The Hidden Cost of Fragmented Design Delivery Across a Real Estate Portfolio

RSP’s Heather Dunn and Katie Petersen say the move toward engaging multiple design teams across a national real estate portfolio can work against an organization’s broader business goals, but the damage isn’t always obvious at first. 

 

A global, national, or even regional real estate portfolio is complex by nature. Within a given portfolio there may be different markets, different building types, different users and often very different demands from one project to the next. But there is another layer of complexity that organizations sometimes create for themselves: dividing design delivery among a growing number of firms.

The logic, coming from an executive and/or procurement lens, is that competition is healthy and a straightforward way to negotiate fees and move projects faster.  The perception is that more firms means more “boots on the ground” support in close proximity to the client’s multiple locations, more control over costs, and more capacity when workloads spike.

The reality is that managing multiple design partners is work in itself. Often the stakeholders driving the strategy to diversify and award contracts to multiple firms are not those that have to manage and work within the resulting complexity. The Real Estate team, the Owner’s Rep, the client’s internal and external vendor partners, and facilities managers are the ones navigating inconsistencies in teams, processes, and deliverables.  Ultimately, that makes their jobs harder and less efficient.

Diversifying requires a higher level of involvedness from the client. Every firm needs to learn the organization, especially in the early stages of mobilization. They need to understand the brand, the standards, the approval structure, the budget pressures and the unwritten priorities that rarely fit neatly into a project brief. They need to know who makes which decisions, what has been tried before and why certain standards exist in the first place. When that knowledge is spread across several firms, the client often becomes the connecting hub.

A further challenge is that many national design firms operate as multiple individual profit centers. Rather than collaborating and sharing work across their offices, they are in competition for revenue. The result is that a client receives the “C team” from an office where the client is not a priority, high-revenue producer. Equally harmful, there can be a lack of training from office to office on client standards and expectations.

Efficiency is Bigger than Design Fees

The cost of fragmented design delivery is difficult to see because much of it never appears in an architect’s proposal or a project manager’s spreadsheet.

It shows up in repeated onboarding. It shows up in additional coordination meetings, duplicated conversations and internal client teams answering the same questions for different consultants. It appears when one firm solves a problem another team has already addressed somewhere else in the portfolio.

None of those tasks is particularly dramatic on its own. Across dozens or hundreds of projects, however, they quickly add up.

That makes the efficiency question more complicated than comparing fees or turnaround times project by project. For national real estate teams, or even regional ones that rely on multiple providers, the better measure may be how much effort the organization spends simply keeping its design partners aligned.

What Happens When Knowledge Can Travel?

The most valuable lessons in a national program do not always stay within the boundaries of a project type.

In a single-source design delivery model, the firm considers the design standards or design guidelines holistically as a kit of parts to be leveraged across the entire portfolio. Furniture, finishes, lighting and other elements may have multiple applications across project types like workplace, customer-facing environments, retail, and clinic offering an economy of scale and cost savings to the client. An approach to artwork, technology or accessibility within one asset category could solve a problem for another asset category. A recurring deviation from a standard may reveal that the standard itself needs to change.

Those connections are much easier to see when the people working on the portfolio have visibility beyond a single project, region or asset category.

Over time, repetition creates a useful body of knowledge: what consistently works, what causes problems, where costs tend to creep and which decisions repeatedly require exceptions. The value is not simply remembering what happened on the last project. It is recognizing patterns across many of them.

And that is where institutional knowledge begins to function as data. And data can be a strategic advantage.

Consistency and Innovation Are Not Opposites

To manage a large real estate portfolio standardization at some level is customary. The most effective programs are the ones that know what is worth standardizing and where local adaptation or customization truly adds value.

Repeatable processes, tools and decisions can remove unnecessary work from routine projects. That creates more time for the projects that genuinely require new thinking.

We are seeing that dynamic play out as organizations begin exploring spaces such as immersive AI labs. These environments can bring together advanced screen technology, secure infrastructure and new ways for employees or clients to collaborate and interact with digital information. There may be no established prototype to follow.

In those situations, familiarity with the larger organization becomes especially valuable. The design team does not need to relearn the client’s technology expectations, workplace strategy, decision-making process or broader brand before tackling the new challenge. Existing knowledge becomes the starting point for experimentation.

In other words, a strong process doesn’t limit innovation, it makes room for it.

The Question Is Who Holds the Whole Picture

Large real estate portfolios will always require specialized expertise. They will always fluctuate in volume. And there will always be projects that demand a different skill set or a fresh perspective. The larger question is how those resources are connected.

When design delivery is divided among many independent teams, someone still has to maintain the history, identify the patterns and carry lessons from one part of the portfolio to another. If no partner has that visibility, the responsibility usually lands with the client’s own real estate team.

For organizations reconsidering how they structure national design delivery, that is a cost worth examining.

The question is not simply whether multiple firms can complete the work for less or more quickly. It is how much value, knowledge and opportunity are lost when no one design team can see the whole picture.