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Real Estate

Real Estate

Helping real estate organizations maximize the value of their investments and transform their businesses

Real estate companies have long pursued a consistent approach to value creation: high-quality properties, low cost of capital, and consolidation. However, changes in technology and how people use real estate have significantly disrupted the industry. Leaders today create Change that Matters by focusing on customer experience, harnessing the power of data and technology, and innovating their business models.

We pair extensive real estate and functional expertise with deep tenant knowledge across sectors to help organizations reimagine the role they play in space acquisition, development, and use. For example, a shopping mall landlord needs to know what is state of the art in retail-experience design, while an office developer with financial services tenants needs to understand the latest in banking artificial-intelligence technology, physical security, and talent attraction. We partner with organizations to maximize value, transform their businesses and build the new capabilities needed to win.

HOW WE HELP CLIENTS

Investment

Make better investment decisions by using advanced analytics and a detailed knowledge of tenants. Our unique understanding of shifts in tenant needs, familiarity with macro- and micromarket trends, and use of the full power of traditional and nontraditional data allow us to provide careful diligence on critical decisions (for example, acquisitions and dispositions).

Development & Construction

Maximize returns for large-scale developments by applying insights on changing community and tenant needs, optimizing capital costs, industrializing and accelerating project delivery, minimizing risk, and ensuring that stable foundations are in place for long-term, sustainable revenue streams.

Operations

Increase tenant and landlord performance by designing new business models, revolutionizing customer experience, building analytics capabilities to enable data-driven decisions, and supporting procurement optimization.

Performance Improvement

Transform real estate organizations through best-in-class approaches in strategy, organizational design, marketing, sales, risk management, capital-expenditure optimization, procurement, and customer experience. We help companies shift and diversify their business models, build new capabilities, and expand geographically.

 

>1,250

projects in the past 5 years

>450

clients globally

>250

real estate industry experts

Our approach

Digital and advanced-analytics transformation

Deploy advanced analytics and data science to inform strategic and operational decisions, leveraging traditional real estate data and nontraditional data (such as consumer spend, place-based experience reviews, and demographics).

Create workflow tools by using the data science for real estate practitioners (such as the acquisition process), ensure change management, and develop internal data-science capabilities.

Corporate real estate optimization

Maximize the value of corporate real estate with our proprietary diagnostic that evaluates whether real estate choices support corporate strategic objectives and operating models, enable talent attraction and retention, meet sustainability objectives, and can achieve continued delivery at the optimum cost.

Development visioning and economic master planning

Envision a new city, community, or property in a facilitated workshop that brings in cross-functional external experts to collaborate on the creation of innovative ideas and to identify specific actions to move projects forward.

Plan vibrant and financially sound developments by assessing the complex strategic, financial, and operational trade-offs for single projects and city-scale developments.

Major project value assurance

Conduct an objective review of a project before financing or contracting, identifying the major value drivers and risks and arming the development team with the tools and insights to deliver.

Help deliver large, complex real estate projects on time and on budget with leading-edge approaches, including experience-design optimization, collaborative contracting, procurement cleansheeting, standardization and modularization, and real-time productivity management in field activities.

Examples of our work

Partnering with an owner-operator company to build new, digital businesses

Established a de novo digital and innovation lab for a leading North American real estate owner and operator to build proprietary technology, novel business models, and new monetization streams, resulting in more than $50 million in impact of run-rate earnings before interest, taxes, depreciation, and amortization within three years.

Enhancing a developer’s growth strategy

Advised on urban planning, sale of land, infrastructure, and commercial and residential real estate to generate a 20-fold revenue increase in five years for a leading Chinese new-city developer.

Transforming an extensive healthcare-facilities program

Developed strategies for a large owner of healthcare facilities in the United States to create a financially sustainable real estate portfolio, deliver several multibillion-dollar development projects, and optimize facilities-maintenance and -leasing costs while improving service levels.

New at McKinsey blog

Blog Post

Reimagining the real estate industry for the next normal

– How one real-estate developer’s focus on digital reinvention before coronavirus is helping it navigate the current crisis and beyond.

FEATURED INSIGHTS

Article

Commercial real estate must do more than merely adapt to coronavirus

– COVID-19 is a humanitarian challenge that will have lasting effects on how people live, work, and play. By acting today, real... estate leaders can best serve end users and ensure their own viability.
Article

Getting ahead of the market: How big data is transforming real estate

– Many real estate firms have long made decisions based on a combination of intuition and traditional, retrospective data. Today,... a host of new variables make it possible to paint more vivid pictures of a location’s future risks and opportunities.
Article

A turning point for real estate investment management

– As institutional investors flock to real estate, investment managers must avoid getting stuck in the middle of the market—too... big to be nimble yet too small to reach scale.

Related Practices

Private Equity & Principal Investors

Helping investors make smarter decisions

Capital Projects & Infrastructure

Improving delivery of major projects and the use of capital assets

McKinsey Digital

We help our clients create change that matters—transformation, enabled by technology and sustained through capabilities

About us

Change that Matters

At McKinsey we’re driven to create Change that Matters. Learn what it means for you, and meet the people who create it.

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