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Pricing 101 : Understanding the basics of pricing a corporate real estate outsourcing deal
Corporate Real Estate Journal,
8
(2),
180-192
(2018)
Abstract
Perhaps no other topic creates as much apprehension between a buyer and a supplier as trying to negotiate a fair price for corporate real estate (CRE) services. The current authors believe one of the key reasons is because buyers and suppliers do not understand the fundamental basics of pricing. Pricing a CRE deal becomes much easier when you completely understand the tools in your pricing toolkit. This paper addresses five common questions with which organisations often struggle for pricing a CRE deal. In answering the questions, the paper defines and explains the pricing tools practitioners can use to make getting to a fair price easier. The paper also provides recommendations where appropriate. Lastly, the paper challenges buyers and suppliers to negotiate prices with a lens of transparency.
Keywords: pricing; pricing models; best value; compensation; sourcing; sourcing business models; real estate; facilities management; CRE outsourcing; Vested outsourcing; TCO; performance-based; outcome-based
The full article is available to subscribers to the journal.
Author's Biography
Kate Vitasek is a faculty member for Graduate and Executive Education at the University of Tennessee’s Haslam College of Business Administration. Her award-winning research has been featured in six books including: ‘Vested Outsourcing: Five Rules That Will Transform Outsourcing’ and ‘Vested: How P&G, McDonald’s and Microsoft are Redefining Winning in Business Relationships’. Her most recent book, ‘Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement’, has been widely endorsed by some of the most progressive procurement leaders across the world.
Michele Flynn is visionary and expert in the fields of outsourcing, facilities management, real estate and governance. She serves as executive chairman for SIREAS, LLC, working directly with clients to provide vision, strategy and guidance. Michele was the founder of Expense Management Solutions, where her leadership and expertise were integral to the development of performance based contracting for global outsourcing relationships in corporate real estate and administrative services. Her 25+ year career has made her a subject matter expert and sought-after speaker on subjects ranging from third party risk management, corporate real estate, corporate procurement and risk and compliance.
