It is often said that the role corporate real estate teams play within large companies is changing. But what is the nature of that change? And how are teams adapting?
In 2025, corporate real estate (CRE) is being redefined. No longer seen as a cost to bear, it is now increasingly viewed as a strategic pillar – one that must deliver efficiency today while enabling business growth, innovation, sustainability and resilience tomorrow. CRE leaders are under pressure, with rising costs, changing workspace demand, regulatory shifts and evolving expectations from employees and investors. It’s a demanding time to be working in the sector. But first, we need to define CRE.
What is corporate real estate?
Corporate real estate refers to the management of all the property and facilities that a company uses in its operations. This includes leased or owned offices, warehouses, labs, data centres, factories and retail locations, as well as the support infrastructure — utilities, transport access, interior fit-outs, safety systems, environmental controls and so on. Crucially, beyond managing physical assets, modern CRE work involves aligning those assets with business strategy.
As CBRE puts it in its 2025 Managing corporate real estate and facilities: Leading and emerging practices report: “CRE has become a department whose overarching mission is business enablement.” In other words, rather than just controlling costs, CRE teams are being asked to support the core business in delivering growth, innovation, attracting talent, managing risk and being resilient.
The current landscape: Trends and market realities
The environment CRE leaders operate in today is shaped by a confluence of pressures and shifts. Several recent reports give strong evidence of what those are. A recent CBRE survey, for instance, finds that CRE teams are embracing their expanded mission.
“Today, CRE teams are embracing their role of enabling business success, portfolio optimisation and climate initiatives, while maintaining a future-forward stance by proactively re-evaluating team structures and investing in data and intelligence strategies,” it says.
Knight Frank, in Changing tact: Ten corporate real estate trends that will define 2025, likewise observes that “2025 will be a defining year for corporate real estate.” They note that CRE professionals will be tested in agility, foresight and risk management as economic, workplace, regulatory and technological shifts accelerate.
Environmental performance
Hybrid working remains a persistent theme. CRE leaders are still trying to work out how much space is needed and how it must be configured in the post-pandemic world. Operating costs — energy, labour, maintenance, business rates — also continue to bite and CRE leaders are also under increasing scrutiny to meet environmental goals.
Indeed, buildings and facilities that do not meet modern environmental, energy or ESG standards risk becoming liabilities rather than assets. Knight Frank’s trend analyses make clear that “rising insured and uninsured losses will expose vulnerabilities in real estate portfolios, making resilience and proactive risk management essential”. Retrofits, improved carbon performance, energy efficiency and stronger governance are no longer optional.
In Knight Frank’s ESG Outlook article, the firm states: “In 2025, corporate real estate strategies prioritising ESG will lead the way, proving that sustainability is not just good ethics but smart business.” They warn that rising climate risk and tighter regulations make resilience and proactive risk management essential.
The role of AI
Meanwhile, in AI in Corporate Real Estate: Adoption Gains Momentum, Knight Frank reports that while 65% of respondents currently rate their AI usage as “low,” there is optimism that this will drop to one-third by end of 2025 — especially for applications in operational efficiency and lease management.
While many CRE leaders see promise in technology and data, moving from pilot projects to business level scale remains challenging. Many organisations are exploring AI, but few are yet mature. Clean data, infrastructure, talent and organisational willingness are common bottlenecks.
A recent MIT paper found that “despite $30–40 billion in enterprise investment into GenAI, this report uncovered a surprising result in that 95% of organisations are getting zero return”.
It adds: “The outcomes are so starkly divided across both buyers (enterprises, mid-market, SMBs) and builders (startups, vendors, consultancies) that we call it the GenAI Divide. Just 5% of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable P&L [profit and loss] impact.”
Strategic alignment and organisational capacity
It is also clear that CRE is increasingly embedded in broader business strategy, including HR, operations, finance and ESG, which increases complexity. CBRE’s surveys show that key initiatives now include functional partner collaboration and integrating end-to-end service delivery, reflecting that real estate cannot be managed in isolation. Yet many CRE and CRE-FM teams find their roles constrained by lack of internal alignment, limited stakeholder buy-in or insufficient access to business leaders.
So, corporate real estate in 2025 sits at a critical juncture. The conventional wisdom of simply minimising cost is now insufficient. Today’s CRE leaders must balance cost discipline with strategic foresight — managing portfolios for efficiency, resilience, sustainability, innovation and employee experience. As CBRE observes, CRE has become “a department whose overarching mission is business enablement”.
A narrative illustration
To bring these ideas together, consider this fictional but plausible scenario. A multinational technology company envisions doubling its R&D capacity over the next five years. Meanwhile, it must reduce operational costs in the next 12-18 months due to economic constraints.
Its CRE leader begins by commissioning a full portfolio-wide audit: lease terms, energy bills, utilisation of floor space, condition of facilities, ESG compliance, commute times, amenities and so on. Data shows that several leases are up for renewal soon, some buildings are poorly insulated, occupancy clumps around certain days, and older buildings have high maintenance costs.
The CRE leader then builds three scenarios: one conservative (stable demand, energy costs moderate), one downside (remote work becoming permanent for many roles, energy cost spikes), one growth (staff growth, more on-site work, tighter sustainability regulation). Using data, they map which assets would be costly to retain vs costly to dispose or retrofit, which leases to renegotiate or break, and which new or upgraded spaces are required.
They pilot a retrofit in one older building to improve insulation and energy efficiency, install LED lighting and fit sensors for occupancy and temperature. They measure energy consumption before and after. Simultaneously, they negotiate upcoming lease renewals for some locations, ensuring break clauses or expansion options are built in.
They also invest in a flagship, highly sustainable, high-quality office in a prime location to serve as a hub for innovation, collaboration, and culture — recognising that this has longer-term returns via employer brand and talent attraction.
At the same time, for less strategic buildings they impose stricter cost discipline: optimising cleaning contracts, trimming underused amenities, sub-leasing where feasible and postponing non-urgent capital expenditure. The CRE team works closely with HR to align on talent plans, finance to model cost and capital, ESG to anticipate regulation and operations to implement retrofits and maintenance.
Over time, this yields a corporate real estate portfolio that has lower cost per usable square foot, higher use, fewer liabilities in terms of energy waste or regulatory risk, improved employee satisfaction and flexibility, and resilience to shifts in workplace demand or environmental rules.
Strategies for balancing short-term needs and long-term priorities
Strategy one: Embed CRE’s purpose in business strategy
A foundational move is ensuring that the CRE mission is clearly aligned with the overall business strategy. As CBRE writes in The Future-Focused Corporate Real Estate Leader: “For many, real estate has been such a ubiquitous element of business operations that it’s been treated as a passive enabler… But in the last five years, that mindset changed.”
The change is real: CRE is no longer something to be managed only when problems arise; instead, CRE must be purposefully designed to support business goals such as innovation, workforce growth, sustainability, resilience and culture. When CRE is linked with HR, with hires and talent strategy, with finance and growth forecasts, with ESG and regulatory risk, then its investments are more likely to pay off in both the short and the long run.
Strategy two: Use data, analytics and AI to illuminate trade-offs
To make informed decisions, CRE leaders must build, collect and analyse data. This means occupancy analytics, energy usage, maintenance records, lease expiry schedules, environmental performance and user experience feedback.
As Knight Frank’s research on AI adoption notes, while many CRE organisations rate current AI usage as “low,” there is optimism for rapid growth in areas like operational efficiency and lease management. This reflects an increasing recognition that technology can help with cost avoidance and risk control as well as enable new capabilities.
Strategy three: Prioritise ESG and risk mitigation as long-term value drivers
Instead of treating sustainability as a cost centre, forward-looking CRE leaders view it as a source of risk mitigation and competitive value. Knight Frank’s sector-specific ESG outlook states that “sustainability is not just good ethics but smart business.” ESG-led decisions such as improving energy efficiency, installing green-lease clauses, reducing embodied carbon and improving resilience to climate risk are increasingly part of what tenants, regulators and capital markets expect.
Strategy four: Cost management without undermining core value
There are many levers: renegotiate leases, improve energy efficiency, reduce underused space, carefully manage service contracts. But the goal should be to preserve or enhance what makes properties attractive: location, quality, sustainability and employee experience.
For example, in CBRE’s Managing Corporate Real Estate & Facilities research, key transformational initiatives are not just focused on cost savings but also include workplace improvements, automation, carbon reduction initiatives and functional partner collaboration. Real gains come when cutting costs in places that do not erode value.
Strategy five: Build organisational capacity and governance
CRE teams need internal capability — data, analytics, sustainability expertise and change management — and governance frameworks that ensure property decisions are linked to broader priorities, reviewed regularly and flexible. CBRE’s report shows that CRE&F teams are partnering more with functional groups outside themselves, such as HR and IT, and elevating metrics beyond simple cost or square footage.
Sources
CBRE, Managing Corporate Real Estate: Leading and Emerging Practices
JLL, Global Occupier Trends to Watch in 2025
Savills, 2025 Global Occupier Outlook
Knight Frank, The Wealth Report 2025
Knight Frank, Changing Tact – Ten corporate real estate trends that will define 2025
Knight Frank, The ESG outlook: Sector-specific property trends for 2025
MIT, The GenAI Divide: State of AI in Business 2025
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