City-Wide Real Estate Transformation Presentation on Portfolio & Asset Management Toronto Realty Agency Board Meeting October 20, 2017 Re: RA5.3
What is Portfolio Strategy & Asset Management Portfolio Strategy A City-wide plan for all real estate needs and asset holdings: establishing a roadmap by which the City can use its real estate portfolio to achieve program and City building objectives, while ensuring that resources are aligned, integrated and optimized ORGANIZATIONAL STRATEGY PORTFOLIO PLANNING ASSET MANGEMENT Asset Management Strategy TRANSACTIONS DEVELOPMENT MAJOR PROJECTS FACILITIES MANAGEMENT PROPERTY MANAGEMENT Maximizing the utility of individual properties: maximizing use, generating value, reducing costs and mitigating risk through data analysis, forecasting and property insights 2
Real Estate Strategy Process & Inputs APPROACH TO STRATEGIC PLANNING KEY THEMES Alignment: Align real estate strategy to program goals and broader City objectives Engagement: Ongoing, strategic planning with Program leaders and local Councillors Partnerships: Internal (e.g., City Planning, Economic Development) and External (e.g., development community, City building organizations) Data Focused: strong fact base for decision-making and City-wide planning INPUTS FOR STRATEGIC PLANNING KEY INFORMATION Program and organizational priorities (short & long-term) Capital plans and forecasts Strategic plans (e.g., social development strategy) Community and Councillor input City-wide asset and portfolio data (e.g., location, use, cost) Market context and information City Planning context and information 3
Real Estate Strategy Outputs Long-Term Goals of a City-Wide Integrated Real Estate Strategy (more than revenues + cost savings) Clear understanding of the Portfolio by asset class & program area (e.g., office space, heritage, community infrastructure) Coordinated Capital Plans (e.g., co-location opportunities, capital pooling) Land use intensification opportunities (e.g., highest & best use) Modernization opportunities (e.g., office uses) Placemaking opportunities (e.g., pop-up markets, community driven initiatives) Strategic acquisitions, assemblies & investment plans Partnerships & joint venture opportunities (public, private and non-profit sectors) Revenue generation plans (e.g., leasing, retail, development pipeline) Policy & innovation (e.g., emerging practices and standards, creative funding solutions) Ward and District Plans 4
City Wide Real Estate Strategy Expectations for City-Wide Real Estate Strategy Report (to City Council in Q1 2019) 1. View of City-Wide real estate portfolio (by program, location and asset type) Report on portfolio mix, current state and occupancy 2. Establish vision and short + long-term goals (by asset type and program area) Recommend priorities and targets based on stakeholder input (e.g., affordable housing, community infrastructure, etc.) Establish implementation plans for key portfolios (e.g., City-wide office plan, emergency services, parking facilities, etc.) Identify City-wide development pipeline and major projects 3. Capital Planning & Funding Framework Consolidated view of real estate capital (City-wide) and recommendations for co-location and consolidation 4. Partnership framework Working with private, public and non-profit sector 5. Value Creation Metrics (driving value for the City) How to measure the City s overall real estate performance 5
Measuring Success (Example) 1. CREATING COMPLETE COMMUNITIES (a system-wide approach) Economic Employment lands developed (acres) Commercial space added (sf) Employment generated (person years) Infrastructure Improvements (# of projects) Incubator/social enterprise space created (sf) Civic/Placemaking Improvements (sf) Social Community Infrastructure space added (sf) Affordable housing units added (sf) Senior housing units added (units) Park space improved/created (acres) Residential units added (units) Shelters added (units) Environmental Brownfield remediation (acres) Heritage preservation (sf) Adaptive reuse (sf) Energy savings ($) 2. FISCAL SUSTAINABILITY Financial Real estate utilization & efficiency (e.g. cost per sf) Revenue generated ($ gross/net) Savings realized ($) Development charges & Fees ($) Property Taxes Created ($) Return on Investments/Dividends ($) 3. ENGAGEMENT & COLLABORATIVE PROBLEM SOLVING Engagement # of Community Meetings # of City Councillor Meetings # of City Staff Meeting # of Ward/District Plans Developed Transit Orientation # of units created with direct transit access # of sites/acres developed around transit hubs # of properties acquired for transit expansion 6
Next Steps 1. Organizational Build-Out October-November 2017 1. Finalize Organizational Structure 2. Establish Talent Model + Begin Recruitment 2. Operational Build-Out November-December 2017 1. Engage key stakeholders (Councillors, Division Heads) 2. Identify City and Program priorities 3. Detailed framework + work plans 3. Strategic Planning January 2018+ 1. Develop MOU including Real Estate Strategy as key deliverable to City Council (Q1 2018) 2. Assemble City-wide real estate data 3. Assemble City-wide real estate capital plans 4. Prioritization and analysis 5. Engage City staff on draft strategy to support 2019 Budget (Q3 2018) 7