This popular U.S. multi-branded retailer provides upscale, casual clothing and accessories for young adults in over 1,200 locations, both domestic and international.
Like many retail tenants, this company is currently focusing on accelerating expansion in high profile shopping areas worldwide by setting goals to close underperforming stores, open 30 new international stores and tighten control over expenses through operational efficiencies.
Problem
Prior to working with CoStar Real Estate Manager, the company experienced two failed real estate system implementations that left them without a centralized real estate information management system in place to streamline business processes. Without visibility to the collective real estate data, or any integration of multiple systems, the company felt unable to make cross-functional business decisions to support their strategic goals.
Deal processes and new store construction, along with forecasting and budgeting also needed to be managed. Because occupancy costs represent a significant portion of overall expenses for this retailer, it was critical that they gain control through efficient and effective management of operating expenses and percent rent obligations.
For underperforming stores, the company needed to manage available lease options to ensure a cost-effective negotiation to dissolve the lease. On top of all of this, this company knew they also needed to prepare for upcoming FASB lease accounting changes to ensure they will be ready when the standard is issued.
Solution
After a thorough evaluation of the market place, the retail chose CoStar Real Estate Manager for their ability to address the needs of accounting, real estate, construction and global procurement in a single solution. Partnering with the retailer’s internal IT and business teams, CoStar Real Estate Manager was able to deliver the CoStar Real Estate Manager retail edition in only four months.
The system was fully integrated with PeopleSoft/Oracle, enabling the automated changes of accounting information related to the real estate portfolio including accounts payable and history, vendor records, monthly sales and deductions by store, store profitability and other performance metrics, straight line rent and percentage rent accruals.
Real estate and construction data was migrated from the existing Lotus Notes database and from PeopleSoft/Oracle for real estate payment information. Additionally, CoStar Real Estate Manager provided on-site and web-based training through each phase of the project, electronic documentation of new processes, training materials and test cases.
Results
The successful four-month implementation of the CoStar Real Estate Manager retail edition enabled this customer to gain control of their real estate-related information. The company’s entire store portfolio can now be managed, measured and updated through a single system.
The integration of real estate and PeopleSoft/Oracle accounting information and processes with CoStar Real Estate Manager resulted in significant time savings, reduced occupancy costs, better visibility and control of real estate, and the ability to make an informed transition to the ASC 842 lease accounting standard.
With the CoStar Real Estate Manager serving as the “single source of truth” for real estate-related information, the company now has the ability to confidently make accurate and timely business decisions and reach their strategic goals.
