Question

1-Choose any environment and identify the real estate and layout strategy utilized in the organization. Please explain your choice in detail

2-How does the current Pandemic impact or likely impacts the environment you chose

Answer 1

Successfully managing and running a real estate property — whether it’s commercial or multifamily — is about more than just the day-to-day. Planning for the future is the only way you can protect yourself from wasted time, money and energy in the long term.

In order to understand facility planning and design, it’s important to understand the difference between facilities management and facilities planning. While both take into account the day-to-day functions of your real estate space, strategic facility planning also looks to the future. These long-terms plans prepare for and protect your space from any unexpected situations that may occur.

These unexpected situations can stem from anything, including external factors and internal factors affecting your commercial or multifamily space. That’s why it’s highly recommended that you work with an experienced professional for this step, as they will be able to address all of the potential issues and complexities that can arise over time.

Facilities planning in management of real estate often includes aspects such as:

• Disaster preparedness and recovery
• Long-term growth strategy
• Long-term approaches to day-to-day facilities management, including:
  • Critical systems management
  • Janitorial and housekeeping duties
  • Maintenance and repair duties
  • Hiring service vendors, like food trucks or fitness trainers
  • Proactive/predictive maintenance
  • Catering and hospitality services
  • Business support services
  • Environment, health and safety issues
  • Security services

In the current age, a plant's site is chosen based on several factors. These include:

1. Raw material supply: The source and price of raw materials is one of the most important factors that determine the location of a plant. Facilities that produce chemicals in bulk are usually located close to the source of raw material if the costs of shipping the product is less than the costs of shipping the feed. For example, ethylene production is growing in the Middle East since cheap ethane from natural gas is readily available. Oil refineries tend to be located near areas with high population and crude oil supplies since it is expensive to transport the oil.

2. Location with respect to market: If the plant produces high-volume and low-cost products, such as cement and fertilizer, it may be better to situate the plant closer to the primary market since transportation cost is a large fraction of the sales price. If the product is low-volume and high-cost, like pharmaceuticals, then the benefits of being closer to the primary market may not be there.

3. Transport facilities: Facilities should be close to at least two major forms of transportation, whether that be road, rail, waterway, and/or seaport. For example, paper manufacturing plants in the US use various types of pulp that are delivered by truck or by train from various places in North and South America, so paper facilities need to be close to rail and major roads. Transportation by road is common for local distribution from central warehouses, while transportation by rail is more widespread for long distance transport of bulk chemicals. Pipeline is used to ship industrial gases and bulk fuels. Air freight can be efficient for shipment of personnel and essential units and supplies and for small volume products that have high value, such as pharmaceuticals. Of course, products that are delivered by air must meet aviation regulations.

4. Availability of labor: Skilled workers are usually brought to the plant from outside the area. There should be a local pool of unskilled labor that can be trained to operate the plant, and of skilled craft workers to maintain the process units. Local labor laws, trade union customs, restrictive practices for recruitment and training should also be taken into consideration. A 10% increase in unionization of a state's labor force is projected to reduce the number of expanding facilities by 30 to 45%.

5. Availability of utilities: Processes that require a substantial amount of cooling water is usually located near water sources, such as rivers or wells. Cooling water may be directly taken from the water source, or may be stored in cooling towers. Those that need large quantities of power, such as electrochemical ones, are typically close to cheap power sources.

6. Availability of suitable land: The ideal land is flat, well-drained, with suitable load-bearing characteristics. Further considerations have to be made if the land is reclaimed land near the ocean in earthquake zones. Property tax is also a factor when choosing a site since property taxes vary area to area. Under a third of plants that relocate move to regions with lower property taxes, which is the proportion that would be expected if companies move to a new location regardless of property tax. High property taxes is not as significant as other factors such as labor supply and land costs.

7. Environmental impact: Depending on the location, it may be more difficult and costly to dispose of wastes. During the project design phase, experts are typically consulted to learn more about an area's local regulations. More details about environmental regulations are found below.

8. Local community considerations: State and local planners are typically motivated by the desire to create jobs and improve the tax base. Introduction of facilities to an area is usually viewed as the most direct way to stimulate the area's economy. However, recent studies have found that communities with high-growth are already characterized by the fast growth of businesses that are already there. It is rare for a plant to completely close in one area and relocate to another, and if plants do relocate, the majority is over short distances and often within the same community. Therefore, local policymakers favor the expansion of existing plants. The opening of a new plant at a location should impost no additional risk to the local residents. For example, they should be downwind of the residential areas. Local communities also need to be able to accommodate the plant personnelles. For example, traffic, housing, and facilities must be able to accommodate the influx of workers. Additional factors are property taxes and water consumption.

9. Climate: The climate of the area may affect processes and costs. For example, plants in cold areas need more insulation and special heating. Facilities in earthquake areas need to be seismically sound. Plants in areas with high ambient humidity will usually use air cooling instead of water cooling. More detailed information about the effects of weather can be found in the Site condition and design page.

10. Political and strategic considerations: Government sometimes gives capital grants, tax concessions, and other incentives to encourage plants to be built in specific areas. Physical assistance such as roads, water, and other public infrastructure are more popular than financial assistance. Companies can also globalize and take advantage of areas with preferential tariff agreements. The tax policy of an area is inversely related to growth. High personal income sometimes hinder employment growth. Personal income does not affect the cash flow of the company, but it reduces the after-tax income of its managers, and thus high personal income tax can be classified as a personal region.

Current Pandemic impact or likely impacts the environment For Real Estate

Not all real estate assets are performing the same way during the crisis. The market seems to have pivoted mostly on the inherent degree of physical proximity among an asset class’s users—even more so than on its lease length. Assets that have greater human density seem to have been the hardest hit: healthcare facilities, regional malls, lodging, and student housing have sold off considerably. By contrast, self-storage facilities, industrial facilities, and data centers have faced less-significant declines.

The COVID-19 experience could also permanently change habits that may affect demand for other real estate assets, such as hospitality properties and short-term leases. Even a short moratorium on business travel could have lasting impact when alternatives such as video conferences prove sufficient or even preferrable. Near-shoring of supply chains may further reduce demand for cross-border business travel, and consumers who are afraid of traveling overseas may shift leisure travel to local destinations.

The depth and breadth of economic impact on the real estate sector is uncertain, just as the scale of human catastrophe from the pandemic is yet to be seen. However, behavioral changes that will lead to significant space becoming obsolete in a post-coronavirus environment seem imminent. Given the potential for transformative changes, real estate players will be well served to take immediate action to improve their businesses but also keep one eye on a future that could be meaningfully different.