|A group of facilities
managed by a single individual, organization, owner group.
A portfolio can be
located on a single site
or on multiple sites in varied geographical
A portfolio is also made up a of composition of numerous items, such as:
- Freehold-to-Leasehold Ratio
- Across one or more Climate Zones.
- Across one or more Seismic Zones (hazard areas).
- Across one or more time zones.
- Across one or more occupancy categories.
- Across one or more jurisdictions (political-legal).
- Building Age Cohorts
- Single management or multi-management teams
- Mission Criticality Rankings
- Fuel type availability in different regions (gas, steam, propane, etc)
Listed below are questions to elicit data on a portfolio of buildings:
What is the current ratio of freeholds to leaseholds in the portfolio?
Is there a sense of the optimum ratio (say, 35:65)?
- 2. Are there any significant freehold acquisitions and/or leasehold extensions contemplated within the next fiscal cycle?
Which department/party is the gatekeeper and custodian of the master
lease schedule with the mix and status of leases, such as ground
leases, gross and net leases, capital and operating leases, single and
multi-tenant leases, etcetera?
- 4. Is the
Company named in any significant disputes, pertaining directly to
facilities and property, that are being adjudicated by 3rd parties,
such as the courts, mediation, arbitration, etc?
Is counsel consistent for the entire portfolio or engaged ad hoc on the
basis of geographical and jurisdictional needs? Similarly, are there
standing order agreements and rosters with the other domains, such as
the commissioning of engineering reports.
- 6. How many of the leaseholds are deemed bondable leases (absolute triple net)?
- 7. Are there any ground leases where a facility has been constructed or the site remains undeveloped?
Is there a matrix (or other tool) to map the nuance of lessee
obligations in the range of “modified net leases” negotiated in
different jurisdictions, at different times, with language vetted by
- 9. Is there
reasonable clarity on the timetable of significant capital renewal
projects (roofs, HVAC, etc) relative to lease expirations – that is
- 10. Is
there awareness of any neighbouring development plans (or emerging
regulatory changes) that could restrict the use of any of the sites in
the future or they could be devalued as a result of the activities of
- 11. Does the board/executive
receive regular reports on key performance indicators for the freehold
property (such as FCI, EFCI and FNI)?
- 12. Is there corporate awareness and interest in pursuing ISO 55000?
Is there a software platform to track and manage the facilities and
property portfolio - CMMS, FMS, etc? How is legacy data archived? Has
historical data been migrated into the platform for aggregation
analysis, trend analysis, etc?
- 14. Has
there been any permissive wasting in the leasehold portfolio that
resulted in a cause of action. Is there awareness of, and any attempts
to quantify, any permissive wasting in the leaseholds.
Is there awareness of the quantum of deferred maintenance (if any) in
the freeholds? Has FCI or other such key performance indicators been
used to quantify and benchmark the backlogs.
What is the capital planning horizon (that is, the window for capital
forecasting)? Is this consistent across the portfolio or differs by
jurisdiction and by the scope and complexity of the individual
facilities and properties.
- 17. What are
the measures for differentiating Capex from Opex – capital cost
threshold, function threshold, interval threshold, hybrid?
- 18. What are the procurement thresholds for sole sourcing and competitive tendering of work on the facilities?
With reference to the long-range stewardship of the freehold and
leaseholds, is there clarity and consistency on the “strategic” horizon
and “tactical” horizon. For example, strategic is set at 30
years, tactical at 10 years, sub-tactical at three years and
operational at one fiscal year?
- 20. Is there a conscious pursuit of run to failure (RTF) on any assets with the intent to redevelop rather than reinvest?
Is there a "measurement register" of all the spaces and corresponding
occupancies within the spaces – interior/exterior, public/private
access; commercial/industrial, front-of-house, back-of house, etc?
- 22. Where do facility operations rank in business costs after wages?
Has property historically had difficulty making it onto the boardroom
agenda. Has there always been a strategic awareness around
- 24. Are there concerns about inefficiency in use of property with latent property value to be unlocked?
Is there an asset register including, for example, a list of all the
roofs on all properties, their type, their chronological age, their
useful service life, their measured areas.
Do the facilities have a replacement reserve fund for capital projects
such as roof renewal – either as individual reserves or commingled into
a portfolio, or sub-portfolio, reserve?
- 27. Is funding allocated to facilities on a consistent measure such as balanced scorecard, planning balance sheet, etc?
Fig. A geographically distributed
portfolio under a single management team within one climate zone,
one seismic zone and one political-legal jurisdiction.
I. Care is strategizing in order to efficiently and effectively
allocate the limited resources across a portfolio of buildings.