Every time a capital program is delayed, it triggers a chain reaction of delays to other projects and initiatives within your portfolio. Your capacity to execute real estate projects is limited, and wasted time and resources means accomplishing fewer remodels, relocations, openings, or format shifts than you otherwise could have.
When you manage a large real estate portfolio, delays can feel unavoidable. But often, these delays are unforeseen—not unavoidable. They come from fixable problems, like faulty processes and poor visibility. And when every delay could negatively impact revenue, customer experience, employee experience, brand presence, or commitments to investors, you can’t afford to have any unnecessary delays.
Retailers in particular have had trouble preventing delays in the face of increasingly complicated lease strategies (there are more valid choices than ever) and an overwhelming volume of store changes taking place throughout the portfolio. Today, delays both carry greater consequences, and are more likely to occur.
But that doesn’t have to be the case for your organization.
In this article, we’ll examine six causes of unnecessary delays in CRE portfolio management, along with the organizational changes needed to avoid them.
Causes of unnecessary delays in real estate operations
Whether you’re breaking ground on a new store or remodeling an established one, avoidable delays are often rooted in lack of visibility and inefficient or poorly managed processes. Here are six underlying causes of preventable delays.
1. Needless approval processes
Approvals play an important role in maintaining visibility and control over your real estate operations. They ensure standards are implemented consistently and that stakeholders can effectively prioritize strategic options.
But approval processes can also create delays, and they’re not always necessary. The last thing you want is for work that obviously needs to be done and certainly will be done sitting in a queue waiting for someone to approve.
We generally see this manifest in two scenarios: approvals related to in-progress projects, and approval requirements coming from legacy processes that are no longer needed.
Approvals relating to projects in progress
Time and time again, we’ve seen customers deal with unnecessary friction related to change order approvals. When unexpected work is associated with an existing project—such as a mold issue or infrastructure damage discovered in the middle of a remodel or retrofit—project managers should have the freedom to begin executing this work immediately to prevent (or reduce) delays to the current project, the capital program it belongs to, other work that depends on the same labor and equipment, and store operations.
Implementing a process with parameters to “pre-approve” this type of work ensures that the approval process won’t pause work-in-progress unless absolutely necessary—like when the cost of proceeding could outweigh the cost of the delay.
Legacy approval processes that are no longer necessary
Another surprisingly common way that approvals create delays: legacy approval processes. We often see this when someone in leadership prefers a more hands-on approach to particular initiatives, or they’re used to a particular system, and these preferences manifest in new approval processes. Then the executive leaves the company, and the approval process remains in place, whether it’s really needed or not. This can also occur through acquisitions, where one company passes an unnecessary approval process to the other.
2. Poor project sequencing
Say you’re remodeling 30 stores for your new modernization program. You prioritize them based on performance and brand presence, ensuring that you secure the biggest wins first.
But this modernization program isn’t your only program in progress—there’s other construction work happening throughout your portfolio that depends on some of these same resources and even affects some of the same locations. Coordinating this work and enabling nearby projects to share labor, materials, and/or equipment could mean more jobs get done this year.
When real estate projects are executed in the wrong order, it can delay work that comes up later in the sequence, or interfere with other programs by using resources right before they’re needed elsewhere. Some jobs have to wait for resources or approvals to proceed, while others are ready to go as soon as you give the green light.
Programs don’t happen in a vacuum, and shouldn’t be prioritized as if they do.
3. Inefficient use of finances
You can’t execute real estate projects without capital. A project can have everything else lined up and ready to move forward, but if the funds aren’t available, it’s stuck on hold. So it’s extremely important that you use your finances efficiently.
At Tango, we often see avoidable finance delays when projects are completed or cancelled. Depending on how your system defines the relationship between projects and programs, it may not release funds back to the associated program when a project is completed or cancelled. Instead, the leftover funds that have been allocated to these projects remain locked until someone manually reallocates them. Meaning other projects have to wait, even though the resources should be available already.
This is frequently an issue with spreadsheets and traditional project management systems, which weren’t built for program management.
Tango Projects eliminates this type of delay by connecting each “child” project’s budget to its “parent” program’s, and automatically returning leftover funds to the parent budget upon completion or cancellation.
It’s not just cancelled and completed projects that cause finance issues. Despite knowing that real estate projects will almost always include unplanned work, many organizations encounter delays because they don’t have contingency funds in place. By preparing in advance with a “just in case” budget, project managers can keep momentum when a change order or unexpected work arises. And with the right structuring, program directors can incentivize project managers to use these resources cautiously, allowing them to roll over contingency funds to future projects.
Worst of all, however, are delays caused because resources were tied up by construction work that never should have happened in the first place.
Too often, lack of portfolio visibility allows capital programs to include locations that are slated for closure or relocation. When stakeholders can’t access lease data in their respective tools, and critical dates or decisions aren’t clearly communicated, it increases the likelihood that resources will be wasted on remodels and store improvements you won’t benefit from, all while delaying work that would’ve mattered.
4. Employee bottlenecks
Labor is a natural constraint as you plan and coordinate real estate projects. But often, real estate operations encounter unnecessary delays not because there are too few workers, but because internal expertise and control over processes have been concentrated into too few people.
Only a handful of people know the inner workings of your real estate initiatives—and often, all that knowledge only exists in their heads. Their work is scattered across spreadsheets, emails, and other documents that only they know how to navigate. Others can’t easily observe and learn how they analyze opportunities, make strategic decisions, or execute processes. No one knows how to replicate their work, so it keeps piling up on their plate.
It feels like a capacity problem, but it’s actually a visibility issue. Establishing a single source of truth for real estate initiatives—including all communications, analysis, and documentation—keeps institutional knowledge from being lost as roles change and people leave the company, and creates more opportunities for delegation to prevent delays.
Tango Projects centralizes all program documents, communications, and decisions into a single strategic hub. With intuitive dashboards, your team can examine every project’s status, progress, and plans.
5. Overlooked dependencies
As you coordinate remodels, reformats, relocations, and other real estate projects throughout your portfolio, you don’t just have to watch out for dependencies between projects—the interdepartmental dependencies involved in a single project can cause delays too, if you aren’t careful.
When capital program managers select locations for real estate initiatives, they often lack visibility into upcoming lease decisions—especially as lease portfolios grow increasingly complex, and offer a wider range of legitimate strategic options to consider. This increases the likelihood of queuing up locations that won’t be part of your portfolio in the near future.
Suppose you’ve planned a remodel for a location that’s coming up for renewal. Even if your lease department plans on renewing, you need to plan around dependencies to avoid delays to this project or others:
- Labor and materials may be ready before you can legally begin work due to lease negotiations.
- The landlord may have other plans for the location that could impact your remodel.
- Starting the remodel before negotiations are complete could affect the negotiations themselves, particularly for components like a tenant improvement allowance.
- There may be a holdover clause during renewal negotiations, which could mean risking that the landlord ends negotiations and terminates the agreement mid-remodel.
These details become more impactful the more interconnected projects are. If a relocation affects multiple stores, or a series of remodels will share contractors and equipment, a single unnecessary delay can quickly become several.
Tango Projects helps you coordinate around dependencies by accurately modeling the relationships between projects and visually representing the sequence of events, so you see how work overlaps and where conflicts are likely to arise.
6. Lack of change management
CRE portfolio management is a continuous process of change management. Retailers are navigating intricately connected webs of real estate initiatives at unprecedented scale—not because their portfolios are necessarily larger, but because their strategic options are more diverse and the volume of changes happening at once has grown as a result.
You don’t have to just plan around moves like renewals, remodels, and relocations. Throughout your portfolio, some locations may have break options, kick-out clauses, subletting approval windows, expansion and contraction clauses, co-tenancy clauses, and other terms that could change your best strategy for addressing problems or improving CRE alignment.
Every decision involves tradeoffs, and retailers need to recognize how the timing and prioritization of one action impacts others. But stakeholders don’t always have the portfolio-level visibility they need to identify potential conflicts and tradeoffs when making a decision.
Maybe someone decides to convert a poorly performing location into a specialized pickup-and-return center with a smaller footprint, so they commit resources to implementing this change. Someone else, unaware of this planned change, sees the underperforming location and begins the process of exercising a termination clause that was made available due to low sales. Alternatively, maybe this is a lease you’re locked into, and there are already plans in progress to open a smaller, specialized format nearby.
When stakeholders have visibility into all proposed and active initiatives and the full range of possibilities for a location, they can navigate tradeoffs to make the decisions best aligned with their real estate strategy. When they can’t see the changes happening throughout the portfolio, resources get tied up in projects that have to be cancelled and conflicts continually arise, which delays other opportunities your organization could have pursued.
Avoid delays: manage your portfolio with Tango
Tango Real Estate for Retail is a robust, fully integrated suite of store lifecycle management software including site selection software, lease administration and accounting software, and real estate transaction management software. With Tango, you have everything you need to plan and coordinate portfolio changes at scale—in a way that directly addresses each of these unnecessary delays.
