It seems real estate will be Frontier Communications’ next target as it looks to slash $150 million in costs by the end of 2024, with the operator tapping Newmark to manage its portfolio of leased, owned and network properties.
Frontier plans to lean on Newmark’s expertise as well as its Newlitic tool to streamline its real estate operations. Announced earlier this month, Newlitic is an analytics dashboard for real estate data, which allows companies to view information about occupancy utilization, critical lease dates, facilities management and financials, occupancy costs and even weather events across their properties.
The operator currently has real estate assets scattered across its 25-state footprint. By unifying management of this portfolio, Frontier is looking to not only streamline operations but also identify cost-cutting opportunities.
“Simplifying our real-estate portfolio represents an important opportunity to reduce our cost structure and improve the sustainability of our footprint,” CFO Scott Beasley said in a statement.
According to its most recent 10-Q filing, Frontier had approximately $10.8 billion in net property, plant and equipment assets as of the end of Q3 2022. It’s hard to pin down exactly what proportion of its current assets are land and building-based rather than conduit and plant since its last annual report was filed in February 2022. However, that report indicated that $1.4 billion of the $9.7 billion it spent on property investments overall went toward land, buildings and leasehold improvements.
Frontier has already slashed $250 million from its cost structure and in November laid out plans to cut another $150 million to reach a total goal of $400 million in savings by the end of 2024.
Real estate deals have already factored into its cost cutting plans. In July 2022, Frontier sold its office building in New Haven, Connecticut for more than $70 million but inked a 20-year leaseback deal to maintain its presence there.
In addition to falling to the bottom line, Beasley has said Frontier plans to reinvest its cost savings into its business, including to help fund its ongoing fiber expansion.