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FacilitiesManagement in China(Page 12)
UBS’s Real Estate Strategy 2015
(Page 20)
Workplace Designfor Well-Being
(Page 36)
Susan Wagner ofMicrosoft EMEA
(Page 40)
CheCk Out
the leader’s
New lOOk
INsIde!
Register at www.corenetglobal.org/springforward
Wednesday, April 17, 2013
7:30 – 8:30 AM Networking Breakfast
8:30 – 10:15 AM CRE/Financial Services CRE/Bio-Med/Pharma/Life Sciences
10:15 – 10:30 AM Networking Break
10:30 AM – Noon CRE/Financial Services CRE/Bio-Med/Pharma/Life Sciences
Noon Adjournment
Wednesday, April 17, 2013
Noon – 1:00 PM Welcome & Networking Lunch
1:00 – 3:00 PMThe Radical Edge:
The Extreme Leader’s Guide to Uncommon AchievementSteve Farber
3:00 – 3:30 PM Networking Break
3:30 – 5:00 PMExtreme Leadership Jam Session:
Confront CRE’s Top 10 Challenges (Live & Unscripted)Steve Farber
5:00 – 6:00 PMNetworking Reception
(Executive Leader’s Council attendees join Leader’s Edge audience)
Thursday, April 18, 2013
8:00 – 8:30 AM Networking Breakfast
8:30 – 10:15 AMEnterprise Thinking: CRE in the Grand Scheme of Things
David Goldsmith10:15 – 10:30 AM Networking Break
10:30 AM – NoonPartnering for Success
CRE + HR CRE + IT
Noon – 1:00 PM Peer2Peer Lunch
1:00 – 2:30 PMPaid to Think: How & Why to Put Mind Over Matters
David Goldsmith2:30 – 2:45 PM Break
2:45 – 4:15 PM Emerging CRE Leader ThinkTank Senior CRE LeaderThinkTank
4:15 – 4:45 PMCRE Leader IdeaBank
(Emerging/Senior Leaders & ELC regroup for ThinkTank recap)4:45 – 5:00 PM Send-Off Charge & Adjournment
Thursday, April 18, 2013
6:30 – 8:30 PM Women of CRE Networking Dinner (Not included in registration fee. Price TBD)
Friday, April 19, 2013
8:00 – 8:30 AM Networking Breakfast
8:30 – 10:00 AMThe Journey of Not Knowing: (Wo)Maneuvering CRE Through Uncertainty
Julie Benezet10:00 – 10:15 AM Break
10:15 AM – Noon Leading Ladies: Successors as Mentors
Noon – 1:00 PM Networking Power Lunch
1:00 – 2:30 PM Best Practices Show-and-Tell-Athon
2:30 – 3:00 PM Short walk to Avon HQ for site tour
3:00 – 5:00 PM Call on Avon: HQ Site Tour of the company for women
New York City17-19 April 2013
730 Third AvenueMidtown East, New York, NY
Leap Ahead as a LEADER! CoreNet Global is proud to present 3 all-new learning experiences guaranteed to
supercharge your corporate real estate success.
Customize your curriculum to propel your professional growth and promote your career.Agenda is tentative and subject to change.
Sharpen Your Edgewww.corenetglobal.org
Whether you tread lightly or tend to take more confident strides up the CRE ladder, former executive Julie Benezet will surely get you out of your comfort zone. As President, Corporate Resources and Director of Global Real Estate for Amazon from start up through ramp up to
profitability, Julie is credited with the strategic planning and delivery of over 7,000,000 square feet worldwide.Julie, who is also a lawyer, mediator and entrepreneur, founded Business Growth Consulting in 1997 to help small- and mid-sized companies and corporate divisions develop a leadership mindset to drive growth and inspire innovation. Other highlights: The kick-off of the new Women of CoreNet Global Successors mentoring program, a Networking Power Lunch, a Best Practices Show-and-Tell-Athon and we will ring the doorbell at Avon headquarters for a site tour showcasing the company’s commitment to sustainability, CSR and women.
Looking for a venue to share ideas, solutions and best practices with others in your field? Meeting of the Minds is your answer. Designed for CRE professionals and key enterprise
partners to find common ground in an industry-focused roundtable setting, the 2013 workshop will target two industries with a strong concentration in the Northeast and within the CoreNet Global membership ranks: Financial Services
and BioPharma/Life Sciences.
David Goldsmith is a leadership instructor, management expert and forecaster. His other roles include consultant, advisor, New York university professor, speaker, telecast host and author. David has published more than 500 articles on topics such as strategy, technology, marketing, innovation and forecasting.
Steve Farber is president of Extreme Leadership, Inc., an organization devoted to leadership development in business, non-profit and educational communities. In 1989, after having run his own financial services company, Steve devoted his professional life to the field of leadership development and has been at it ever since.
Ready to push your performance envelope? Test your talents and sharpen your skills with renowned leadership gurus
Steve Farber and David Goldsmith. Unscripted, grow-as-you-go jam sessions are a fun, creative outlet designed to help you develop as an effective and knowledgeable CRE leader.
Participate in dive-in-drills and real-world trials – all while discovering what it takes to connect to business drivers and enterprise partners. Tap the collective brainpower and
expertise in the room in a dynamic ThinkTank session and reap the rewards in the IdeaBank finale.
#CNGForward
Leader’s Edge Presented by:
Register at www.corenetglobal.org/springforward
Wednesday, April 17, 2013
7:30 – 8:30 AM Networking Breakfast
8:30 – 10:15 AM CRE/Financial Services CRE/Bio-Med/Pharma/Life Sciences
10:15 – 10:30 AM Networking Break
10:30 AM – Noon CRE/Financial Services CRE/Bio-Med/Pharma/Life Sciences
Noon Adjournment
Wednesday, April 17, 2013
Noon – 1:00 PM Welcome & Networking Lunch
1:00 – 3:00 PMThe Radical Edge:
The Extreme Leader’s Guide to Uncommon AchievementSteve Farber
3:00 – 3:30 PM Networking Break
3:30 – 5:00 PMExtreme Leadership Jam Session:
Confront CRE’s Top 10 Challenges (Live & Unscripted)Steve Farber
5:00 – 6:00 PMNetworking Reception
(Executive Leader’s Council attendees join Leader’s Edge audience)
Thursday, April 18, 2013
8:00 – 8:30 AM Networking Breakfast
8:30 – 10:15 AMEnterprise Thinking: CRE in the Grand Scheme of Things
David Goldsmith10:15 – 10:30 AM Networking Break
10:30 AM – NoonPartnering for Success
CRE + HR CRE + IT
Noon – 1:00 PM Peer2Peer Lunch
1:00 – 2:30 PMPaid to Think: How & Why to Put Mind Over Matters
David Goldsmith2:30 – 2:45 PM Break
2:45 – 4:15 PM Emerging CRE Leader ThinkTank Senior CRE LeaderThinkTank
4:15 – 4:45 PMCRE Leader IdeaBank
(Emerging/Senior Leaders & ELC regroup for ThinkTank recap)4:45 – 5:00 PM Send-Off Charge & Adjournment
Thursday, April 18, 2013
6:30 – 8:30 PM Women of CRE Networking Dinner (Not included in registration fee. Price TBD)
Friday, April 19, 2013
8:00 – 8:30 AM Networking Breakfast
8:30 – 10:00 AMThe Journey of Not Knowing: (Wo)Maneuvering CRE Through Uncertainty
Julie Benezet10:00 – 10:15 AM Break
10:15 AM – Noon Leading Ladies: Successors as Mentors
Noon – 1:00 PM Networking Power Lunch
1:00 – 2:30 PM Best Practices Show-and-Tell-Athon
2:30 – 3:00 PM Short walk to Avon HQ for site tour
3:00 – 5:00 PM Call on Avon: HQ Site Tour of the company for women
New York City17-19 April 2013
730 Third AvenueMidtown East, New York, NY
Leap Ahead as a LEADER! CoreNet Global is proud to present 3 all-new learning experiences guaranteed to
supercharge your corporate real estate success.
Customize your curriculum to propel your professional growth and promote your career.Agenda is tentative and subject to change.
Sharpen Your Edgewww.corenetglobal.org
Whether you tread lightly or tend to take more confident strides up the CRE ladder, former executive Julie Benezet will surely get you out of your comfort zone. As President, Corporate Resources and Director of Global Real Estate for Amazon from start up through ramp up to
profitability, Julie is credited with the strategic planning and delivery of over 7,000,000 square feet worldwide.Julie, who is also a lawyer, mediator and entrepreneur, founded Business Growth Consulting in 1997 to help small- and mid-sized companies and corporate divisions develop a leadership mindset to drive growth and inspire innovation. Other highlights: The kick-off of the new Women of CoreNet Global Successors mentoring program, a Networking Power Lunch, a Best Practices Show-and-Tell-Athon and we will ring the doorbell at Avon headquarters for a site tour showcasing the company’s commitment to sustainability, CSR and women.
Looking for a venue to share ideas, solutions and best practices with others in your field? Meeting of the Minds is your answer. Designed for CRE professionals and key enterprise
partners to find common ground in an industry-focused roundtable setting, the 2013 workshop will target two industries with a strong concentration in the Northeast and within the CoreNet Global membership ranks: Financial Services
and BioPharma/Life Sciences.
David Goldsmith is a leadership instructor, management expert and forecaster. His other roles include consultant, advisor, New York university professor, speaker, telecast host and author. David has published more than 500 articles on topics such as strategy, technology, marketing, innovation and forecasting.
Steve Farber is president of Extreme Leadership, Inc., an organization devoted to leadership development in business, non-profit and educational communities. In 1989, after having run his own financial services company, Steve devoted his professional life to the field of leadership development and has been at it ever since.
Ready to push your performance envelope? Test your talents and sharpen your skills with renowned leadership gurus
Steve Farber and David Goldsmith. Unscripted, grow-as-you-go jam sessions are a fun, creative outlet designed to help you develop as an effective and knowledgeable CRE leader.
Participate in dive-in-drills and real-world trials – all while discovering what it takes to connect to business drivers and enterprise partners. Tap the collective brainpower and
expertise in the room in a dynamic ThinkTank session and reap the rewards in the IdeaBank finale.
#CNGForward
Leader’s Edge Presented by:
4 the leader | January/February 2013
Jim Scannell, ChairSenior Vice President, Administrative ServicesThe Travelers Companies, Inc.
Randy Smith, Chair-ElectVice President, Real Estate and FacilitiesOracle
Steven Quick, TreasurerExecutive Managing Director CBRE
Matthew J. FanoeImmediate Past Chair,Vice President of Real EstateCoca-Cola Refreshments
Erica Chapman, Esq.Head of Real Estate (NAFTA/LatAm) & Attorney OSRAM SYLVANIA
Micheal CreamerPartner and Head of EMEA, Corporate Occupier and Investor ServicesCushman & Wakefield
Maureen Ehrenberg Global Director of Facilities Management, Global Corporate ServicesCBRE
John Forrest CEO, Corporate Solutions Asia PacificJones Lang LaSalle
Philip Grossberg, LEED APManaging Director, Global Corporate Services CBRE
Lydia Jacobs-Horton Director, Global Facilities and Real Estate Procter & Gamble
Chris MachAssociate Director, Corporate Real EstateAT&T Services, Inc.
Irene MastertonGM Retail Real EstateShell International Petroleum Company Ltd.
Denis McGowanGroup Head CRES Business Alignment & Asset ManagementStandard Chartered Bank
Sean PrasadVice President, Real Estate and FacilitiesT-Mobile
Christopher L. Staal, MCRVice President and Global Head, Real Estate and Facility ManagementThomson Reuters
Lee R. Utke, MCRSenior Director, Global Corporate Real EstateWhirlpool Corp.
ASSOCIATE DIRECTORS
Jessica Beers, MCRVP, Business DevelopmentDTZ, a UGL company
T. Patrick DonnellyPrincipal BHDP Architecture
Gina RizzoGlobal Client RelationsHerman Miller
Robin RonneManaging Director, CEO CouncilGreater Fort Lauderdale Alliance
LEGAL COUNSEL TO CORENET GLOBAL
David GochWebster Chamberlain and Bean
EDITORIAL ADVISORY COMMITTEE
George Bouri, MCR, SLCRConsultantNew York
Del BoyettePrincipal, Boyette Strategic Advisors
Tom DonatelliVice President – Real Estate & Portfolio ManagementPfizer Incorporated
Larry EbertHead of Corporate Project ManagementCushman & Wakefield
Scott Foster, MCRSenior Vice President, Corporate WorkplaceBank of America
Thomas GlatteCorporate Real Estate ManagementBASF Group
David KontraManager, Real Estate Operations General Electric
Rick KrivaVice President, Global Real EstateHoneywell
Sally MaxwellProgram Manager IBM Real Estate Operations
Richard M. McBlaineChief Executive, Strategic ConsultingJones Lang LaSalle
Keith PerskeHead of Global Workplace Innovation Johnson & Johnson
Robin RonneManaging Director, CEO CouncilGreater Fort Lauderdale Alliance
Jim ScannellSenior Vice President, Administrative ServicesThe Travelers Companies
Tony Shou Fat Wong, MCRDirector, Workplace Resources, APJ Corporate Real EstateCisco Systems
EditorChelsie Butler
Editor-at-LargERichard Kadzis Contributing WritErs Melissa Securda Martin Sinderman Sonali Tare
CrEativE dirECtorBonnie Hofto
advErtising ManagErsMichael Mooney Tim Abrams Matt Dirks
EDiToRiAl offiCES Corenet global 133 Peachtree street, nE, suite 3000 atlanta, ga 30303 Phone: +1.404.589.3219 Fax: +1.404.589.3202 Web: www.corenetglobal.org
ADvERTiSing & pRoDuCTion offiCES Corenet global 2430 broadway, suite 200 boulder, Co 80304 toll Free: 866.362.4181 Phone: +1.303.565.4023 Fax: +1.303.443.6943 E-mail: [email protected]
The Leader, Corenet global’s official Publication, is published six times a year, as a bi-monthly publication commencing January/February, by Corenet global. subscription rates for non-members (in u.s. dollars): = in the united states, $75; in Canada, $85; outside north america, $95. to order, contact nicki Williams at 404-589-3241 or [email protected]. office of Publication: Corenet global, 2500 broadway st, ste 200; boulder, Co 80304-4237. the opinions expressed in this publication are not necessarily those of the association. The Leader is sent as a benefit of membership to all members of Corenet global. articles published in this magazine may not be re-printed without written permission from the Editor. Editorial inquiries should be addressed to Chelsie butler at [email protected].
PostMastEr: send address changes to: The Leader; 2430 broadway st, ste 200; boulder, Co 80304 or [email protected].
the leader is printed on recycled paperLEADERSHIP
To learn more call 800 336 0225 ext 6511 (U.S.) / 800 267 2149 ext 2128 (Canada) or visit us online at www.interface.com. Mission Zero and the Mission Zero logo are registered trademarks of Interface, Inc.
Be Global. Act Local.
With manufacturing facilities on four continents, we are where you are, creating and servicing some of the most beautiful and responsible modular carpet in the world.
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CoREnET gloBAl BoARD of DiRECToRSYour leadership makes the diFFerence.
To learn more call 800 336 0225 ext 6511 (U.S.) / 800 267 2149 ext 2128 (Canada) or visit us online at www.interface.com. Mission Zero and the Mission Zero logo are registered trademarks of Interface, Inc.
Be Global. Act Local.
With manufacturing facilities on four continents, we are where you are, creating and servicing some of the most beautiful and responsible modular carpet in the world.
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CoreNET Ad July.indd 1 5/21/12 4:21 PM
6 the leader | January/February 2013
FeatUreS
12 Cover Story Facilities Management
in China: Growth in Sustainability and Strategy
16 TechnologySimple Lighting
Control Retrofits Offer Sophisticated Benefits
20 Lower Costs & Greener Workplaces:
UBS’s Global Real Estate Strategy 2015
24 Corporate Real Estate Outsourcing:
A Transformative Look 20 Years Later
28 A Shared Vision, Strong Leadership and the Right
IT Platform Pave the Way for Innovation
32 Transforming CRE Service Delivery:
Unlocking Sustainable Value for the Enterprise
36 The Rise of the Human Factor:
Workplace for Well-Being
execUtive proFileS
End User 40Susan Wagner, Microsoft EMEA’s Innovation Leader
Service Provider 42Yaomin Xue, tvsdesign’s Asia Pacific Manager,
Economic Developer 44EDCUtah’s Todd Brightwell
Special intereSt FeatUre
Canada: 46A Diverse Economy on the Upswing
departmentS
Industry Tracker 52Extreme Information Management Brings Greater C-suite Access, Credibility
Dashboard 543rd Quarter 2013 Figures from Cassidy Turley
Leadership 4
Letter from the Editor 8
CRE in the News 10
Members on the Move 58
A Look Ahead 59
january/february 2013Volume 12, issue 1
TABLE OF ContentS
12
20
52
40
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8 the leader | January/February 2013
A great quote from motivational speaker Tony Robbins, and he’s right. As you read through the latest issue of THE LEADER magazine, you will definitely notice some changes. Our most recent redesign is a direct result of the feedback from the Readership Survey we deployed last year, where you – our readers – asked for a cleaner, updated and easier-to-read magazine format. After a few revi-sions and some positive feedback from THE LEADER’s dedicated Editorial Advisory Committee, we’d like to fulfill your requests and introduce our new look to you.
Thank you to our readers and to the Committee for your suggestions, and special thanks to our Creative Director, Bonnie Hofto, for the extra time she committed to designing the new layout.
You may also notice that the subject of our cover article is facilities management in China. As promised, this coverage is part of our ongoing commitment to our Strategic Priorities, which include strengthening our global footprint. The article – written by our Director of Knowledge and Research, Melissa Securda – is a condensed version of her in-depth report on the general business environment in China and is backed by the interviews she conducted during her travels to Shanghai last year.
Inside you will also find a Service Provider Profile on Yaomin Xue, tvsdesign’s Asia Pacific Manager, as well as an End User Profile on Susan Wagner, Senior Director of Real Estate and Facilities EMEA for Microsoft.
So as you can see, we are working hard on our part to make sure you are getting the best out of THE LEADER magazine – your vote for the biggest value add to your CoreNet Global membership – according to a recent survey.
As always, we appreciate your feedback, so please feel free to contact a member of our staff if you have any comments you’d like to make. You can also reach out to me directly at [email protected].
Thanks for your continued support and readership, and we hope you enjoy your new issue.
Chelsie Butler, Editor
By Changing Nothing, Nothing Changes
letter FrOM THE EdiTor B Y C h E l S I E B U t l E R
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10 the leader | January/February 2013
U.S. Office Market Vacancy Rate DecliningThe U.S. office market vacancy rate will continue to decline moderately next year, falling to 14.9 percent by the end of 2013, according to a new analysis from CBRE Group. Improvement in the office market will begin to accelerate in 2014, with the vacancy rate expected to drop to 13.8 percent by year’s end. The office vacancy rate in Q3 2012 was 15.5 percent, down 130 basis points from its peak of 16.8 percent in Q2 2010. CBRE noted that uncertainty had caused busi-nesses to pull back somewhat over the summer months affecting hiring deci-sions, but this is starting to reverse. Office-using employment remains below its pre-recession peak, but the gap con-tinues to narrow. CBRE anticipates that office-using employment will have recovered to its pre-recession peak by the end of 2013, setting the stage for more substantial demand for office space. As a result, it projects that average rents will increase by 3.5 percent in 2013, before accelerating to 4.4 percent rent growth in 2014. The top-performing office mar-kets will be those driven by technology and energy, and over the next two years, metro areas with strong concentrations of high-tech firms, such as Austin, Boston and San Francisco, will experience solid rent growth. Markets getting a boost from energy-related industries, such as Dallas and Oklahoma City, Okla., will also be well-positioned to take advantage of the economic recovery and will be
among the top 10 rent growth perform-ers over a two-year horizon.
Japan to Receive Government StimulusAccording to www.ft.com, Japan’s gov-ernment has approved its second round of stimulus in less than a month and announced it will tap reserve funds to spend Y88 billion ($10.7 billion) on a variety of measures, including rebuilding areas bit by the March 2011 earthquake, employment support and aid to cash-strapped small businesses. The stimulus comes as Japan sits on the brink of a tech-nical recession since manufacturers have cut production. Recent economic data were more encouraging, showing an unex-pected rise of 1.8 percent in industrial pro-duction from last September to October.
Asia Pacific Home to Top Global Shoring LocationsThe Philippines, India and China were the top three global shoring locations for corporations, according to a recent report
from Jones Lang LaSalle. The ranking was based on a number of jobs created, resulting from investment by corporations in shared service centers, customer contact centers and technical support centers from 2008 to 2011. The Philippines attracted 115 projects during that period, creating more than 72,000 jobs; India attracted 105 projects, creating 64,000 jobs; and China attracted 56 projects, which resulted in 25,000 jobs, as sourced from fDi Markets data (the Financial Times Ltd.) According to the report, “Onshore, Nearshore, Offshore: Still Unsure?”, the changing global economic landscape is impacting corporate strategy and loca-tion decision making, and companies are increasingly selecting from those three shoring options. While established off-shoring locations such as India and the Philippines continue to attract the high-est volume of offshoring and investment jobs, an increasing number of companies are looking to bring operations closer to home, with countries like the U.S. and the U.K. seeing increased activity.
Corporate real estate in the news
While established offshoring locations such as India and the Philippines continue to attract the highest volume of offshoring
and investment jobs, an increasing number of companies are looking to bring operations closer to home, with countries like
the U.S. and the U.K. seeing increased activity.
Learn and grow. Challenge and inspire. Lead and succeed. At the Shanghai Summit you’ll engage with thought-provoking speakers, experience innovative session formats, and enjoy world-class networking. Powerful sessions led by industry leaders and experts from around the Whether you’ve just started your journey in corporate real estate, or if you’re a senior-level business executive, there will be plenty of valuable information for everyone!
Get answers to timely questions including:• What are the key areas affecting the business of corporate real estate?• What role does the workplace play in attracting and retaining talent in
today’s competitive work environment?• How can you influence decisions affecting the long-term value of
your company?• Are you consolidating your portfolio? How do you communicate the value
of consolidation?• How can you leverage increasingly strategic and collaborative relationships
with supply-side service providers?
Pre-Summit MCR/SLCR Seminars25-26 March
Early Bird Registration Deadline is17 January 2013
Regular Registration ends17 February 2013
2013 Agenda
Join Us for the CoreNet Global Asia Pacific Summit in Shanghai convening high-level CRE professionals from around the world.
To register, visit www.corenetglobal.org/shanghai2013 or contact:In Asia: Mario Qian, Director, Member & Component Relations, Greater China & Japan+86 136 8194 9658, [email protected] of Asia: Karen Field, Registrar, +1 404 589 3212, [email protected]
MONDAY25 March 2013
TUESDAY26 March 2013
WEDNESDAY27 March 2013
THURSDAY28 March 2013
8:00 – 17:00MCR/SLCR Classes
8:00 – 17:00MCR/SLCR Classes
8:00 – 17:30Business Center/Lounge,
Coffee/Tea Service
8:00 – 9:00Networking Coffee/Tea
9:00 – 16:00Discovery Forum
8:00 – 9:00Special VIP Breakfast
8:00 – 16:30Business Center/Lounge,
Coffee/Tea Service
13:00 – 18:30Registration/Information Open
8:00 – 17:30Registration/Information Open
8:00 – 17:00Registration/Information Open
16:00 – 17:30Chapter Leaders Best
Practices Meeting
8:00 – 9:00Networking Coffee/Tea
8:30 – 10:30Site Tours
17:15 – 18:00ELC Reception
9:00 – 10:30Breakout Sessions
9:00 – 10:30Breakout Sessions
17:30 – 18:30Welcome Reception
10:30 – 11:00Networking Break
10:30 – 11:00Networking Break
18:30 – OnwardPrivate Events
11:00 – 12:30Breakout Sessions/
CORE Fundamentals/ REIMAGINATION Learning
Quarters and Arcade
11:00 – 12:30Breakout Sessions/
REIMAGINATION Learning Quarters and Arcade
12:30 – 14:00Peer-to-Peer Lunch
12:30 – 14:00Networking Lunch
14:15 – 15:45Breakout Sessions/
CORE Fundamentals/ REIMAGINATION Learning
Quarters and Arcade
14:00 – 16:00Breakout Sessions
15:45 – 16:15Networking Break
15:45 – 16:15Networking Break
16:15 – 17:45Breakout Sessions
16:15 – 17:30 General Session 2
MCR/SLCR Events
Sponsored Events
Networking Events
Invitation Only Events
General Sessions/Breakout Sessions
After Hours
#CNGShanghai
Register today atwww.corenetglobal.org/Shanghai2013
12 the leader | January/February 2013
Facilities Management in China: Growth in Sustainability and Strategy
B Y M E L I S S A S E C U R D A c
ov
er
St
or
y
January/February 2013 | the leader 13
In 1978, The People’s Republic of China embarked on a mission to liberalize market policies, and in the years since, the country has experienced extraordinary growth. The economic engine got a boost in 2001 when China
joined the World Trade Organization (WTO), and the result-ing economic boost drove the economy to its current status as the second-largest world economy. During this 30-year prog-ress era, the population urbanized, a middle class emerged, and property development raged.
Controlled evolution has been a key ingredient to China’s trans-formation. The government maps out a blueprint for the country every five years, and China’s Twelfth Five-Year Plan targets the following key areas for rebalancing the Chinese economy:
• Increase household income and encourage private spending; transition economic development from reliance on manufac-turing and exports; open up China’s service sector• Inclusive growth; distribution of economic prosperity across a broader population, including historically prosper-ous coastal cities, as well as more economically challenged interior cities • An evolving business model that supports innovation and R&D for Chinese enterprises. Sectors of focus: health care, energy, technology – known as strategic emerging industries; improved access for MNCs to invest in China’s strategic emerging industries• Sustainability/energy targets; environment-related taxes• Increase minimum wage; raw materials price reforms; education reformThe government’s attention to its strategic emerging indus-
tries will result in a larger office worker demographic. Premier office space in growing cities will continue to be in high demand as companies expand and emphasize brand and image
“Facilities managers need to do more to create awareness within
the organization about the long-term benefits and value
FM can bring to the business.”
14 the leader | January/February 2013
creation. Corporate real estate, currently in its infancy in China and driven in large part by multinational corporations (MNCs), is making larger strides toward greater sophistication. Shining a spotlight on the facilities management (FM) sector reveals a burgeoning industry making inroads across the country.
FM is a rather recent trend in China, and this segment of the real estate pie is starting to show signs of improved sophistica-tion. FM operations tend to be highly tactical in nature with a project-by-project mindset. However, a growing number of facilities managers in China endeavor to enable productivity in the workplace, incorporate sustainable strategies for building management and enhance the infrastructure to prolong the life of the asset. A new approach to FM is emerging in China; one
in which strategic building management contributes to a more valuable organization. The role of the facilities manager and the plans in place will become more and more strategic in nature as FM influences all aspects of the workplace.
Sustainability’s Role in FMSustainability will continue to influence design and construc-tion and will change the way FM is carried out in China. As in other parts of the world, there is a premium placed on sustainable buildings, therefore it is critical to integrate sustainability into FM and link back to the organization’s strategic plan to show the value add. Most of the focus in China is on energy use – it’s the piece of the pie FM managers can control. Building operations
A new approach to FM is emerging in China; one in which strategic building management contributes to a more valuable organization.
and their effective and efficient management are becoming more significant than the building’s initial construction. Facilities man-agers have the ability to adapt and modify the existing building structure when they begin to measure and track consumption.
China has seen significant growth in green building certifica-tion over the past five years. The US Green Building Council now reports more than 80 million square feet (7.4 million square meters) of LEED-certified projects in China. China began its own certification program, Three Star Green Building Certification, in 2006, and current estimates include 200 buildings certified in the program. Certification cre-ates accountability for energy efficiencies, reducing operating expenses over time and creates a meaningful contribution to resource preservation. Most of the certified stock is govern-ment owned, but the trend will continue to spread over time. Facilities managers can inte-grate the sustainable agenda into building operations and make the business case for increased sustainable measures by tracking progress. Companies – mostly MNCs but also a grow-ing number of state-owned enterprises and national Chinese companies – are starting to implement strategic FM planning with the goal of operating the building for maximum efficiency throughout the building’s lifecycle. This is achieved with FM working in tandem with project management; working in com-mitted teams to create creative solutions and measurable goals.
Powering through the ChallengesThe biggest challenge to implementing strategic FM operations lies with the local culture. Chinese corporate culture generally does not support risk taking and internal collaboration. Many traditional Chinese firms have the mindset that failure is not an option and often have a very linear process that does not pro-mote taking initiative and innovative ideas. Access to advanced FM training and exposure to a more collaborative business environment will eventually decrease the impact of traditional cultural influences in the organization. Guidance from MNCs and global service provider companies can help inspire greater self-confidence and the ability for local Chinese facilities man-agers to trust their decisions. The local industry needs greater transparency and integrity as it continues to evolve.
Facilities managers need to do more to create awareness within the organization about the long-term benefits and value FM can bring to the business. Allan Fan, Senior Facility Manager, Greater China for Life Technologies, suggested that facilities managers move forward with the mindset that proper FM brings enormous value to the organization.
“Spend time with the sales people and understand the core business,” he advised. “Link facilities management to company performance.”
About the Author
For more information on this topic, please search for this title on our Knowledge Center Online.
China Corporate Real Estate Survey 2012: The Dragon is Stirring
Melissa Securda is Director of Knowledge & Research at CoreNet Global. She can be reached at [email protected].
Doing so will increase transparency and improve service delivery between FM and business operations. Within the FM department, there is also a need for improved branding and marketing skills. Despite greater strides toward sophistication, most facilities managers in China are very technical, and it’s a challenge for them to communicate the department’s value-add to senior leadership.
Facilities managers need to demonstrate how the FM func-tion and energy efficiency are critical to the business by using
more sophisticated com-munication skills to sell FM achievements across the busi-ness. Doing so will ultimately benefit FM in the form of management respect and the potential for additional finan-cial resources when needed.
Facilities management is in catch-up mode in most national and state-owned enterprises. Many companies rely on outsourced partners because of the lack of internal expertise. Developing more
mature, locally sourced FM leadership in China is essential for the continued sophistication of the profession in China.A recent panel of local Chinese facilities managers was asked to describe the most pressing issue facing FM in China. The lack of available, skilled FM talent ranked at the top of the list.
“There are not enough people in the industry,” said Fan, “but we are eager to learn and want to catch up.”
FM is not an officially recognized profession by the Chinese government. Companies that perform these services must apply for a license as a property management company, though there is a significant distinction between the two functions. Currently, there is no formal degree at Chinese universities for FM. A greater focus on education would help generate more interest in the industry and let students know that FM is a strong career path because it is an integral part of business operations.
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Access to advanced FM training and exposure to a more
collaborative business environment will eventually decrease the impact
of traditional cultural influences in the organization.
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There are 71 billion square feet (6.6 billion square meters) of commercial building space in the U.S., and more than 90 percent of it was built in the last century.1 Making these buildings more efficient and more sustainable is
becoming a top priority for building owners, management compa-nies and tenants across the country. Local and federal codes mandate new energy standards; rising electricity costs drive facilities to reduce electricity use; and building owners are embracing the idea that efficient buildings can command higher rent, facilitate longer leases, limit tenant turn-over and reduce building operating costs.
Lighting accounts for approximately 38 percent of the average commercial office building’s total electricity use, which means that effectively managing lighting use can have a huge impact on a building’s energy costs1 (see Figure 1). In new construction, sustainable building practices are becoming the norm, but even in existing buildings simple strategies can be implemented quickly and easily to address inefficiencies, reduce energy use, improve comfort and enhance productivity in the space. Three of the most
B Y B R I A N D A U S K U R D A S
common contributors to lighting electricity waste in buildings include spaces that are over-lit, lights that are left on 100 percent of the time and spaces that do not make adequate use of daylight.
In spaces that are frequently over-lit, digital dimming ballasts can reduce maximum light levels in a space by 20 percent or more – a strategy called high-end trim or institutional tuning. Because the human eye readily adapts to slight variations in ambient light, those changes are virtually undetectable to occupants. High-end trim typically saves 15-20 percent lighting electricity.2
Occupancy/vacancy sensors ensure that lights are not left on when a space is vacant, generally saving an additional 30 percent.3 In perimeter spaces, daylight sensors can automatically adjust light levels based on the amount of daylight in the space. Daylight har-vesting can contribute 20-60 percent lighting energy savings,4 and like high-end trim, because lights adjust over a few seconds, the change is generally transparent to the people in the space.
Another ideal space for occupancy sensors is stairwells. Mike Hodowanec, Purchasing Manager for the Reading Area
Simple Lighting Control RetrofitsOffer Sophisticated Benefits
January/February 2013 | the leader 17
Community College in Reading, Pa., describes how wireless occupancy sensors communicate with retrofit, field-adjustable stairwell fixtures to save significant lighting energy in his facility.
“We installed the retrofit solution in 11 stairwells on our campus and then programmed these fixtures to deliver a high-end light level of 60 percent for an occupied stairwell and a 10 percent low-end light level for an unoccupied stairwell, which still exceeds minimum code requirements,” he said. “Our initial analysis indicates lighting energy savings of between 80 and 82 percent as a result of the new lighting control solution.”
Recently, as part of a sustainable building retrofit program, the Empire State Building in New York City incorporated these simple lighting control strategies throughout its prebuilt tenant spaces. The building is committed to reducing overall energy use in its facility by 38 percent. The installed lighting controls are expected to reduce lighting electricity use alone by 65 percent,5 with a payback of 2.75 years6 – making a signifi-cant impact on the building’s overall energy-reduction goals.
Having identified some basic strategies for managing light-ing energy use in retrofit applications, it is useful to understand specific market trends driving the implementation of lighting control strategies and combating lighting energy waste. • Stronger codes and standards• Federal mandates• The rising cost of electricity• Payback and ROI considerations
Stronger Codes and StandardsEnergy codes and standards vary by state, but all of the nation’s top energy codes reflect the importance of using lighting con-trols to conserve energy. Most U.S. states, with the exception of California, which uses its own stringent Title 24 standard, currently use the standards established by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE 90-1-2007), or those established by the International Energy Conservation Code (IECC).
On October 19, 2011, the U.S. Department of Energy issued a ruling that requires all states to certify that they have updated the provisions of their commercial building code regarding energy efficiency, to meet or exceed ASHRAE 90.1-2010 Standard by October 18, 2013.
As part of its revised code, ASHRAE 90.1-2010 also requires that if more than 10 percent of the lighting load is altered in a space (i.e. at least both the lamps and ballasts are changed), all the lighting in the space must comply with automatic shut-off and lighting power density requirements. Essentially, when a facility is replacing any signifi-cant number of fixtures, it makes economic and practical sense to include lighting control at that time. By choosing a lighting control system that incorporates digital dimming ballasts and wireless controls, you can minimize labor and materials costs, while enabling your building to increase energy savings and realize a more attractive ROI.
The following are some of the minimum lighting control requirements that have been adopted by at least one of the three major building energy codes/standards (ASHRAE 90.1-2010, IECC 2012 and Title 24 2008). These minimum requirements apply to both new construction and renovation or alteration of building lighting.
• Area control. Each area enclosed by ceiling-height parti-tions must have an accessible, independent switching or con-trol device (such as an occupancy sensor, manual switch, or dimmer) to control the general lighting.
• Automatic shut-off. All indoor lighting systems must include a separate automatic shut-off control, such as an occu-pancy sensor or time switch. A wireless occupancy sensor, featuring patented technology to limit interference and ensure that occupants will never be left in the dark, can be installed in minutes and reduce installation costs in building retrofits.
• Daylight zone control. Areas in daylight zones* shall have a separate control for the general lighting.** Typically, a daylight sensor and dimming ballasts that control at least half of the general
Figure 1: Lighting electricity accounts for approximately 38 percent of building electricity use.
Daylight sensors can work with digital dimming ballasts to automatically adjust light levels based on available daylight
Lights offLights dimmed by 80%
Lights dimmed by 50%
18 the leader | January/February 2013
lighting power meet this requirement. Switched daylight control also complies with code but is more disruptive to occupants.
By utilizing digital dimming ballasts that communicate wire-lessly with automatic dimming controls and wireless daylight sensors, electric light can be effectively used as a complement to available daylight without compromising appropriate light levels.
• Functional testing. Prior to inspection, lighting controls must be tested to ensure they are working properly. Building owners and managers can select lighting controls from a manu-facturer that tests every product before it is shipped out to the customer, limiting issues during installation and reducing the chance of delays during building inspection.
• Light reduction controls. Most spaces must allow the occu-pants to select a lighting level that is between 30 and 70 percent of full power (at least 50 percent or lower for IECC) in addition to OFF by either continuous dimming, stepped dimming (dim-ming lights to certain, pre-defined, light levels) or stepped switch-ing (separately switching alternate lamps in a fixture or alternate luminaires in a space) while maintaining a reasonably uniform level of illumination throughout the controlled area. Personal dim-ming controls will allow the occupants to choose the level of light appropriate for the work they are doing. Digital ballast technolo-gies allow fixtures to respond individually, or as a group, to ensure the right light levels for the space and also enable these fixtures to be quickly and easily reprogrammed without rewiring or expensive software changes in the event of changes to the space.
• Occupancy sensor or timer switch controls. Occupancy sensors that turn off lighting within 30 minutes of vacancy are required in spaces such as, but not limited to:
- Classrooms and lecture halls- Conference, meeting and training rooms- Employee lunch and break rooms- Storage and supply rooms
Wireless controls make it easy to add occupancy/vacancy sensors to any space without additional wiring or complex programming.
• Stairwell controls. Lighting in enclosed stairwells shall have one or more control devices to automatically reduce lighting power by at least 50 percent within 30 minutes of vacancy. Select a stairwell fixture solution that communicates with a wireless occupancy sensor and features adjustable high- and low-end light levels to ensure lights come on to a predetermined light level when the space is occupied and return to a minimum level when it is unoccupied. Stairwells are used rarely, or only in emergen-cies, and energy savings of 80 percent can be achieved with an occupancy-sensing lighting control solution.
Federal MandatesIn addition to building codes, federal mandates are changing the landscape of the commercial lighting environment. As of June 2012, federal mandates prohibit the manufacture or import of old-style T12 fluorescent lamps. Fluorescent light fixtures are the predominant light source in commercial buildings, and as many
Wireless occupancy sensors and daylight sensors and controls can be installed quickly and require no additional wiring.
Figure 2: Electricity costs have been rising steadily over the last 50 years.
1960 20101965 1970 1975 1980 1985 1990 1995 2000 2005
Cen
ts p
er k
Wh
Source: US Dept. of Energy, Enrgy Information Administration
0
2
4
6
8
10
12
as 500 million T12 lamps are estimated to be in use today. All of these lamps will have to be replaced with more efficient T8 or T5 lamps and electronic ballasts within the next few years.
When a property owner is required to invest in fixture upgrades to accommodate this mandate, it makes sense to invest a little more up front to realize significant lighting electricity savings over the long term. Reducing lighting electricity use also minimizes heat gain and can contribute additional HVAC sav-ings. Combined with potential cost savings from local and federal rebates and savings realized as the actual cost of electricity rises, a digital dimming solution is often the lowest cost, most sustain-able option in commercial lighting retrofit applications.
Commercial electricity prices have been steadily rising for the last 50 years and are generally up an average of 20 percent in just the last five years (see Figure 2). There is very little the end user can do to reduce the actual cost of electricity, but a digital, wireless lighting controls solution helps ensure that it is easier to manage lighting operating costs as prices rise. By choosing a solution designed to work with any light source, as more efficient light sources are introduced to the market, the building will be able to incorporate those new technologies without having to replace the entire lighting control system.
Payback and ROIIf a building currently relies on manual controls to switch light fixtures, investing in a lighting control system that incorporates automatic control strategies will typically deliver lighting elec-tricity savings of 60 percent.5 A lighting control system can pro-vide even greater savings in areas like stairwells and restrooms that are often used only intermittently but are required by code to be illuminated 100 percent of the time.
In these spaces, a dimming solution that incorporates occu-pancy sensors can ensure that lighting is dimmed to minimum levels when the space is vacant and automatically increased to a preset level as soon as the space becomes occupied, achieving energy savings of up to 80 percent.7 Energy rebates are available in many areas to offset the cost of materials and labor, and a three-year ROI can be expected with the appropriate system.
Other Considerations It is important to keep long-term goals in mind when you are selecting a lighting control solution for a building retrofit or reno-vation. Choose a manufacturer with a proven record of product innovation, customer support and high quality. Look for digital, wireless solutions that can easily be adjusted and reprogrammed to accommodate new building occupants or adapt to different tasks and users in the space. Occupancy sensors should feature technol-ogy that reliably detects both fine motion and major movement to ensure that no occupant is ever left in the dark. Wireless commu-nication protocols should ensure that the installed lighting control products communicate clearly and without interference or flicker regardless of other technologies in the space.
Simple retrofit lighting control solutions can be installed quickly and easily, especially when they are included as part of an essential fixture retrofit. The right solutions will make your build-ing more efficient, help meet building code requirements, provide
About the Author
For more information on this topic, please search for this title on our Knowledge Center Online.
• The Energy Challenge: A New Agenda for Corporate Real Estate
Brian Dauskurdas, Director of Total Building Solutions for Lutron Electronics, is in charge of the company’s Global Energy Sales Team, which is focused on leading the company’s growth into existing building retrofits. He sits on Chicago’s Construction and Real Estate Council and is an
advisor to RealComm’s Intelligent Building Council.
greater control to the occupants in a space and deliver enhanced value to the building owner.
Editor’s Note: CoreNet Global advocates energy management and conservation as socially responsible corporate practices. You can find more informa-tion at www.corenetglobal.org.
Sources:1Energy Information Administration, 2003 Commercial Buildings Energy Consumption Survey. Building Characteristics Tables, released December 2006. Retrieved from http://www.eia.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/2003set1/2003pdf/a1.pdf. 2Williams A, et al. 2012. Lighting Controls in Commercial Buildings. Leukos. 8(3) pg 161-180. 3VonNieda B, Maniccia D, & Tweed A. 2000. An analysis of the energy and cost savings potential of occupancy sensors for commercial lighting systems. Proceedings of the Illuminating Engineering Society. Paper #43. 4Brambley MR, et al. 2005. Advanced sensors and controls for building appli-cations: Market assessment and potential R&D pathways. Pacific Northwest National Laboratory: prepared for U.S. Department of Energy. 5Compared with manual (non-automated) controls, up to 65% lighting energy savings is possible on projects that utilize all of the lighting control strategies used by Lutron in the Empire State Building project (occupancy sensing, high-end trim, and daylight harvesting). Actual energy savings may vary, depending on prior occupant usage, among other factors. 6Estimates based on Lutron controls installed in Empire State Building pre-built tenant space. Payback claims assume 65% reduction in energy costs, and energy rates of 22 cents per kWh. Actual payback terms may vary. 7Reading Area Community College Case Study, December 2011. Retrieved from http://www.lutron.com/Residential-Commercial-Solutions/SolApp/Education/College/racc/Documents/3672264_Project_Overview_RACC_d.pdf. Savings assumes the replacement .of a 2 lamp 40W T12 stairwell fixture at full output for 8760 hours with a 2 lamp 32W T8 fixture at 50% output for 2190 hours and 10% output for 6570 hours. *Daylight zones are typically one window height (distance from top of window to the floor) into the space and the width of the window, plus two feet on both sides of the window.** General lighting is lighting that provides a substantially uniform level of illumination.
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20 the leader | January/February 2013
More than ever before the financial sector is under scrutiny, with clients demanding better value from its products and greater transpar-ency within services. The recent economic
downfall has caused the financial sector to identify cost sav-ings across the businesses and ensure that every aspect is run-ning at maximum efficiency.
This, with an additional commitment to sustainability, has created a strong business case for global financial services firm UBS to rethink its corporate real estate (CRE) strategy and cut long-term real estate costs and create greener and more attractive workplaces for its employees and clients.
Present in all major financial markets worldwide, UBS has offices in more than 50 countries, with about 35 percent of its 64,000 employees working in the Americas; 36 percent of its employee base in Switzerland; 17 percent in the rest of Europe, the Middle East and Africa; and 12 percent in Asia Pacific.
UBS’s New Strategy DefinedWith such an expansive CRE portfolio, a significant propor-tion of the company’s budget is allocated to real estate. To ensure that the management of this is executed effectively, UBS has committed itself to taking an innovative approach to implementing and using its CRE projects to generate increased efficiency and, in turn, better value for its clients.
At the heart of this new approach is UBS’s global real estate strategy 2015, also known as “Footprint.” Footprint is the
Lower Costs & Greener
Workplaces: UBS’s Global real estate
Strategy 2015
B Y N I C K G A R N I S S A N D P E T E R W E L S B Y
global implementation of a defined five-year real estate strategy assigned to a particular region (e.g. Zurich, London and New York City). The premise of the strategy is the significant reduc-tion of ongoing costs; the exiting of less-efficient buildings; concentration on bigger buildings; and the relocation to more affordable, peripheral locations as part of a new workplace con-cept, “Workplace for the Future.” This strategy covers each of UBS’s major centers.
UBS’s offices at 5 Broadgate in London.Make Architects
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London ImplementationIn London, the focus of the strategy is the agreement for UBS to be the sole leaseholder of the new development currently under construction at 5 Broadgate in the heart of the city, as well as the complete rethink of the company’s existing premises at Liverpool Street as part of the new site.
The design for 5 Broadgate is a proposed world-class office facil-ity to be developed and ready for occupancy in 2016. The 12-story,
state-of-the art development will bring the firm’s trading opera-tions together into one building as outlined by the strategy, which is based on two key components – consolidation and space effi-ciency – and that is driven by four fundamental principles:• Effectiveness: collaboration, integration, execution• Efficiency: flexibility, cost efficiency• Environment: sustainability, resource efficiency• Identity: values, branding, attraction
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UBS’s London CRE portfolio currently consists of the Broadgate Campus buildings, the 1980s campus at 100 Liverpool Street and 1 Finsbury Avenue, which have served their purpose well for more than 25 years. However, consoli-dating these locations will increase efficiency and collabora-tion among the UBS teams, demonstrating a commitment to a new way of working in financial real estate. This move will also allow UBS to consolidate its trading operations into one building, resulting in the retention of UBS in the heart of London.
The new building at 5 Broadgate will incorporate four 60,000-sq.-ft. (5,574-sq.-m.) trading floors, meeting and conference facilities, flexible workspaces and a range of ame-nities that will be implemented to enhance employee and cli-ent experience. In addition, the building has been designed to include the highest standards of sustainability good practices, which include generating renewable energy with photovoltaics and solar thermal panels, reducing water consumption by rainwater harvesting and innovative technology and increasing biodiversity through the incorporation of green roofs and terraces.
Overcoming Project ChallengesTo realize the longer-term vision, UBS has had to implement a short-term CRE strategy to bring its current facilities up to date and make them compatible with the switch over in four years. This short-term strategy will facilitate the relocation of employees and is based on improving current corporate accom-modations, replacing critical infrastructure assets and ensuring
the most efficient use of space before the move.
A lease break in the Broad-gate Campus buildings was critical to enable the move to the new development. UBS had a break for 2016 that was unmovable, which meant that “Project Twister” – equipping the campus for its stay before 2016, improving accommoda-tion, replacing critical infra-structure assets and ensuring the most efficient use of space – needed to be delivered
within 24 months. This was a significant challenge for a global financial operation that functions at 100 percent, 24 hours every day, 365 days a year. UBS required a partner that would align itself seamlessly into the organization and not require a signifi-cant amount of “bedding in” time before starting the program.
To realize the longer-term vision, UBS has had to implement a
short-term CRE strategy to bring its current facilities up to date
and make them compatible with the switch over in four years.
UBS’s Liverpool Street location is part of the company’s consolidation into one office.
The premise of UBS’s new model of real estate delivery was that it needed to be based on an integrated relationship. It was this relationship and how it was united with the busi-ness that would determine the project’s achievability, combat the challenges, generate the most value for money and risk adverse solution, create true accountability and transparency and, most importantly, enable the company to continue to innovate during the program.
This need to innovate was vital. As part of its CRE strategy, UBS made assurances that any upheaval would not only not impact its day-to-day activity, but would also not affect its com-mitment to innovation and better working practices. The busi-ness continuity plan needed to remain watertight.
To achieve this, UBS collaborated with partners to deliver solutions that were:• Client and risk appropriate• Commercially astute, incorporating best practices for landlord and supplier management• Change ready, forward focused• Measurable in terms of results• Team centered, leveraging bank-wide processes, learning and talent• Effective (doing the right things) and efficient (doing things right)
After a review of the UBS London portfolio and real estate vision, it was identified that there were 133 business-critical proposed projects in the program pipeline; these had to be delivered within a fast-track solution that would allow the moves to take place within the required timelines.
UBS partnered with Mace, an international construction and consultancy company, and Mace’s approach to the UBS vision was based on four core principles:
• Integrated service route. This would identify efficiencies and reduce risk through effective coordination, with Mace as the sole point of contact across the project. This responsibility and accountability was a key aim for UBS.
• One team. Full integration with the client was ensured with Mace and UBS project managers working side by side.
• Business as usual. A focus on quality of output and mini-mizing disruption to the work force was imperative.
• Flexibility. A flexible approach was necessary to accommo-date the needs of the business.
Results collated from the reconfiguration report that all parts of the project have been delivered on schedule and within budget, and the value of efficiencies demonstrated throughout the project equate to £1.7m (5 percent) of the total spend. In 24 months, the projects were dealt with very much as a “bolt on” to the day-to-day operations of UBS. The inevitable moves and small works required to meet the chang-ing needs of the businesses and the planned maintenance activities have all been implemented without disruption. A remarkable fact is that more than a quarter of a million hours were worked without a single incident.
Without a doubt, the most impressive feat in the refurbish-ment element of the overall project was the complete overhaul of seven floors of UBS’s 3 Finsbury Avenue location in prepa-
About the Authors
For more information on this topic, please search for this title on our Knowledge Center Online.
Breaking New Ground - The Global Integrator Model
Nick Garniss is Executive Director CREAS Europe North/East and MEA, Property Management, for UBS.
ration for the relocation of the business from Curzon Street. This was achieved in just 12 weeks from start to finish – one month ahead of the originally agreed-upon completion date.
The integrated real estate solution included all the benefits of a reduced overall cost base, shared culture, focused develop-ment of people, tailored solutions, investment and transpar-ency. Operating as one entity, UBS and Mace have been able to work toward common objectives and take their shared vision to market at a much faster speed. This success has proved that this type of integrated model can work within any industry that relies on the continuation of services, 24 hours a day.
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Peter Welsby is Mace’s Program Manager/Operations Director.
24 the leader | January/February 2013
The trillion-dollar industry known today as corporate real estate (CRE) outsourcing was born in the early 90s during a convergence of macro business events and guided by visionary leaders who prodded CRE provid-
ers to grasp what would become a huge business expansion oppor-tunity. A desire among large corporations to outsource non-core functions, coupled with real estate providers that had an appetite for large, multi-market services and global expansion, resulted in an industry that today serves more than two billion square feet (186 million square meters) of property for users – in virtually every country of the world.
In 1990, a large real estate services company would have oper-ated a few regional offices with a managed portfolio of 10-30 mil-
lion square feet (929,020-2.8 million square meters). Technology consisted of client servers and desktop computers running a basic financial accounting program. Internal real estate departments at large companies had hundreds of employees scattered worldwide, planning and acquiring space, building new offices, managing owned properties and trying to keep track of costs and lease data manually. The recession of the early 90s pushed large occupiers to look for ways to become efficient, and CRE became a ripe opportunity for cost reduction and outsourcing initiatives.
“It was A.T. Kearney, Bain and Booz Allen Hamilton and other consultants that pushed corporations to outsource as a way to save on operating costs,” according to Bill Agnello, who at the time was working with Baxter Healthcare and was an
Corporate Real Estate Outsourcing: A Transformative Look 20 Years Later
b y T H O M A S b O G L E
January/February 2013 | the leader 25
early driver of managing a large portfolio through outsourcing. “Leveraged buyouts were a dominant school of thought at the time, and large corporations were challenging their business models. This led to a lot of pressure on support groups to rede-fine their value add.”
Bruce Russell, a non-real estate professional, was asked to take over Kodak’s global portfolio during that time.
“I remember when in my first meeting with our new CEO he asked me what we could save from real estate globally, and I think I told him $500 million in operating costs and hundreds of mil-lions in additional cash flow,” said Russell. “However, I initially had no idea how to achieve those aggressive goals, and I knew we needed help from the outside. There were no restrictions as to engaging all parts of the company in what became a major corpo-rate-wide initiative to reduce occupancy costs. We were all under tremendous pressure to improve corporate performance.”
Other large corporations, including IBM, AT&T, Hewlett-Packard and Digital Equipment, encountered the same challenges of reducing costs and improving performance while adding value to their company. But, as Russell noted, “The service provider community wasn’t ready. They lacked geographical coverage, broad business skills and for the most part had a broker mindset focused on the local deal.”
An industry milestone occurred when CB Commercial (now known as CBRE) acquired Madison Advisory Group in 1992. Madison was composed of more process-oriented real estate pro-fessionals, and they were willing to invest time in developing port-folio solutions – not merely executing local deals.
In New England, toward the end of the technology boom of the 80s and early 90s, Digital Equipment decided to outsource facilities management (FM) at its corporate campus to Compass Management & Leasing. In a matter of a few months, a FM assignment of a million square feet (92,903 square meters) grew to more than four million square feet (371,612 square meters) and within 12 months had expanded to facilities throughout the U.K. In the process, the company saved millions of dollars in operating expenses and reduced internal headcount, while the provider ended up with a multi-million-sq.-ft. client. For real estate professionals, these new corporate portfolio accounts represented an opportunity to rapidly grow their business and expand into regional and global relationships with substantial users of space.
John Davis, then in the CRE department with Bank of America, remembers in the early 90s that providers were beginning to discuss providing services to clients typically provided in house.
“We had a senior vice president who was the head of interna-tional CRE at Bank of America, one of my counterparts,” said
Key Milestones in the Evolution of Corporate Real Estate Outsourcing
Sources: Trammell Crow, Wikilnvest, CoStar, Jones Lang LaSalle, Funding Universe, Cushman & Wakefield,
Bizjournals, NY Times, Wikipedia, Newmark Knight Frank & National Real Estate Investor
26 the leader | January/February 2013
Davis, who is now a partner with Capstan Advisors. “He came to me one day and said ‘We need to keep these vendor guys out of our shop; they are trying to take our jobs.’ I made a career decision in 1994 that the future of CRE might be on the service provider side and joined Koll Management Services. Of course we had virtually no infrastructure in place for these large assign-ments, no processes and little standardization. The entire infra-structure that exists now had to be put in place.”
According to Cushman & Wakefield’s John Santora, “In those early days, we had little information about the properties and very little data to make decisions. We also had clients who wanted to outsource but did not have complete control over all of their real estate, so that was a challenge we and others faced. In the mid-90s, we saw that this business was for real and we began investing in people, systems and standardized processes to serve clients. It was just something we had to do.”
CRE professionals in large firms were under pressure to reduce costs and create shareholder value, and the provider community saw opportunity. In the early 90s, most real estate professionals sought to win an assignment for a single property. Winning a 300,000-sq.-ft. (27,871-sq.-m.) property management assign-ment from an investor-owner was a reason to place a tombstone
advertisement announcing the win. But when companies began to entertain large portfolio assignments, a dynamic and fast-growing industry was born.
“Guys like Bruce Russell at Kodak literally took us to school, brought us in and had training classes on how we should think about their portfolio in order to provide services to them,” said Gary Beban, who at the time was the President of CB Commercial. “We were creating the business as we went along with their help. Brokerage companies weren’t that strong with processes and standardization, but our clients were increasingly demanding a more sophisticated approach.”
As a new century dawned, dozens of firms were taking major steps to outsource their CRE functions. Baxter Healthcare hired Trammell Crow for FM services. The demonstrated costs savings, increases in operating efficiencies and knowledge trans-fer were increasingly demonstrated across industries.
Lynn Kious, who was with First Interstate Bank, saw that the “transfer of knowledge from the provider community to the clients was evident from the beginning.” Kious, who is now at Johnson Controls, believed early on that this shift to providers “was and still is an exciting development, raising the performance bar for all of us in the industry.”
“The service provider community wasn’t ready. They lacked geographical coverage, broad business skills
and for the most part had a broker mindset focused on the local deal.” - Bruce Russell
By 2000, it was clear that many of the world’s largest companies were signing contracts with service providers and outsourcing sig-nificant pieces of their real estate and facilities organizations. The provider community was in the middle of a wave of consolidation, as firms were acquiring both functional and geographic capabili-ties to serve the expanding corporate client base. In 1998, Jones Lang LaSalle acquired Compass Management and Leasing and strengthened its corporate services offering. Likewise, CBRE acquired Trammell Crow in 2006 and gained stronger project and facilities capabilities. In 2005, Johnson Controls bought USI, a smaller firm specializing in real estate services to corporations. These multi-billion-dollar investments and the fee business they represented are evidence CRE outsourcing is a growth industry – with enormous residual potential.
By the mid-2000s, it was common to walk into any large CRE department and see service provider employees sitting on site, adjacent to the clients they were serving. As the confidence in the capabilities of the providers increased, global contracts were established for multiple services. Technology tools were developed and acquired to service the needs of global portfolios. Now that larger providers had assembled significant footprints of offices, “integrated solutions” or the provision of multiple services under one contract was being offered by providers. “One-stop shopping” became the mantra from sales people from the provider firms, and some companies experimented with this approach. Other clients preferred best-in-class providers by function or region and retained multiple providers. In recent years, some clients who tried the fully integrated solutions have begun to rethink this approach and either brought some functions back inside their organizations or segre-gated the work among multiple providers based on geography or functional expertise. Evidence in the market points to the fact that clients are evolving from the one-size-fits-all approach to a more custom approach based on providers’ real capabilities.
“Some firms believe they have actually outsourced too much or given too much to one provider and are pulling some things back in house or moving to multiple providers,” said Davis. “I don’t think you are going to see two- and three-people CRE departments for large companies as much in the future.”
In the past 24 months, a hybrid model for service delivery has developed and been pioneered by firms like Microsoft and Accenture. These firms have been in the market for an integra-tor – a company that integrates the data and processes of multiple providers across the globe. This approach, which is innovative
About the Author
For more information on this topic, please search for this title on our Knowledge Center Online:
• Service Delivery and Outsourcing: Strategic Alignment of the External Resource
Network
Thomas W. Bogle is EVP & Group Head, Strategic Portfolio Solutions for Studley. With more than 20 years as a CRE and facilities professional, he has had leadership roles within the industry’s leading firms.
and not fully evolved, enables a large firm to avoid the costs and friction required to directly manage multiple providers but enables a best-in-class approach in different geographical regions and multiple functions.
Roughly two decades after the inception of outsourcing by visionary companies and industry leaders, the outsourced model for CRE services has become “the way things are done,” and no one believes the clock will turn back on this paradigm shift in real estate services delivery. So what does the future hold?
“I guess we are in the middle phase of our development as an industry. We have made great progress, but I think the clients and our competitors believe that we still all have a long way to go,” said Santora. “I think CRE outsourcing has cre-ated an entire new service line, an entire new service compo-nent of the company that is a big driver of our business and has helped in the globalization of our company.”
Some observers noted that collaboration among service provid-ers is growing as clients select more than one provider and sit them adjacent to one another with high expectations for cooperation and collaboration. Others noted that the focus on efficient use of work-spaces will continue to be an issue confronting large users, and the provider industry will be pushed to develop innovative approaches to increase productive use of increasingly costly space.
One fact is clear: An idea that started in the minds of a few industry leaders 20 years ago has radically changed the CRE services industry. We have evolved from an industry less focused on the real estate investor community to one increas-ingly focused on the user and occupier community.
January/February 2013 | the leader 27
“Some firms believe they have actually outsourced too much or given too much to one provider and are pulling some things back in house or moving to multiple providers. I don’t think
you are going to see two- and three-people CRE departments for large companies as much in the future.” - John Davis
28 the leader | January/February 2013
It is no secret that today’s leading corporations are intensely focused on ways to foster greater creativ-ity and innovation within their
work force. Companies that consistently innovate – and do it well – can create a significant competitive advantage, get products to customers faster and tap into new and emerging markets. Corporate innovation is the engine that propels businesses to success in today’s knowledge-based economy.
The changes taking place in the physi-cal work environment are surely helping companies innovate better. However, workplace design alone will not help companies become more innovative. For true innovation to occur, real estate has to be part of an overall corporate strategy that includes strong leadership, shared vision, engaged employees, technology and infrastructure that enables the business to address real customer needs, as well as a corporate culture that enables risk taking.
Barriers to Innovation A 2012 joint survey conducted by Cushman & Wakefield and CoreNet Global cites both the importance of innovation and the barriers that exist to companies achieving it. The survey, conducted at CoreNet Global’s Spring Summit in San Diego, polled more than 1,500 corporate real estate (CRE) professionals from around the world. Of those polled, approximately 87 percent indicated that fostering better creativity and innovation was either important or extremely important to their organizations. The results also noted that almost 40 percent believe their staff should spend an average of 1/3 of their time focused on activities that generate higher levels of creativity and innovation. These results support what many current
A Shared Vision, Strong Leadership and the Right IT Platform Pave
the Way for Innovation
B Y L U I G I S C I A B A R R A S I , K I M C O T T E R F U C H S A N D R I C K C L E V E L A N D
organizational and leadership management experts believe when they discuss the need for corporate innovation. Most of these experts conclude that those organizations that do not consistently innovate run a risk of being left behind their competition at an increasing rate.
The survey also identified contribut-ing factors to innovation, such as the physical work environment, with 68 percent of respondents rating the qual-ity of the work environment as a con-tributing factor to innovation. However, the most important contributing factor identified was in-person interaction and collaboration with more than nine out of 10 respondents ranking it the most important contributor to work force
innovation. This presents challenges for many corporations that have a larger percentage of remote workers who are not neces-sarily in the office daily or weekly.
Perhaps the more illuminating results of the survey, however, center on the current challenges organizations face in getting their employees to innovate at higher levels. Of those surveyed, more than 40 percent identified challenges with not having adequate technology and a risk-adverse corporate culture as hampering innovation. Approximately 32 percent of those professionals surveyed felt that strengthening corporate mandates to promote uninhibited work environments among staff would have a positive effect on innovation.
The Physical Environment and InnovationThe transformational changes occurring in workplace design can address many of the challenges to innovation. Open floor plans with common collaboration and social spaces encourage greater
January/February 2013 | the leader 29
employee interaction, and mobility programs and hot-desking promote the new ways in which we work and how technology is used in the work environment. These new programs and designs are in large part focused on helping foster improved employee engagement and collaboration, which theoretically leads to better ideas and ultimately more innovation. If done properly, today’s new work environments can provide the corporation with the right framework for innovation to occur. However, the organization cannot simply force its employees to innovate because they are in a different environment. The physical workplace can only provide so much. Workplace design, with the objective of fostering innova-tion, must be accompanied by an overarching corporate strategy and culture that encourages and enables employees to innovate.
Necessary Factors for Achieving Successful InnovationAs the survey results indicate, one of the biggest challenges facing organizations today is creating a culture that sup-ports and embraces innovation. Wikipedia defines culture as the “attitudes, experiences, beliefs and values of an orga-nization.” Given this, the question then becomes, “What are the significant factors and tools needed to successfully create a culture of innovation?”
While the physical environment is one of the tools (68 percent of respondents indicated it would help), it is still only one part of the total. Other important factors include clearly defined objectives, a shared vision, leadership, communication, recognition and the right IT platform. All of these require consistent senior executive support. This top-down approach provides the framework that allows creativ-
ity to happen through cultivating, playing, venturing, enabling risk taking and harvesting the spark of innovation.
• Leadership. Successful leaders create the right environments – both physical and cultural – for their employees to work. Leaders need to create the opportunity for effective collaboration, and the best collaboration happens face-to-face, in the right location and with the right tools. Creating the atmosphere for collaboration means managing teams and defining a clear set of goals and expecta-tions to maximize performance on a shared vision. Maximizing team performance relies on two major leadership functions. The first is to set the stage, which includes identifying the right team members and creating a positive operating structure. The second is to coach team members by effective communications, which includes clearly
defining goals and objectives and providing an atmosphere of positive and constructive debate. This model establishes the foundation of an empow-ering leadership style that cre-ates a platform for maximum team performance.
Another leadership element is the opportunity to take risks, to experiment and to cham-pion change. While change leadership is scary to some, by
embracing experimentation leaders send the signal that it’s ok to take risk. This includes understanding how decisions about opportunities are made and how to provide the thought leadership to influence direction. Providing a more tolerant approach to risk taking contrib-utes greatly to a culture of innovation.
• The Right Technology. Information management and technol-ogy is also critically important to supporting an innovative atmo-sphere. Distinguishing between core and enabling technologies
Figure 1: Barriers to Innovation
Leaders need to create the opportunity for effective collaboration, and the best
collaboration happens face-to-face, in the right location and with the
right tools.
30 the leader | January/February 2013
will help leadership focus on tools that will enable innovation. Core technol-ogy supports and provides leverage to achieve core competency objectives, while enabling technology provides the means to implement core technology. Core technologies provide potential entry to a variety of markets, contribute to a perceived significant benefit to the customer in terms of end products and are difficult for customers to imitate. Enabling technology is associated with infrastructure and assists the core tech-nology in doing what it does best.
The CRE RoleCRE’s role in helping the organiza-tion foster innovation goes beyond just delivering a physical environment. At Symantec Corporation, CRE views real estate not as an end-all solution to the innovation issue, but as an enabling body that is part of an overall company’s foundation. While its main role is the delivery and ongoing maintenance of the workplace, it is criti-cal that CRE be able to see the entire picture of what’s needed for companies to innovate successfully. At Symantec, CRE has taken clear steps to not underestimate the role that company manage-ment, culture and the overall mindset of employees play in this process. In delivering work environments for business units across the organization, Symantec’s strategic approach is rooted in five key considerations.
1. Understand for what CRE is solving. Knowing the cor-porate and business objectives of proposed changes in the work environment and having a shared vision are the first steps in implementing a successful strategy. Without these, it is nearly impossible to deliver the effective workplace solution. Some organizations have clear and specific goals of reducing cost, while others have goals centered on effective and efficient workplace environments. Communicating with the organization, asking the right questions and understanding what CRE is being asked to do are the first steps in running any change management process.
2. Establish trust between CRE and business units. For com-panies that do not have an inherent culture of change leadership and innovation, change can be difficult. CRE, as the manager of change in the physical environment, must take a leadership role in educating business units on the change process and maintain a positive outlook on the end result. Any change must communicate the shared vision to employees and outline its benefits. Business units will be more likely to understand and embrace change with a positive mindset if CRE is a trusted business partner, and CRE can earn this status through open communication, inclusion, edu-cation and willingness to accept criticism and feedback.
3. Lead by example. CRE departments charged with foster-ing innovation in the workplace must themselves be innova-tive. Showing the company how a new workplace environment works by trying it themselves, along with promoting an organi-zational culture that encourages risk, is critical. If the company
sees the successful implementation of an innovation strategy within CRE, it will go a long way toward the suc-cessful implementation of one across an organization.
4. Always beta test. Many well-intended strategies have failed because of poor change leadership skills, the lack of a shared vision and the proper up-front work not being done. By conducting workshops and collect-ing employees input and beta-testing concepts prior to full implementation, CRE can address upfront any issues prior to full implementation.
5. Educate senior management. Above all, CRE’s change leadership role is to educate senior management that innovation in the work force can-
not occur without change, engaged employees, a shared vision and the full support of senior management. As previously stated, inno-vation occurs when there is a cultural environment that supports trial and error and continuous improvement and where employees are free to voice their opinions without fear of repercussion. It is critical for senior management to understand this and make the organizational changes that foster true innovation in its work force.
About the Authors
For more information on this topic, please search for this title on our Knowledge Center Online.
Enterprise Leadership: The Collaborative, Value-Adding Role of the Future
Kim Cotter Fuchs is an Account Operations Director for Cushman & Wakefield’s Corporate Occupier & Investor Services group. In addition to managing key client accounts, she is the team leader for CIS’s Global Innovation Initiative.
Rick Cleveland is the Managing Director of Research & Strategy for Cushman & Wakefield’s Corporate Occupier & Investor Services group. He advises CIS cli-ents on key trends and strategies in CRE and is respon-sible for CIS’s Global Thought Leadership Initiative.
Figure 2: Critical Factors in Achieving Innovation
Luigi Sciabarrasi is Vice President of Real Estate & Workplace for Symantec Corporation, where he is responsible for the company’s global workplace solutions.
PhysicalworkPlace
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32 the leader | January/February 2013
Organizations continue to explore new ways of improving how services are delivered to the broader enterprise. As one of the core enabling functions for many large entities, the corporate real
estate (CRE) function is no exception to this trend. Whether through organizational redesign or strategic outsourcing, CRE can make performance improvements that can add significant benefits to the bottom line.
Internal and external events often drive the need to change the way services are delivered across the enterprise. Internal drivers may include a restructured corporate operating model, M&A and divesti-ture activity or recognized CRE underperformance. External drivers may include cost-reduction pressures, industry consolidation or regu-latory requirements. Notwithstanding the drivers for change, organi-zations often consider improvements to service delivery independent of each other. For example, redesigning the organization may be viewed as just changes to reporting relationships, without addressing impacts to how work flows among people. Similarly, implementing and using new information technology is often looked at as simply a way to automate existing processes, as opposed to enabling perfor-mance measurement and potential cost savings.
This constrained approach focuses on the output without understanding the broader context for the change or the dom-ino effect one change can have on the overall CRE function. In contrast, whether pushed to action or proactively acting, a holistic approach to transforming how CRE services are deliv-
Transforming CRE Service Delivery: Unlocking Sustainable Value for the Enterprise
B Y F R A N C I S C O J . A C O B A , M C R , S L C R , G R I F F I N J A M E S , M A R K K L E N D E R A N D L I L Y M I S K I M M I N
ered can have a much broader impact and greater sustainable value for the enterprise.
How then should CRE approach transformation of its service delivery model? This article outlines seven key considerations for improving the efficiency and effectiveness of CRE by taking this holistic approach to transforming how CRE services are delivered.
1. Start with a Holistic Methodology A methodology provides a roadmap for the transformation from start to finish. Our experience indicates that while individual improvement projects can achieve targeted results, initiatives that consider a transformation’s beginning, middle and end, in addition to all elements of the service delivery model, are more likely to achieve sustainable increases in value contribution to the enterprise. An effective methodology is comprised of three phases – assess, design and implement – as shown in Figure 1.
Applying a holistic approach creates a framework for the change efforts around which activities and people can be aligned. The approach can be applied for major transforma-tions or as a structure for making incremental adjustments in context of the overall service delivery model.
2. Understand the Existing Service Delivery Model The service delivery model is defined as the overall construct that provides real estate, facilities and workplace services to internal customers. This includes the following elements:
January/February 2013 | the leader 33
• Organizational structure• Sourcing/outsourcing model• Business processes• Information technology platform• Performance managementTo properly rethink these elements, it is important to understand
the way things are done today. This can enable effective evaluation against internal and external benchmarks and leading practices to identify strengths, gaps and opportunities for the future state.
Joe Barile, SVP of Global Real Estate and Client Services at AIG, said his organization spent the first 60-90 days focused on the development of an extensive portfolio, cost, resource, technology and external contract baseline before launching the redesign and restructuring activities.
“You need to evaluate the as-is condition as quickly as pos-sible,” he said. “By establishing an understanding of the current state, we were better able to prioritize our initiatives and deter-mine where we should invest in the near term.”
3. Establish a Future State Vision and Strategy for CRE An effective transformation is guided by an overarching vision and strategy, considering all aspects of the service delivery model. The vision and strategy should address:• Strategic direction for CRE • Services to be delivered and the preferred delivery approach• Level of CRE maturity• Alignment of CRE to the broader enterprise• Overall corporate culture, structure and decision-making approach
Doug Beebe, Corporate Manager of Administrative Services for Toyota Motor Sales U.S.A., commented on his real estate and facilities (RE&F) organization’s recent reengineering efforts, “…every transformation needs to start with creating a vision and then communicating in such a way that not only is
the leadership bought into it, but everybody that is going to participate in the journey is bought into it. This level of engage-ment in the early days of the initiative significantly enhanced RE&F’s ability to effect change during the transformation for any time along the journey – if anyone questioned something, then we could go back to the vision and strategy.”
Chris Staal, VP and Global Head of Real Estate & Workplace Services for Thomson Reuters, focused on aligning the vision and strategy for CRE with the business strategy for the broader enterprise. As part of this effort to align with the business, the new CRE organization adopted a flexible resourcing model to “be able to deliver effectively and efficiently right out of the gate.” This model leveraged a strategic mix of internal and external resources.
By engaging specific stakeholders in the visioning process, concerns can be addressed up front and a shared vision of the future developed, thereby increasing sponsorship for the trans-formation and kick-starting change management efforts.
4. Consider Interconnections and Broader ImplicationsThe overall service delivery model should be considered in
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FIGURE 1: CRE Service Delivery Transformation Methodology
Assess
1. Develop the Baseline2. Create a Shared Vision3. Define Future Service Delivery Model4. Develop Strategy and Business Case
Conduct gap analysis Develop and prioritize
opportunities Conduct cost/benefit analysis Develop preliminary road map Determine communications
strategy
1. Develop a Framework2. Build the Team and Establish
Transition Management Office3. Initiate Change Enablement4. Design Future State
Operating model and organization Outsourcing model Processes Information technology Performance management
5. Prepare for Implementation Assess change readiness Develop training and training plan Develop implementation plan
1. Implement Communications andChange Management Plans
2. Conduct Knowledge Transfer3. Manage Organizational Transition4. Implement Future State Service
Delivery Model5. Track Performance Against Original
Business Case6. Establish a Continuous Improvement
Program
Design Implement
TransformationMethodology
Is it Time for Transformation?Are you experiencing one or more of
these symptoms?
• Service delivery challenges (i.e., quality,
timeliness, customer satisfaction)
• Inefficient processes
• Difficulty retaining CRE expertise
• Governance challenges
• High cost-to-serve
• Stakeholder alignment issues
Need a Kick-Start?If you are considering transforming your
service delivery model but are not sure how
to kick-off the effort, seek compelling oppor-
tunities and catalysts for a broader change.
Toyota Motor Sales leveraged the re-
tendering of their service provider contracts
to jump start their change and aligned a
broader transformation with the restructuring
of their service provider relationship.
Figure 1: A Time-tested Transformation Methodology
Source: Deloitte
34 the leader | January/February 2013
developing the future state. This enables understanding how the elements interact with each other. As illustrated in Figure 2, a change in each element has corresponding impacts on other elements of the service delivery model. A holistic approach can identify interconnections early and incorporate them in the future state design.
Barile understood the need to consider all parts of the service delivery model in his CRE transformation, but he was challenged by the high degree of organiza-tional uncertainty that accompanied AIG’s major restructuring, following the turmoil in financial services. Rather than exclud-ing elements that lacked clarity at the time, AIG developed a transformation program that emphasized flexibility, anticipat-ing the need to evolve with the broader organization, whether from an organizational, process or technology perspective.
“You need to have your transformation model in mind but be willing to make adjustments along the way,” he noted.
If parts of the service delivery model are not addressed, there is a high likelihood challenges will emerge in implementation. We have seen organizations delay or not address process redesign while implementing a redesigned organizational model because of time constraints. This often results in the newly redesigned organization reverting back to the previous ways of delivering services, which are not aligned with the new service delivery model. Even if specific elements cannot be addressed in the near term, a holistic approach can be used to develop a roadmap out-lining when each component will be transformed.
5. Get the Right People InvolvedTransformation requires significant and lasting commitment on the part of leadership and the organization. Having the right
team in place is critical to achieving sustainable results. This starts with leadership, both within CRE and from the entity into which the CRE organization reports. A leading practice for ser-vice delivery transformation is to establish a steering committee comprised of customers and leaders of other enabling functions that can set priorities, advise on achieving the vision and bring a broader perspective.
One of the important drivers behind the CRE transformation at Thomson
Reuters was the acquisition of the Thomson Corporation. Staal established that the best way to effectively drive significant change in an organized manner, while concurrently address-ing the challenges of integrating Reuters, would be to deploy a CRE integration steering committee. This committee provided guidance and governance for the CRE-related initiatives, was led by CRE and included representatives from finance, HR, IT, legal and physical security.
“We also included senior stakeholders from our real estate service provider and our CRE management consultant on the committee to make sure all key perspectives were at the table,” he noted.
If changes will be made to leadership in the CRE orga-nization, it is important to do this as early as possible in the process so that the new leaders are able to see themselves as “owners” in the transformation. Organizations should also identify a program manager to coordinate and manage the transformation. This critically positioned individual should drive day-to-day activities, manage risk, be part of the work-ing team and lead a transition management office (TMO).
6. Leverage a TMO to Help Realize Desired BenefitsA carefully coordinated transformation is critical to realizing the value expected from the new CRE service delivery model. A TMO integrates the many activities needed to transition the aspects of CRE, with a focus on quality and results man-agement. The TMO, established in the design phase, provides a foundation on which CRE can build the future strategy. The TMO addresses three key needs:
• Program Management. In addition to managing the budget and schedule, the TMO continually aligns transformation initiatives with the future state vision and strategy. Leveraging the roadmap developed during the assess phase, the TMO guides the planning of transformation activities and the measurement of results.
• Communications and Change Management. Strong change management and communication strategies tailored to the organization’s culture should be established. This will encourage a sense of ownership among stakeholders and bring them along as part of the transformation journey.
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FIGURE 2: Standard TMO Components
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FIGURE 2: CRE Service Delivery Transformation Interdependencies
Information Technology
Organizational Structure
Sourcing/Outsourcing
ProcessSourcing/OutsourcingPerformance Management
Organizational StructureProcessPerformance Management
ProcessOrganizational StructureSourcing/OutsourcingPerformance Management
A transformation here … … can have an impact here
Figure 2: Examples of Transformation Interconnections
Figure 3: Transition Management Office Components
• Risk and Issue Management. Throughout the transfor-mation, significant risks and issues will emerge. The TMO proactively identifies risk; develops risk mitigation plans where needed; and identifies, prioritizes and tracks issues affecting the transformation.
Communications and change management are often deprioritized by companies but are important for an effec-tive transformation. A critical part of Toyota RE&F’s change management approach was to engage their associates in the design of the future state strategy.
“Everybody was involved from the beginning. This helped from a buy-in perspective because people had context,” said Myra Chung, National Manager of RE&F for Toyota Motor Sales. “Open communication across the leadership team was necessary to ensure they were all on the same page and commu-nicating the same information to the organization.”
Many organizations underestimate the time commitment, resources and experience needed to bring about transformation. The TMO puts in place the structure, leadership and governance to sus-tain an effective transformation and achieve the envisioned results. Figure 3 highlights the standard components of a typical TMO.
7. Prepare for ImplementationPlanning for implementation begins during the transforma-tion’s design phase. This includes assessing the change readi-ness of the CRE function, developing training materials and plans and creating an implementation plan. Transformation activities need to be appropriately scoped and prioritized. Prioritization involves identifying interdependencies and establishing a logical sequencing of initiatives that sets an appropriate pace of change for the organization. Many of the challenges organizations experience during implementation are because of planning pitfalls. Common pitfalls include:
• Getting a late start in planning and preparing for imple-mentation activities, resulting in a delay in transformation over-all and a loss of momentum
• Not leveraging work that may already be underway or com-pleted, under the auspices of other CRE or company initiatives. This oversight can result in unintended overlaps and potential conflicts in priorities, resources and timing.
• Accelerating the design phase and short-cutting implemen-tation planning to demonstrate action and earn quick wins. In doing so, key elements can be missed, resourcing short-changed and interdependencies unanticipated.
Preparing for implementation should be embedded into the design of the future state. AIG and Thomson Reuters were undergoing significant enterprise-level restructuring concur-rent to transforming their CRE service delivery models. To effectively prepare for implementation, both strategically included representatives from legacy organizations in the new organization design.
“As a new, yet unproven center-led function, you only have one chance to make a first impression,” said Staal. “Over time, we adjusted our resource mix to optimize service delivery, but for day 1 we made sure we had all hands on deck.”
Our experience indicates that effective and sustainable ser-
About the Authors
For more information on this topic, please search for this title on our Knowledge Center Online.
Service Delivery and Outsourcing: Strategic Alignment of the External Resource Network
Mark Klender is a Principal with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Shared Services Team.
vice delivery transformations are approached holistically, well planned and appropriately resourced. Leveraging a time-tested approach for transformation and understanding the potential pitfalls will lay the foundation for future achievement. It is important to remember that while the “official” transforma-tion has a start and target end date, it is really a journey that will continue to evolve with the CRE organization and the business over time.
Authors’ Note:We would also like to thank Joseph Barile (AIG), Douglas Beebe and Myra Chung (Toyota Motor Sales) and Christopher Staal (Thomson Reuters) for sharing their CRE transformation insights.
January/February 2013 | the leader 35
Lily Miskimmin, Manager, Strategy & Operations Practice, Deloitte Consulting LLP, is a member of the Real Estate & Location Strategy Team.
Griffin James is a Manager with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Real Estate & Location Strategy Team.
Francisco J. Acoba, MCR, SLCR, is a Senior Manager with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Real Estate & Location Strategy Team.
36 the leader | January/February 2013
Although designing sustainable environments, driv-ing down cost and integrating rapidly emerging technology have been our focus in recent years, ulti-mately we are still designing for people.
Designing sustainable environments is a good start, but sustainable practices have evolved and new guidelines have emerged. The focus today is less on checklists and more on common sense sustainability. Many clients are opting for ABC – all but certified – interiors where doing the right thing and being a good corporate citizen are more important than getting a plaque on the wall. Many clients are looking to reduce their overall square footage to not only reduce their costs, but their carbon footprint as well. And the Living Building Challenge has cast a new light on the importance of eliminating chemi-cals from the workplace. At the same time, BIFMA e3 level is evolving as the new standard for measuring the sustainability of furniture, and LEED 2012 will address a broader range of issues, including walkable sites and ergonomics.
The Rise of the Human Factor: Workplaces for Well-Being
B Y K A Y S A R G E N T , A S I D , I I D A , C I D , L E E D A P I D + C
Health and Technology Challenges in the OfficeNot that designing sustainable buildings isn’t important, but let’s face it, sitting stagnant in a chair at a desk staring at a computer all day is killing us faster than whatever any wall is off-gassing. We need to start focusing on designing for the well-being of the occupant.
People were never meant to sit for long periods of time. Until recent decades, we were a manufacturing or agricul-tural-based work force. People were active and on the move. Recent studies have shown that sitting for six to eight hours a day has the equivalent effect on your health as smoking a pack of cigarettes a day and can take up to two years off of your life span.1 A recent Gallup study showed that up to 72 percent of people are sleep-walking through the day.2 A recent study by Healthways and Gallup has shown a direct tie between one’s personal well-being and productivity.3 We need to get people moving again not only to stimulate their minds but their bodies as well.
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Today, because so many people are focused on trying to mea-sure productivity, they are forgetting the goal is ultimately to improve it. We know that healthy, happy and engaged workers are far more productive and willing to work longer hours than employees who are disengaged and suffer from presentee-ism. Finding ways to have a healthy, engaged work force is essential.
The positive impact technology has had on workplaces today has been well documented. Fewer people can produce more work in a shorter timeframe, and we have rapid access to massive amounts of information. But what is starting to become apparent is the nega-tive impact technology has had on us as well. Just because we can be accessible 24/7 doesn’t mean we want to be. And the stress of being always on with constant distractions is negatively impacting our productivity and health. The ping factor – the constant beck-oning of technology – is reducing our efficiency and productivity – not to mention our sanity. We are on the verge of a total loss of privacy and the ability to concentrate, neither of which bode well for innovation. After all, throwing people into an open space does not equate to collaboration, it often results in mindless chatter that causes some people to simply shut down. People need time and space to think, balanced with time and space to build bonds with co-workers. Bonds build trust, which leads to open collaboration, which fosters innovation. We need to get to the point where we are running technology, versus technology running us.
Along with the new ways of working, there needs to be a shift in how we design and manage our facilities to handle an increasingly mobile and flexible work force. Buildings were not designed for the varied occupancy we are now encounter-ing. Having 50 people in the space one day versus 150 the next impacts the way we man-age our facilities. Not only does it impact the mechani-cal system, it also impacts parking, hours of operation, security and overall opera-tions. With a greater number of workers in denser, open spaces – all of whom are sharing more surfaces and more germs – people will get sick more often unless we change the way we manage, clean and filtrate our facilities.
Designing for All Types of WorkCreating environments that have a balance of collaborative and concentrative areas where people can truly find the right type of space for the task at hand is key to accommodating work today. Work today is dynamic and can vary day to day and hour to hour. Creating a varied work environment through activity-based design will help engage employees, improve their well-being and increase productivity.
So how do we accommodate all the various work styles, demographic groups and generations in the workplace today? We give people choices. Activity-based design is being intro-duced as the new style of work. No longer are people expected to go to the office and sit in one spot all day like potted plants. After all, the most flexible thing in any environment isn’t the
walls or the furniture – it’s the people. One size misfits all, and there is no one perfect workplace. The key is giving people choices and spaces that stimulate their minds, bodies and imag-inations. Our challenge is finding each company’s DNA, and demographics, work styles, regional influences, organizational
structure and culture all factor into the DNA equation.
Our aging inventory of buildings will need to be retrofitted to accommodate new work patterns. Reusing existing buildings to accom-modate varied occupancies and uses will be essential to accommodating the emerg-
ing work force and re-energizing our people and our com-munities. Recycling and reusing buildings will mean we need to make alterations to accommodate a wider variety of needs and uses in facilities that were originally designed for a sole use. Our buildings need to accommodate the multiple-faceted aspects of how we work today as well.
If you follow the concept that history repeats itself and is cyclical, we are in the age of crisis. If the archetype cycle holds true, the Age of the Hero will follow. The Millennials (yes, the Millennials everyone has been berating) are poised to take us into the new cycle as the heroes. Their high expectations, strong desire to participate and make a difference, and yearn-ing for social action set them up ideally for the task. And per the archetypes cycle – the generation to follow the Millennials – whom I’ll refer to as the Digital Natives, are posed to be the Age of the Artist. They are the ones who could fulfill the bal-ance between high tech and high touch that we are beginning to see emerge with the organic and hand-crafted movements.
Figure 1: The Pendulum Effect, Generational Archetypes & Archetype Ages
Source: William Strauss and Neil Howe Research
We need to get to the point where we are running technology, versus
technology running us.
38 the leader | January/February 2013
They are the generation that could bring the rise of the human factor to fruition.
I’ll also argue that to truly move forward, we need to abandon the notion of change management. Change is inevitable today; we don’t need to try and control or manage it, we need to har-ness it. In our new reality, change is part of everyday life; we need to help our clients move in a positive direction through forward facilitation. Helping our clients embrace emerging work patterns and preferences to truly empower and engage their employees will unlock their true potential.
Yes cost is still a factor, but we need to balance it with the value of design and empowerment. And we can’t lose our focus on designing sustainable environments, but we can ensure that we value our own personal sustainability and well-being as well. Technology will continue to rapidly evolve in ways we can’t even imagine, but we can get the impact it has on us in check. We need to design spaces that support the way we work today and empower us through employee engagement. The most valuable resource we have is our people, and we cannot forget that. The spaces we are designing are meant to support us, not the other way around. Today, the new focus should be on the rise of the human factor.
Editor’s Note: CoreNet Global advocates the quality of working environments and work experiences as socially responsible corporate practices. For more information, please visit www.corenetglobal.org.
Sources:1http://www.diygenius.com/your-desk-job-is-killing-you-the-truth-about-sitting-down-infographic/. 2http://www.thesocialworkplace.com/2011/11/18/you-asked-i-answered-a-social-workplace-starts-with-culture-and-engage-ment/. 3Healthways Well-Being Assessment Results, 2010.
About the Author
For more information on this topic, please search for this title on our Knowledge Center Online.
Workplace: Shifting Work Styles Are Creating Shifts in Where We Work
The Consumer-Led Workplace: Lessons from Facebook’s Vending Machines
Kay Sargent, ASID, IIDA, CID, LEED AP® ID+C, is Vice President Architecture, Design and Workplace Strategies for TEKNION. She has more than 26 years of experience as a practic-ing design professional and is an active member of CoreNet Global, CREW and IFMA. She also lectures regularly, teaches at the university level and
has authored several articles and white papers.
Figure 2: Missing Hero Archetype during American Civil War and possible repeat had The World Trade Center succumbed to the original terrorist plot in 1993
Source: William Strauss and Neil Howe Research
Figure 3: Demographics of the Future Workforce (Birth-Year Ranges)
Source: William Strauss and Neil Howe Research
Recent studies have shown that sitting for six to eight hours a day has the equivalent effect on your health as smoking a pack of cigarettes
a day and can take up to two years off of your life span.
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Sustainable Leadership Award, Economic Development Leadership Award and the Industry Excellence Award – begins now and ends 15 February 2013.
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Microsoft’s corporate offices in Paris
40 the leader | January/February 2013
In charge of managing Microsoft’s port-folio in Europe, Middle East and Africa in 69 countries, with 214 sites and 5.1 million square feet (473,806 square meters), Susan Wagner, who has been with the company for 14 years, is a busy person. As Senior Director of Real Estate and Facilities EMEA, Wagner – along with her 40-per-son corporate real estate (CRE) team – is in charge of 15 percent of the Microsoft’s global portfolio. She and the rest of the CRE team are in charge of client relation-ship management and business alignment, portfolio management and long-range planning, service provider management and financial accountability.
end user proFile B Y C H E L S I E B U T L E R
Working at MicrosoftAccording to Wagner, the working environment at Microsoft is intellectu-ally challenging, and the culture keeps one always looking forward as well as feeling like a part of an organization that makes an impact on the employees, culture and business.
“The environment is energizing, and I can truly say it has given me a number of opportunities to make some great impact as part of the teams on which I’ve served,” she said.
Microsoft’s corporate culture is one of innovation, collaboration and a strong drive for excellence. Its main business
drivers are its clients and consumers, as well as the business drivers focused on expanding the company’s breadth of software, services and devices, both at a more enhanced view of the consumer level and at the enterprise level.
“As far as what’s influencing our real estate strategy today, as with any com-pany, we have to prioritize our invest-ments and our costs with our global priorities,” said Wagner.
Improving Service DeliveryAt Microsoft, external service providers are typically involved in the execution of facilities management, capital projects and real estate transactions. Last October, the company rolled out its Integrator Model, which is a global initiative to evolve the previous CRE Vendor Model and provide a more effective service deliv-ery function – one that is more strategic
Microsoft EMEA’s Innovation Leader: Susan Wagner
end user profile
January/february 2013 | the leader 41
in supporting Microsoft’s clients’ business goals and provides greater value both globally and locally.
“This model will provide more consis-tent and improved delivery, and improved communications will allow our CRE team to spend more time on strategy and planning,” said Wagner. “It will put in place a global program management ven-dor that will be responsible for coordina-tion and integration of underlying service providers. Ultimately, the result will be a more strategic alignment of the portfolio with the needs of the business.”
Workplace and SustainabilityMicrosoft’s CRE team has developed a function-based workplace that delivers workplace solutions to its employees based on the type of work they are doing and the kind of spaces they need. There is a range of collaborative spaces and focused spaces – what Wagner deems a “no-one-size-fits-all workplace.” The team issues an internal customer satisfaction survey annually designed to provide feedback on how the team is doing in a number of categories.
“Employee experience and productiv-ity are key contributors to our workplace design,” she said.
Although Microsoft’s CRE team is not the sole owner of the company’s sustain-ability initiatives, it plays a key stake-holder role as part of the global team.
“We’re looking at areas related to energy and carbon savings,” said Wagner. “There are different levels of impact we can have, but we are imple-menting the basics of recycling, moving to composting where we can, chang-ing out our lighting for more efficient fixtures – all things that work toward our sustainability goals in reducing Microsoft’s carbon footprint.”
A Look AheadFor her team, Wagner says there will be much further development to link and collaborate with other teams that have an impact on CRE and vice versa, such as information technology and human
resources. As far as CRE in general, she believes that as the impact of mobility and virtual engagement become more enhanced, there will be some major shifts in workplace design and the impact on various work forces in the next three to 10 years.
“We’re going to see major shifts as a result of the overall connectedness people have,” she added. “Our virtual engage-ment is much more enabled by technol-ogy changing the ways people work and interact to meet their business require-ments and innovation to move forward.”
Link to CoreNet GlobalWagner has been actively involved with the organization for several years and is planning to achieve her MCR certification this year. As a Paris resident for the last two years, she has been part of CoreNet Global’s France Networking Group, which offers an opportunity for CRE profession-als in that area to learn, develop networks and share knowledge. Wagner served on the Program Review Committee for the Paris Summit in 2011, and she gave a pre-sentation on Microsoft’s Global Integrator Model at the London Summit last fall.
Susan Wagner
“The environment is energizing, and I can truly say it has given me a number of opportunities to make some great impact as part of the teams on which I’ve served.”
Beijing New China International Exhibition Center
42 the leader | January/February 2013
Yaomin Xue started his career with tvsdesign in 1999 as the Asia-Pacific Manager based in Atlanta, where he began to spearhead the firm’s migration into the China market and to provide more effective communication and effi-cient service with the firm’s clients in the Asia market. After much traveling from Atlanta to various cities in China, meet-ing with clients and partners, he moved back to China two years ago and is now the firm’s Asia Pacific Director.
As architecture has always been Xue’s dream, he very much enjoys his career.
Yaomin Xue: tvsdesign’s asia Pacific Manager – aKa liaison extraordinaire
SERVICE PROVIDER proFile B Y C H E L S I E B U T L E R
In his current director role, he explores prospects, obtains projects and negotiates contracts, but he also participates in the early stages of design to help the team fully understand the clients’ requirements and direction – particularly from a local perspec-tive – and then serves as the liaison between the tvsdesign team and the Chinese local design institutes (LDIs) during the project’s entirety. These LDIs typically focus on the projects’ engineering aspects, including structural/MEP services during the design development and construction phases. Both parties work closely together throughout
all phases of the project. Xue also travels all over China on a regular basis meeting with prospective clients or attending opening ceremonies on completed projects. In addi-tion, he prepares the firm’s yearly China business development plan and budget.
According to Xue, important aspects of his job include understanding the local culture and needs and delivering the appropriate services to meet those needs, which he says can be challenging, particularly in the first few years.
“Another challenge for my team is delivering services on time in such a rap-idly growing country,” he said. “Schedules can be very demanding and hard to meet, and we need to stay flexible.”
As far as the future, Xue feels that the work force in China will be more edu-cated, more transparent and more global (see cover story on page 12).
SERVICE PROVIDER profile
January/february 2013 | the leader 43
Sustainability and Workplace TrendsThe firm’s approach provides top-quality design across all markets, with a balance of function and aesthetics. Xue said he was impressed with the firm because of its broad project portfolio, which encom-passes retail, hotel, convention center, office and mixed-use projects, and in the last decade, tvsdesign has become truly global, with offices and projects in the Americas, EMEA and Asia Pacific. Soon after the firm began its China initiative, it won several major commissions, includ-ing the Dalian Monumental Tower and master plan in 2009, the mixed-use Suzhou Modern Plaza in 2010 and the Tianjin Meijiang Convention Center and Galaxy Mall in Tianjin. In 2011, tvsdesign was awarded the design of the Ningxia International Convention Center, home to the China-Arabic States Economic Forum, expected to open in 2015.
The firm has been paying close atten-tion to the sustainability aspects of its projects for more than 10 years, and more than 50 percent of its designers have obtained LEED accreditation.
“Here in China, just like everywhere else, sustainability and energy savings are always considerations in our proj-
ects,” said Xue, “and we use local mate-rials and energy-saving solutions as the foundation of our designs.”
For example, the Beijing New China International Exhibition Center (left),
which was completed in 2005, features natural lighting in the exhibition halls, which eliminates the need for artificial light during routine maintenance and booth set up during daytime hours. A flat roof was included in the project for
the future installation of solar panels, low-energy glass was used for the curtain walls, and recycled water is used in the property’s landscaping.
As far as the corporate office building
workplace is concerned in China, employees tend to appreciate naturally lit, open work-spaces with flexible layouts that reflect their local culture. Responding to local culture to some extent, but also to emerging interna-tional standards, the floor plates are smaller, daylight is highly prized, and flexible layouts are a priority. The core-to-window depth of the floor plate is shallower than a typi-cal U.S. domestic floor plate – usually nine meters – allowing for more energy-efficient lighting solutions. Responding to the need for flexible workplace designs, raised floors are being used more frequently. Similar to the U.S., the office buildings are designed around the needs of a corporate anchor tenant while accommodating leasehold improvements for multiple tenants.
Connection with CoreNet GlobalXue became a member of the organization in 2002 and has attended many Atlanta-based events. He also attended the first Summit in Shanghai in 2004, as well as the Singapore Summit in 2007, and plans to attend the Shanghai Summit in March.
Yaomin Xue
“Another challenge for my team isdelivering services on time in such a rapidly
growing country. Schedulescan be very demanding and hard to meet,
and we need to stay flexible.”
44 the leader | January/February 2013
EDCUtah is a 25-year-old private non-profit whose aim is to attract business to the state of Utah. Run on a membership model and founded by utilities and two major banks, EDCUtah’s membership consists of a diverse group of companies – from banks and construction companies to furniture manufacturers. About 60 of its 260 strong members are cities and coun-ties throughout Utah. Seven years ago, the organization was restructured into an alli-ance with the state, with the state becom-ing a direct contributor to the budget.
Uniquely Utah“What really sets us apart is our ability to combine project management and rela-tionship management and bring together the state and the various cities, as well as
Utah: Where Collaboration, Innovation, talent and Stability Come together
economic developer proFile B Y S O N A L I T A R E
the private sector,” said Todd Brightwell, Vice President of Business Development for EDCUtah. “Our research department aids in companies being able to carry out their due diligence. All of this culminates in us being able to bring quality jobs and capital investment to the state.”
The alliance with the state and the state being part of the Governor’s office – rather than an agency – has allowed Utah to put resources into the economic development process. With the empha-sis on industry development and eco-nomic stability, which has allowed them to weather the ups and downs of the economy fairly well, Utah has been able to attract the following companies:
• Adobe, which brought in 1,000 jobs and $100 million in CAPEX
• Procter and Gamble, which brought in 1,000 manufacturing jobs and $540 million in CAPEX
• Goldman Sachs, which brought in 350 jobs and $20 million in CAPEX
Carving out a NicheUtah has also been able to appeal to cer-tain niche industries like aerospace, and top aerospace manufacturers have been flocking to the state. Companies such as ATK, Boeing and Northrup Grumman all have a presence here.
When asked, what it was about Utah that attracts these high-end manu-facturers, Brightwell said, “The talent here has proven to be very competitive, both the engineering and manufac-turing talent are of very high quality. Additionally, Utah is also home to top-notch advanced composites manu-facturers such as Hexcel. As such, we are able to offer a unique environment, which is attractive to the aerospace industry from both a supply chain and direct manufacturing and development standpoint.”
Salt Lake City, Utah
economic developer profile
January/february 2013 | the leader 45
Building on StabilityAnother factor for many companies moving to Utah and more importantly, staying in Utah, has been that the state has emerged relatively unscathed through the economic down-turn. The lure of a compara-tively lower-cost real estate market has in the past drawn companies like Amer Sports. Amer Sports, which is the parent company of brands such as Wilson Sporting Goods and Salomon Skis, was looking for a site to consolidate their North American outdoor products division. They chose Utah and have been very happy with that decision. Locating in a lower-cost market allowed them to weather the downturn much more effectively.
“Having Amer Sports here was also a tipping point in terms of attracting other large outdoor product companies,” added Brightwell.
Attracting the BestWhile the Utah real estate market is relatively lower in cost, as a result of not having over-built, the market is still very competitive. This is a key factor in attract-ing business. Another key factor is the quality and availability of talent. Utah’s colleges and universities have more than 190,000 students enrolled, and the cur-riculum is geared toward giving students the best mix of education.
Language skills are another attrac-tion. With more than 180 languages spoken fluently at the universities and 33 percent of the population speak-ing more than one language statewide, companies with language needs have found what they need here.
“Goldman Sachs needed Portuguese speakers for a project in South America,” said Brightwell, “and they were able to find 25 Portuguese speakers in their Salt Lake City office, almost thrice as many as compared to other offices.”
Growing and EvolvingAll these factors have combined to make Utah a uniquely attractive market, and by the fiscal year ending June 2012, EDCUtah had its greatest single year in
terms of attracting jobs and capital invest-ments. To continue to compete competi-tively with larger markets, the organization aims to continue evolving and excelling at what it does best. Its level of attention to detail is something it prides itself on, as is the ability to bring about collaboration and cooperation among the various players.
Continuing to nurture alliances, rela-tionships and partnerships is something that, according to Brightwell, will allow the organization to grow and evolve. Being
business friendly, building on incentives and keeping bureaucracy at a minimum also helps facilitate additional business. Cultivating labor is imperative. With an average age of 29 and 20 percent of the
population in school, the current and future talent and market for investors is secure here.
Going Local with CoreNet GlobalBrighwell’s association with CoreNet Global is more than six years old, and he has attended multiple summits. At past summits EDCUtah has also had a booth – by themselves and also with other Mountain States, such as Idaho
and Wyoming. According to Brightwell, CoreNet Global is an important avenue for EDCUtah; to get up-to-date educa-tion as well as connecting with corporate real estate professionals.
Brightwell is on the board of the Salt Lake City Chapter, which also aims to extend to parts of Idaho and Nevada. The chapter has been able to attract a substan-tial number of economic developers and service providers; they hope to also make headway into the end user sector.
Todd Brightwell
With an average age of 29 and 20 percent of the population
in school, the current and future talent and market for
investors is secure here.
46 the leader | January/February 2013
In a global economic arena where many of the major players are trying to avoid slipping back into recession, Canada’s economy continues to grow, albeit at a mod-est pace compared with expansions of years past. The
country’s stature as an oasis of stability in a world of economic turmoil is particularly apparent when comparing its commercial real estate marketplace with that of its neighbor to the south.
“Canada’s overall economic well-being and stable commercial real estate market fundamentals, characterized by low to mid, single-digit vacancy rates, along with historically low interest rates, are driving the flow of capital across most regions and asset classes – something that we have not seen to the same degree in the U.S.,” according to a statement by Mark E. Rose, chair and CEO of Avison Young, the Toronto-based commer-cial real estate services provider.
In its “Fall 2012 Canada, U.S. Commercial Real Estate Investment Review,” Avison Young reported that commercial real estate investment has rebounded strongly from the depths of 2009.
Canada: A Diverse Economy on the Upswing
At the market’s peak in 2007, approximately $24 billion (CAD) worth of office, industrial, retail, multi-residential and land changed hands in transactions valued at $1 million and more. With the onset of the recession in 2008, asset sales dropped to $20 billion, bottoming out in 2009 at $12 billion. Since then, according to Avison Young, “Buyers have come off the sidelines, deploying $18 billion in 2010 and $21 billion in 2011.”
Rocky View County: Western Canada’s Distribution CenterLocated in the province of Alberta in the Calgary region, Rocky View County has seen significant investment activity on the part of new businesses during the past two years.
Major projects include construction of the 1.2 million-sq.-ft. (111,484-sq.-m.) CrossIron Mills regional shopping center, an $800-million investment; a 400,000-sq.-ft. (37,161-sq.-m.) Walmart Food Distribution Centre ($115 million); the CN
Special intErEst FEAtUrE B Y M A R T I n S I n D E R M A n
Montreal, Canada
Looking to relocate or expand your operation?Consider Balzac – home of the new CrossIron Mills shopping centre, and one of the province’s most dynamic areas of commercial and industrial development.
Minutes from the City of Calgary, Balzac offers the perfect environment for a thriving enterprise of any size: direct access to the Queen Elizabeth II Highway and Calgary Ring-Road; close proximity to the Calgary International Airport; a readily available talent pool and an expansive consumer base; and no business tax.
Cultivate your company’s success in Balzac. Reap the rewards of relocating to Rocky View County.
www.thinkingalberta.com
Sowing the Seeds of Success
January/February 2013 | the leader 49
special interest Feature - Canada: a diverse eConomy on the upswing
Logistics Centre at Conrich ($300 million) and most recently, the attraction of a large U.S retailer (whose name was undisclosed as of press time) who will be building its Western Canada warehousing complex of 1.5 million square feet (139,355 square meters).
This new investment will augment what is already a vibrant Calgary regional economy, according to Rocky View County Economic Development Manager David Kalinchuk.
With an area population of approximately 1.3 million people, many of them are young, many white-collar professional jobs with higher-than-average incomes and levels of overall affluence.
“Rocky View benefits from a diverse labor force pool in the city of Calgary and surrounding communities,” said Kalinchuk.
The recent investments by CN Rail, Walmart Canada and other major U.S. retailers demonstrate and reinforce the role of Rocky View and the Calgary Region as the center of warehousing and distribu-tion for western Canada, according to Kalinchuk. Meanwhile, Alberta’s abun-dance of oil-sand and shale gas reserves plays a signifi-cant role in making Canada the world’s largest exporter of oil and gas to the U.S. And on the infrastructure front, Calgary International Airport is Canada’s third-largest airport, with expan-sion on tap to accommodate major growth and increased passenger and cargo volumes.
Meanwhile, in the field of sustainability technology, Kalinchuk said there has been significant interest in large-scale commercial compost-
ing in the Balzac area, as well as greenhouse developments that would make use of CO2, waste heat (from adjacent power plants) and nutrient-rich compost products.
His organization is also working with local water engineers and the Dutch Consulate in exploring Dutch technology that will con-vert much of the areas “grey water” (i.e., wastewater from domestic activities such as laundry, dishwashing and bathing) into potable water that could be used in a range of value-added agri-food pro-cesses, including chicken and turkey processing.
Saskatchewan: Record New InvestmentNew capital investment in Saskatchewan is expected to reach a record $20.2 billion in 2012, according to the Hon. Bill Boyd, Minister of the Economy for this province.
“During 2012, there have been numerous business expansions and new invest-ments in Saskatchewan – all of which demonstrate the com-petitive business environment and vibrant economy that exists in the province,” he said.
New investments announced during the past year are led by Hitachi, which is centralizing its operations in Canada, inte-grating its Hitachi Canada and Hitachi Canadian Industries units and establishing Hitachi Power Systems Canada to be based in Saskatoon.
As Canada’s second-largest oil-producing province, its third-largest natural gas pro-duction province, a provider of one-third of Canada’s pri-mary energy production and
The recent investments by CN Rail, Walmart Canada and other major U.S. retailers demonstrate and reinforce the role of Rocky View and the Calgary Region as the center of warehousing and
distribution for western Canada.
Located on the coast of Lake Erie, Norfolk County offers easy access to markets, a skilled workforce, a lower cost of doing business and the perfect work/life balance.
Food production is our specialty. We grow more sweet corn, strawberries, peppers, pumpkins, asparagus and ginseng than anywhere else in Canada.
Get connected to Norfolk County
1-800-699-9038 | norfolkbusiness.ca
50 the leader | January/February 2013
special interest Feature - Canada: a diverse eConomy on the upswing
one of the world’s leading mining centers, Saskatchewan has also seen a number of new investments based on its abundant natural resources. capacity of urea and related fertilizer products (currently 1.1 million tons annually) by 2016 at a projected cost in excess of $1.5 billion. Meanwhile, Hitachi has announced that it is centralizing its operations in Canada, integrating its Hitachi Canada and Hitachi Canadian Industries units and establishing Hitachi Power Systems Canada, to be based in Saskatoon.
As Canada’s second-largest oil-producing province, its third-largest natural gas production province, a provider of one-third
of Canada’s primary energy production and one of the world’s leading mining centers, Saskatchewan has also seen a number of new investments based on its abundant natural resources.
Boyd reported that SaskPower recently announced it was partner-ing with Hitachi to construct a $60-million Carbon Capture Test Facility (CCTF) at SaskPower’s Shand Power Station in southeast-ern Saskatchewan. The CCTF will allow international developers to fully evaluate the performance of their systems to capture carbon dioxide emissions from coal-fired thermal power plants. The facility is scheduled to be operational in the summer of 2014.
Meanwhile, Saskatchewan’s potash mining companies are plan-ning to invest up to $13.9 billion on expanding existing operations, a move that will nearly double the province’s potash production capacity by 2020. Also, German based K+S Potash Canada has decided to invest $4 billion to build the Legacy Solution Mine, the first new potash mine in Saskatchewan in more than 40 years. Additionally, according to Boyd, several other international com-
As Canada’s second-largest oil-producing province, its third third-largest natural gas production province, a provider of one-third
of Canada’s primary energy production and one of the world’s leading mining centers, Saskatchewan has also seen a number of
new investments based on its abundant natural resources.
Quebec, Canada
An illustration of Ontario’s Garden in Norfolk County
special interest feature - Canada: a diverse eConomy on the upswing
January/february 2013 | the leader 51
panies, including global mining giants BHP Billiton and Rio Tinto, continue to advance greenfield potash projects.
“Our government has worked to create a stable economic environment supportive of business and commerce,” said Boyd. “The province is a low-cost and competitive jurisdiction, and Saskatchewan offers excellent infrastructure with ongoing govern-ment reinvestment.”
Montreal: Flying Higher in 2013Avison Young reported that first-half 2012 commercial real estate investment dollar vol-ume in the Montreal market was down more than 50 percent com-pared with the previous year’s Jan.-June total. That said, there are apparently a significant number of transactions in the pipeline for 2013, as transaction volume spiked at midyear 2012 with large office, indus-trial and multi-family sales leading the way.
And following a rela-tively lackluster 2012, there’s renewed eco-nomic growth on tap for the province of Quebec as a whole next year. According to the Sept. 12 “Provincial Outlook” from Royal Bank of Canada (RBC), Quebec should see growth in real GDP return to its 10-year average of 1.7 percent by 2013. According to RBC, “Improving prospects for Quebec exports to the U.S. market and continued strong capital investment in the province (particularly in its resource sector) will be key drivers of this acceleration.”
Meanwhile, a well-established aerospace industry, with its atten-dant secondary services and supply companies, is a major anchor of the Montreal economy, accounting for some 40,000 jobs and
$1.1 billion in sales annually. Many of the area’s businesses in this sector are located within two industrial parks at the two airports, Montreal-Trudeau and Montreal-Mirabel.
Both the parks and the airports are managed by Aeroports de Montreal, the local airport authority responsible for the man-
agement operation and development of Montreal–Trudeau and all-cargo Montreal–Mirabel. A total of 10.7 million passengers made their way through Montreal–Trudeau during the first nine months of 2012, up 0.8 percent over the same period of 2011.
NorfolkNorfolk County is a rural municipality located in southwest-ern Ontario on Lake Erie. Once a center for tobacco farming, the county is now home to a flourishing agricultural base, earning the name “Ontario’s Garden” (see illustration on page 50).
While the agricul-tural industry continues to be a driving force behind the Norfolk County economy, prox-imity to Lake Erie has created opportunities for tourism, especially in cottage rentals, boat and day-trip tourists, particularly during the warm summer months.
Recent economic development efforts here include the annual Norfolk County Official Map & Local Food Guide. As part of a
tourism & economic development marketing partner program, the county and private-sector agriculture partners distribute 55,000 copies of the guide across Ontario, most of them to consumers who are interested in travelling to Norfolk County and staying overnight on a vacation or to purchase local food.
If you want to be at the centre of the aerospace industry, or you just want to be at the centre of where it all happens, you’ve come to the right place. Our airport sites are home to 29,000 people working in 250 topfl ight companies. And right now, we have 1,500 acres available for development. Here, you benefi t from close proximity
to world-class airport infrastructures and industry partners, plus the bottom-line benefi ts of the lowest set-up costs in North America. All of which adds up to elevating both your service offerings and your profi ts. To learn how we can help expand your opportunities, contact us at: [email protected]
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Many opportunities. Countless possibilities.
If you’re looking for a great place to develop your business, here’s two.
Many opportunities. Countless possibilities.
If you’re looking for a great place to develop your business, If you’re looking for a great place to develop your business, If you’re looking for a great place to develop your business, If you’re looking for a great place to develop your business, here’s two.here’s two.
ADM13107_IndustrialDev_4.3x6.75_E_v3.indd 1 11/28/12 5:08:10 PM
52 the leader | January/February 2013
No, I’m not calling you “stupid.” I’m simply using this expres-sion to get your attention.
Why? There has never been more emphasis on “big data” or what is known as extreme information management.
Big data is the corporate real estate (CRE) equivalent of “Moneyball.” That’s the name of 2012’s hit movie about Billy Beane, general manager of the Oakland Athletics major league baseball team. He introduced data analytics to build a cham-pionship-level team and invested a lot less on payroll than most teams.
Data is the currency of leadership suc-cess. Ultimately, it enables us to communi-cate the value – not just the cost – of CRE.
As a CRE executive, if you’re able to accomplish effective data management and data analytics, you’ll gain a distinct leadership edge and have more influence. That’s because collecting and analyzing data well = information you can trust = C-suite access and credibility resulting in CRE – enterprise alignment.
The enterprise leadership implications
It’s all about the DATA, stupid!Extreme information management brings greater C-suite access, credibility
industry traCkEr B y R I C H A R D k A D z I s
are clear, and the performance manage-ment overtones are pronounced because data are the essence of all metrics. Data also illustrate why informed decision support becomes more critical today and tomorrow for major steps like:• scenario planning• Forecasting future space demand• Tracking space utilization• Increasing portfolio flexibility• Enabling work and engaging employees• Directly informing the triple bottom line• Delivering integrated energy manage-ment systems• Reducing risk
After attending an education session on this hot topic at the CoreNet Global summit in Orlando, I went to Craig
Gillespie, CEO of the Americas for Manhattan Software, to answer some burning questions I had pondered fol-lowing the insightful panel discussion on big data that took place there.
Why is the Topic of BIG DATA so Important Today?Have you ever been in that awful situa-tion where a manager or an executive is challenging you about an assumption you have made in a presentation? you have made the decision based on intuition (“my gut tells me”) and then quickly real-ize you are on poor footing and cannot back up that assumption.
One of the challenges that has haunted the real estate and facility management professions is actually having and maintaining consistent, accurate data through all of the various parties that have access to or manipu-late the data in databases like IWMs. It could be floor plans, move lists, busi-ness unit forecasts, leases, lease exten-sions, BIM drawings, occupancy data, etc. One could argue that we deal with BIG data or small data, but regardless, we need to have accurate and current information to support our recommen-dations and decisions, big or small.
Who would have thought when we were kids watching the “Jetsons” or “star Trek” that the sexiest job in America in 2012 would be a data scientist? But that is exactly the title bestowed by Tom Davenport in his latest HBR article. Manhattan is lucky to have our own “data scientist” on our team whose background is in astro-physics and is an expert in this area of big data and analytics. Data ana-lytics are literally a science.
Is there Anything New about the Data We Are Dealing with Today Versus a Decade ago?yes, indeed!! There are five key differences:
1. The volume of data is huge. As of 2012, 2.5 exabytes of data have been cre-ated each day, and that doubles every 40 months. Data exists on absolutely every aspect of the CRE and FM business both
Hayden Clay Craig Gillespie
January/February 2013 | the leader 53
internally and externally. There is infor-mation from service providers, furniture vendors, architects, HR, IT, security, environmental experts, maintenance prac-tices, space utilization, leases, etc. And it all revolves around enabling our places to support the best talent we can assemble for our business in both bricks and clicks.
2. The increase in the speed or veloc-ity of data creation with the addition of real-time streaming data pouring in from sensors, mobile phones, video, social media, etc. Even databases that can be bought are now updated quarterly rather than in 10-year increments.
3. As mentioned, the variety of data has increased by adding unstruc-tured data (social media, videos, sensors) to typical structured data like tables (in RDMS), cubes (BI) and data arrays (Excel). This increase in variety has been fueled by the ‘metrospheric’ rise in mobile computing.
4. The accuracy or verac-ity of the data becomes even more critical as we make more time-sensitive and expensive decisions on real estate portfolios. We usually have little time to react to some aspect in our business changing instan-taneously in the disruptive world we find ourselves working in today.
5. The variability of data from all these disparate sources makes it more diffi-
cult to assemble it all in one centralized location and make sense of its patterns and arrays of information. That is why OSCRE has begun to standardize how we describe space and cost of occupancy.
What Process Do You Suggest to Think about the “Care and Feeding” of Big Data?There are four stages in approaching the management of big data:
Phase 1. Identifying the right data need for CRE and FM is critical to ensuring you have the information to make the most effective and efficient decisions. You should identify all the sources of information for
creating a centralized database for all of your leased and owned facility and real estate data. This will ensure you have the most accurate snapshot of your real portfolio both today as well as forecasts for the future.
Phase 2. Upon completing the first phase of what data you need to track, you must figure out the methodology of
data collection for this disparate infor-mation from all of the sources. Some of it can be integrated electronically from existing sources (i.e. CAD, HR, IT, Excel and other siloed databases), some of it from new unstructured sources (i.e. social media, video, sensors), and some will still require manual entry (for new lease or building information).
Phase 3. Analysis of big data is what makes the first two phases worthwhile. This is the stage where you beg, bor-row or steal a data scientist (see Tom Davenport’s HBR article for some tips) to help you ask the right questions for understanding the information to
achieve the biggest oppor-tunities in the optimiza-tion of your real estate portfolio.
Phase 4. The final stage is making sure you have a maintenance program in place to ensure that the database is updated either electronically or manually according to a particular schedule. This will then
give you the confidence that trans-parency of information can exist and everyone can trust the authenticity and accuracy of the CRE/FM big data.
Author’s Note: Special thanks to Nancy Sanquist of Manhattan Software.
Merck’s Clayton Hayden:It’s all about the Data
Manhattan Software’s Craig Gillespie
shares how Clayton Hayden, Director of
Global Real Estate Services (GRES) at Merck
& Co., is the perfect example of a CoreNet
Global member who has benefited incredibly
from understanding the value of big data and
analytics for CRE and FM.
GRES was formed in 2006 to facilitate
effective and integrated planning for the
optimization of Merck’s global 30+-million-
sq.-ft. (2.8+-million-sq.-m.) real estate port-
folio. They began the journey of developing
an integrated workplace management
software database to link disparate data
and provide transparency of information by
creating a single depository.
But the GRES group had no idea that
in only three years from that time it would
merge with another pharmaceutical giant,
Schering Plough. Now they not only had
a tremendous amount of new information
to deal with, but at the same time they
were asked to contribute $200 million
to the “synergy target” promised to the
shareholders following the merger.
As Hayden stated during Manhattan’s
2012 Executive Summit held at Harvard
University, “It’s all about the data.” By
having the processes and technology
in place, they could add the Schering infor-
mation to their own big data set, and since
analytics were embedded in the Merck
culture, use tools to mine the information
to identify the best “value capture” oppor-
tunities while leveraging quick wins.
The GRES planning process, based
on accurate and timely data, will exceed
the $200-million cost reduction goal. It
integrated the C-level, CRE, FM, finance,
legal, HR and IT functions and enabled
business growth, flexibility and innovation.
What better benefits can there be? So,
yes, “It’s all about the data” for huge cost
reductions, integration opportunities and
productivity increases.
As Gillespie summarized, “I believe
in CRE, we have just begun to realize the
massive benefits of big data.”
What do you think?
Data is the currency of leadership success. Ultimately, it enables us to communicate the value – not
just the cost – of CRE.
industry tracker
54 the leader | January/February 2013
dashboard 3rd quarter 2012
* Average full service** Average NNN
¶ All office rental rates reflect CBD & Suburban unless otherwise noted ¶ New York office includes Midtown, Midtown South and Downtown Manhattan; rent reflects the overall average for Class A and Class B in those submarkets
¶ New York industrial reflects Northern New Jersey statistics
¶ Washington D.C. industrial reflects Suburban Virginia, Suburban Maryland statistics
¶ Washington D.C. office reflects Downtown Washington D.C., Suburban Virginia and Suburban Maryland
*Office **Industrial Office Industrial Office Industrial
EurOpE
Amsterdam $42.50 $8.50 16.4 n/a 0.3 n/a
Frankfurt $51.50 $9.50 13.5 3 1.8 n/a
London $151.50 $17.00 6.1 n/a 0.4 n/a
Moscow $112.50 $16.00 14.7 1.4 6.6 n/a
Paris $94.50 $13.50 7 6.8 1.1 n/a
AsIA
Beijing $122.50 $5.50 5.4 1.5 4.9 n/a
Hong Kong $220.00 $14.00 3.5 n/a 1.7 n/a
Mumbai $75.00 n/a 20 n/a 9.1 n/a
Shanghai $107.50 $6.50 6.8 6 19.3 n/a
Singapore $195.00 $17.00 6.5 17 7.1 n/a
Tokyo $170.00 $20.00 7.5 n/a 6.8 n/a
AustrAlIA / NEw ZEAlANd
Melbourne $52.50 $9.50 5.6 n/a n/a n/a
Sydney $75.00 $11.00 8.2 n/a n/a n/a
Auckland $65.50 $10.50 7.9 n/a n/a n/a
uNItEd stAtEs
Chicago $25.17 $4.10 17.7% 10.1% 487,671 3,471,357
Los Angeles $28.82 $5.28 14.2% 5.6% 302,673 -1,025,076
New York $58.77 $5.00 10.3% 7.8% 1,180,863 -231,222
Washington DC $36.10 $7.57 13.9% 10.9% -369,060 423,975
source: Cassidy Turley
City lease rates (usd/sF/year) Vacancy rates (%) Net Absorption (%) Renew your CoreNet Global Membership today!
Not a member? Contact us at [email protected] to Connect, Learn, Grow and Belong.
CoreNet Global paves the way for advancing corporate real estate, helping to strengthen your strategic positioning inside the corporate enterprise. In times of industry change and economic challenge, we respond with leading-edge research, timely case studies, knowledge sharing and innovation, including:
> Helping you adapt quickly and effectively to today’s ‘new normal’ and economy.> Providing timely findings on critical cost reduction strategies surrounding matters
impacting your bottom-line.> Developing forward-looking and industry-bending hypotheses around issues like
changing lease accounting standards, global logistics challenges, and economic influences on sustainability strategies.
> Conducting ground-breaking research through Corporate Real Estate 2020 and annual State of the Industry reports defining leading-edge practices.
> Recognizing professional achievement through our Global Awards Program and professional designations: Masters in Corporate Real Estate (MCR) and Senior Leader Corporate Real Estate (SLCR).
> Facilitating knowledge-sharing and networking channels through Global Summits, Chapter education sessions, and Corporate Partner Program Discovery Forums.
CoreNet Global has a 10-year history of connecting and providing value to you and your company through every facet of the network and supply chain of the corporate real estate industry – from end users and occupiers to service providers and economic developers.
RENEW your 2013 membership today at www.corenetglobal.org.
CoreNet Global’s promise to you
is that through our network, professional
development, leading-edge research and
other benefits, you’ll learn how to more
effectively influence, or even change, major C-Suite and business
drivers.”
Lee R. Utke, Director,Global Corporate Real Estate
Whirlpool Corporation
Renew your CoreNet Global Membership today!
Not a member? Contact us at [email protected] to Connect, Learn, Grow and Belong.
CoreNet Global paves the way for advancing corporate real estate, helping to strengthen your strategic positioning inside the corporate enterprise. In times of industry change and economic challenge, we respond with leading-edge research, timely case studies, knowledge sharing and innovation, including:
> Helping you adapt quickly and effectively to today’s ‘new normal’ and economy.> Providing timely findings on critical cost reduction strategies surrounding matters
impacting your bottom-line.> Developing forward-looking and industry-bending hypotheses around issues like
changing lease accounting standards, global logistics challenges, and economic influences on sustainability strategies.
> Conducting ground-breaking research through Corporate Real Estate 2020 and annual State of the Industry reports defining leading-edge practices.
> Recognizing professional achievement through our Global Awards Program and professional designations: Masters in Corporate Real Estate (MCR) and Senior Leader Corporate Real Estate (SLCR).
> Facilitating knowledge-sharing and networking channels through Global Summits, Chapter education sessions, and Corporate Partner Program Discovery Forums.
CoreNet Global has a 10-year history of connecting and providing value to you and your company through every facet of the network and supply chain of the corporate real estate industry – from end users and occupiers to service providers and economic developers.
RENEW your 2013 membership today at www.corenetglobal.org.
CoreNet Global’s promise to you
is that through our network, professional
development, leading-edge research and
other benefits, you’ll learn how to more
effectively influence, or even change, major C-Suite and business
drivers.”
Lee R. Utke, Director,Global Corporate Real Estate
Whirlpool Corporation
56 the leader | January/February 2013
thank you
Corporate Partners
WellPoint
eBay Inc.
Deutsche Bank AG
The Clorox Company
Wells Fargo
The LEADER extends a warm “Thank You” to the following organizations that help shape the future of the corporate real estate and workplace industry through their generous support of CoreNet Global and its many initiatives.
(Workplace Community Silver Level)
Community Sponsors
(Workplace Community Bronze Level)(Workplace Community Gold Level)
Reed Elsevier
thank you
January/February 2013 | the leader 57
Eli Lilly & Company
LMC Properties, Inc.
USAA
T-Mobile
International Monetary Fund State of West Virginia
(Strategy & Portfolio Planning Community Gold Level)
(Manufacturing & Industrial Community Gold Level)
(Facilities Management Community)
58 the leader | January/February 2013
Wirtz Beverage’s new 605,000-sq.-ft. (6,039-sq.-m.) corporate headquarters located in Cicero, Ill., has recently been completed. The new facility – WBI Center – consoli-dates four locations into one hub for sales, distribution and training programs. Ware Malcomb provided architectural design and interior design services for this project that integrates offices, conference centers, train-ing facilities with warehouse and distribu-tion areas. Several technological features were incorporated throughout the facility, including digital signage screens embedded in hallway floors and lobby areas.
Ed Schreyer has been promoted to President, Agency Brokerage/Asset Services for the Americas at CBRE. He will direct the company’s commercial real estate management services in the Americas while continuing to lead the firm’s agency brokerage practice. Alex Darragh has been appointed to over-see the company’s Global Corporate Services in Canada, Latin America and the Caribbean. He will work with CBRE leaders to enhance client service and accelerate business growth in those regions.
Cathrine A. Cotman has joined Cassidy Turley’s corporate services team as Senior Vice President of Strategy. She will serve the company’s SunTrust account, leading portfolio optimization efforts as the bank seeks to transform its corporate real estate (CRE) footprint. Ed Verret has also joined the firm as Senior Managing Director, and he will serve as the Alliance Executive leading Cassidy Turley’s partnership with SunTrust. Lee Black has also joined the firm’s Los Angeles Metro office as Executive Managing Director and Principal and will grow its corporate services, tenant repre-sentation and project leasing platforms.
Brookfield Asset Management and Johnson Controls have agreed to merge their Australian and New Zealand property and facility services operations to create Brookfield Johnson Controls. The merged entity will combine the local operations of Brookfield Multiplex Services, with the Australian and New Zealand business of Johnson Controls Global WorkPlace Solutions.
L’Oréal USA plans to add 211 jobs and invest more than $42 million in Kentucky, and the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved the company for tax incentives up to $5 million through the Kentucky
Business Investment program. KEDFA also approved L’Oréal for tax benefits up to $800,000 through the Kentucky Enterprise Initiative Act, which allows approved com-panies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and develop-ment and electronic processing equipment.
Sue Bennett of Bennett Design Associates was ranked number 57 in the 14th-annual W100
ranking of Canada’s Top Female Entrepreneurs, pro-duced by PROFIT Magazine and Chatelaine. The ranking is a composite score based on the size, growth rate and profitabil-ity of their businesses.
Manhattan Software has been honored with an award by the International Facility Management Association (IFMA). Nancy Johnson Sanquist, Manhattan Vice President and IFMA Fellow, received the Distinguished
Author Award for a Book, along with Diane Coles Levine, Director of Workplace Solutions, SCAN Healthcare, for the editing and writing of the 2011 IFMA Foundation publication, Work on the Move: Driving Strategy and Change in Workplaces.
members on the move
Wirtz Beverage Headquarters
Outdoor Mega Mall Bucharest
Mega Mall, a modern retail scheme in Bucharest, Romania, has obtained a building permit to get started this year. Real estate consulting companies DTZ Echinox and Colliers International are co-exclusive leasing agents for Mega Mall Bucharest, and Real 4 You Group is the developer. Carrefour, Flanco, Altex, Slot Point Casino and Cine Grand, C&A, H&M, Kenvelo, Lee Cooper, Celio, Lashez and Office Shoes, have already secured locations in Mega Mall.
Sue Bennett
January/February 2013 | the leader 59
CORENET GLOBAL EVENTS
Calendar of Seminars The following seminars can be taken individually for credit toward the
Master of Corporate Real Estate (MCR) designation or the Senior Leader
of Corporate Real Estate (SLCR) certificate:
BANGALORE: 18-19 FEBRUARYSLCR Seminar
¶ Financial Leadership & Decision Making
SYDNEY: 19-20 FEBRUARYMCR Seminar
¶ Enterprise Alignment
MUMBAI: 21-22 FEBRUARYMCR Seminar
¶ Real Estate Transactions: Impact on Corporate Financial Statements
SINGAPORE: 21-22 FEBRUARY SLCR Seminar
¶ Financial Leadership & Decision Making
ATLANTA: 18-19 MARCh MCR Required Seminar
¶ Real Estate Transactions: Impact on Corporate Financial Statements
MCR Elective
¶ Advanced Lease Analysis
MCR Elective/MCR.w Required
¶ Creating Corporate Value through Workplace Strategy
GLOBAL SUMMITS
CORENET GLOBAL ASIA PACIFIC SUMMIT ShAnghAI ¶ 26-28 MARCh 2013
Grand Hyatt Shanghai
CORENET GLOBAL NORTh AMERICAN SUMMITLAS VEgAS ¶ 21-23 OCTObER 2013
MGM Grand
a look ahead
INDEx OF ADVERTISERS
aeroports de Montreal ....................................................................................... 51CoreNet Global (Global awards) ....................................................................... 39CoreNet Global (Membership) .......................................................................... 55CoreNet Global (Shanghai Summit) ................................................................. 11CoreNet Global (las Vegas Summit) ................................................................ 31CoreNet Global (Spring Forward) .................................................................... 2-3CoreNet Global (thank You) ........................................................................ 56-57hoosier energy ...................................................................................................... 7Interface americas ................................................................................................ 5Knoxville-Oak ridge Innovation Valley Inc. ...................................................... 60Norfolk County .................................................................................................... 49rocky View County ............................................................................................. 47Saskatchewan Ministry ...................................................................................... 48Sodexo .................................................................................................................. 9
¶ drivers of Space Needs in europe
¶ location Selection trends in India and China
¶ SPeCIal leaderShIP SerIeS
¶ always Networked Wireless devices
¶ Maintenance Management for high-Performance Buildings
¶ end User Profile on e&Y’s trex Morris
In the next Issue!
Shanghai Las Vegas
