H & R Block

Client: H & R Block

Locations: United States

Real Estate Type: Retail and Office

Services Provided:

Facilities Management, Lease Administration, Project Management, Transaction Management

Square Footage: 12 million square feet

Project Overview

H&R Block is the world’s preeminent tax services provider serving more than 400 million clients since 1955. H&R Block today operates 11,000 retail tax offices in the United States plus another 1,700 abroad. In 2000, H&R Block engaged DTZ to manage its real estate portfolio in preparation for future growth.

The Challenge

  • Prior to the H&R Block – DTZ partnership, H&R Block’s real estate operations were highly decentralized.
  • District managers or local office managers were typically responsible for all real estate and facilities functions, which distracted them from their core business.
  • Additionally, the company saw the opportunity for extensive growth in corporate stores, but did not have in-house resources to support expansion objectives.
  • Analysis from accounting revealed substantial collections issues. Site visits and lease reviews by DTZ’s property management team found a myriad of tenant disputes pending.

The Solution

  • DTZ inventoried H&R Block’s portfolio, abstracting leases and entering data into REFLEX, a proprietary technology used to track and manage lease administration, transaction management, project management and facilities management.
  • DTZ was assigned the responsibility of negotiating lease renewals, implementing brand standards to provide a consistent image in all H&R Block locations and managing repairs and maintenance.When H&R Block entered a significant growth period in 2004, DTZ assisted in the opening of an unprecedented 621 locations within a seven-month period.
  • To support such growth, DTZ developed a turn-key project management process to streamline site selection, lease negotiations, space planning, construction coordination and furniture, fixtures and equipment installation.
  • As part of a 2009 initiative to reduce operating expenses, H&R Block looked to DTZ to re-align lease agreements with current market values.
  • DTZ also supports H&R Block’s Corporate Headquarters buildings by providing engineering services.

Results Achieved

  • H&R Block achieved a three-year, $35 million expense reduction through lease renegotiation and renewal.
  • DTZ negotiated free rent totaling $12 million+ on H&R Block’s behalf since FY 2006.
  • DTZ renews 1,500-2,000 H&R Block leases annually with commitments of approximately $230M, transmits rent for 6,400 locations and reviews 32,000 invoices and documents.
  • As part of H&R Block’s Upgrade Program, DTZ completed over 4,000 upgrades from 2011 to 2014 at a cost of $170M.
  • Project and Development Services remodeled an average project size of 1,851 SF at an average cost of $50,821.
  • DTZ oversaw the replacement and retrofit of over 4,500 signs from neon to LED in 2013 and 2014 as part of a three-year program to update 5,000+ signs.
  • Overall, 4,000+ locations opened or relocated; 4,000+ offices upgraded to Brand; nearly 20,000 lease renewals were completed; and 85,000+ facility work orders were completed.