortgage value supports corporate financing.

What Does Total Cost of Occupancy Mean?

The Total Cost of Occupancy (TCO) encompasses all costs associated with space utilization: base rent or capital costs (for owned properties), operating costs, maintenance, cleaning, security services, moves and renovations, depreciation of fixtures, and IT infrastructure. The TCO is typically 50-100% higher than the base rent alone and is the decisive metric for CRE decisions, as it reflects the actual financial burden the property places on the company. Those who compare only the base rent significantly underestimate the actual costs-especially in older buildings with high operating costs and maintenance backlogs.

How does remote work affect demand for office space?

The increased use of remote work and hybrid work models has reduced demand for traditional desk-based workstations. Companies require less space per employee but are investing in higher-quality collaboration and communication spaces. In Nuremberg, the office vacancy rate remains moderate despite space returns, as many companies are upgrading their spaces rather than giving them up entirely. At the same time, demand for space in attractive locations with high-quality amenities is leading to a divergence: high-quality spaces remain in demand, while outdated properties remain vacant. For commercial landlords in the metropolitan region, this means that investments in building quality, flexibility, and sustainable amenities directly translate into lower vacancy rates and higher achievable rents.

For commercial landlords in the Nuremberg metropolitan region, understanding CREM strategies is not a nice-to-have but a prerequisite for economically successful leasing: Those who know how their tenants make space decisions can negotiate better, offer more flexible contract structures, and create more attractive rental properties. Particularly in Nuremberg office buildings along Augustenstraße, in the GVZ, and in the Technology Park, user-defined space concepts and short lease terms with option rights are often the deciding factor today between vacancy and long-term full occupancy.

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