How companies can make real estate decisions at the speed of business

Geopolitical shifts, supply chain disruptions, technological breakthroughs: CEOs are facing mounting pressure to pivot strategies at speed. It's become a particularly challenging issue for commercial real estate, which is foundational to delivering on these strategies, where major decisions traditionally unfold over quarters, not days.

Commercial real estate empowers organizations to fulfil their missions and meet customer demands. It brings employees together to collaborate and do their best work. It provides a channel for shared creation, direct communication and career advancement. However, in a world of rapid change, decision-making on commercial real estate commitments requires a greater level of sophistication to ensure it can support an organization’s strategic objectives.

The stakes are high, especially when you consider the space availability dilemma. The macro numbers tell the story of a real estate market moving in a positive direction, with plenty of available office space.

The global office vacancy rate decreased in Q3 2025 for the first time since 2019, falling 11 basis points to 17%, according to JLL’s Global Real Estate Perspective, November 2025. But these broad market statistics mask a more acute problem: the dwindling availability of high-quality, centrally located space that companies actually want.

Office construction is at an all-time low in the US, with three-quarters of the remaining pipeline already committed, while new development starts are at their lowest levels since 2010 in Europe. In Paris, vacancy for new office space sits at just 3.1%, dropping to 0.8% in the central business district. London shows 1.4% vacancy for new office space. Grade A vacancy in central Tokyo has fallen to 0.9%. In Manhattan, direct vacancy for Trophy and Grade A office space built since 2010 is only 5.3%.

Whether you're investing in a property or signing a lease, the challenges are the same. Finding the right location, negotiating terms and reconfiguring a space to meet your needs can be a lengthy process that may not match the accelerating pace of decision-making required by leadership teams to meet their objectives.

The challenge isn't just market supply – it's also the process for making real estate decisions within organizations. Too often, real estate teams are brought in after strategic business decisions have been made, when they should be part of the initial planning process.

This disconnect is structural. In many organizations, real estate typically reports to the CFO, COO, or increasingly the CHRO. But real estate teams often lack integration with C-suite strategic discussions.

There's also a fundamental financial issue. The significant upfront investments required when companies customize spaces mean landlords and tenants both need long-term commitments to justify the ROI. These capital commitments are now competing with an increasing demand for technology investments as AI initiatives race forward.

As a former CFO, I'm acutely aware of the implications for income statements and balance sheets. Real estate is often the second-largest expense after payroll, yet it's often treated as an execution function rather than a strategic one. When teams operate in silos and real estate capital budgets are diminished, organizations lose the flexibility to respond effectively to market opportunities and risks.

The solution isn't just getting real estate a seat at the table. It's fundamentally changing when and how these decisions get made.

Smart companies are getting ahead of these challenges by investing in comprehensive analytics before space needs become urgent. This includes workplace utilization studies that predict future space needs, predictive market analysis that identifies emerging locations before competition drives up costs, and portfolio optimization modelling that structures lease terms for maximum flexibility.

The goal is designing your real estate strategy to support business agility rather than constraining it. When real estate considerations are integrated into strategic business planning from the start, companies can structure their commitments to offer more options – even in a market where high-quality space is increasingly scarce.

Like other traditional ways of doing business, the inherent challenges of commercial real estate can and are being overcome. Here are three strategic steps companies can take to gain an advantage:

Our message to CEOs is clear: real estate decisions that are made today can have long-term impacts on company growth and profitability in the future. The companies that will thrive are those that treat real estate decisions with the same rigour and strategic foresight they apply to other major capital investments.

In today's environment of prime space scarcity and rapid business change, real estate can either anchor your company to outdated strategies or accelerate your competitive advantage.