th Che Ne e le Ck O IN w l ade ut sI OO r de k ’s !

Facilities Management in China
(Page 12)

UBS’s Real Estate Strategy 2015
(Page 20)

Workplace Design for Well-Being
(Page 36)

Susan Wagner of Microsoft EMEA
(Page 40)

Leap Ahead as a LEADER!
CoreNet Global is proud to present 3 all-new learning experiences guaranteed to supercharge your corporate real estate success.

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.

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. 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, nonprofit 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.

New York City

17-19 April 2013
730 Third Avenue Midtown East, New York, NY

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.

Customize your curriculum to propel your professional growth and promote your career.

Wednesday, April 17, 2013
7:30 – 8:30 AM 8:30 – 10:15 AM 10:15 – 10:30 AM 10:30 AM – Noon Noon

Networking Breakfast CRE/Financial Services CRE/Financial Services CRE/Bio-Med/Pharma/Life Sciences Networking Break CRE/Bio-Med/Pharma/Life Sciences Adjournment

Wednesday, April 17, 2013
Noon – 1:00 PM 1:00 – 3:00 PM 3:00 – 3:30 PM 3:30 – 5:00 PM 5:00 – 6:00 PM

Welcome & Networking Lunch The Radical Edge: The Extreme Leader’s Guide to Uncommon Achievement Steve Farber Networking Break Extreme Leadership Jam Session: Confront CRE’s Top 10 Challenges (Live & Unscripted) Steve Farber Networking Reception (Executive Leader’s Council attendees join Leader’s Edge audience)

Sharpen Your Edge
www.corenetglobal.org
Leader’s Edge Presented by:

Thursday, April 18, 2013
8:00 – 8:30 AM 8:30 – 10:15 AM 10:15 – 10:30 AM 10:30 AM – Noon Noon – 1:00 PM 1:00 – 2:30 PM 2:30 – 2:45 PM 2:45 – 4:15 PM 4:15 – 4:45 PM 4:45 – 5:00 PM

Networking Breakfast Enterprise Thinking: CRE in the Grand Scheme of Things David Goldsmith Networking Break Partnering for Success CRE + HR CRE + IT Peer2Peer Lunch Paid to Think: How & Why to Put Mind Over Matters David Goldsmith Break Senior CRE Leader Emerging CRE Leader ThinkTank ThinkTank CRE Leader IdeaBank (Emerging/Senior Leaders & ELC regroup for ThinkTank recap) 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 8:30 – 10:00 AM 10:00 – 10:15 AM 10:15 AM – Noon Noon – 1:00 PM 1:00 – 2:30 PM 2:30 – 3:00 PM 3:00 – 5:00 PM Agenda is tentative and subject to change.

Networking Breakfast The Journey of Not Knowing: (Wo)Maneuvering CRE Through Uncertainty Julie Benezet Break Leading Ladies: Successors as Mentors Networking Power Lunch Best Practices Show-and-Tell-Athon Short walk to Avon HQ for site tour Call on Avon: HQ Site Tour of the company for women

Register at www.corenetglobal.org/springforward

#CNGForward

articles published in this magazine may not be re-printed without written permission from the Editor. Workplace Resources. $95.s.org. outside north america. ga 30303 Phone: +1. Inc.404. Global Corporate Real Estate Whirlpool Corp. boulder.corenetglobal. Treasurer Executive Managing Director CBRE Matthew J. $85. Global Facilities and Real Estate Procter & Gamble Chris Mach Associate Director.org The Leader. CEO Council Greater Fort Lauderdale Alliance ADvERTiSing & pRoDuCTion offiCES Corenet global 2430 broadway. Randy Smith. Corporate Solutions Asia Pacific Jones Lang LaSalle Philip Grossberg. 2430 broadway st. boulder. Business Development DTZ. is published six times a year. Chair Senior Vice President. 2500 broadway st. office of Publication: Corenet global. Real Estate and Facility Management Thomson Reuters Lee R. Editorial inquiries should be addressed to Chelsie butler at cbutler@corenetglobal. Editor Chelsie Butler Editor-at-LargE Richard Kadzis Contributing WritErs Melissa Securda Martin Sinderman Sonali Tare CrEativE dirECtor Bonnie Hofto advErtising ManagErs Michael Mooney Tim Abrams Matt Dirks Jim Scannell. as a bi-monthly publication commencing January/February. dollars): = in the united states. Vice President of Real Estate Coca-Cola Refreshments Erica Chapman. Strategic Consulting Jones Lang LaSalle Keith Perske Head of Global Workplace Innovation Johnson & Johnson Robin Ronne Managing Director. Irene Masterton GM Retail Real Estate Shell International Petroleum Company Ltd.362. McBlaine Chief Executive. Staal. Corporate Real Estate AT&T Services.404.589. $75.443. Boyette Strategic Advisors Tom Donatelli Vice President – Real Estate & Portfolio Management Pfizer Incorporated Larry Ebert Head of Corporate Project Management Cushman & Wakefield Scott Foster. ste 200. suite 3000 atlanta. the opinions expressed in this publication are not necessarily those of the association. Global Real Estate Honeywell Sally Maxwell Program Manager IBM Real Estate Operations Richard M. a UGL company T. Administrative Services The Travelers Companies.3219 Fax: +1.4181 Phone: +1.565. Inc.589. Corporate Occupier and Investor Services Cushman & Wakefield Maureen Ehrenberg Global Director of Facilities Management. Chair-Elect Vice President. PostMastEr: send address changes to: The Leader. Real Estate and Facilities Oracle Steven Quick. CEO Council Greater Fort Lauderdale Alliance Jim Scannell Senior Vice President.6943 E-mail: leader@corenetglobal. Denis McGowan Group Head CRES Business Alignment & Asset Management Standard Chartered Bank Sean Prasad Vice President. Global Corporate Services CBRE John Forrest CEO. Co 80304-4237. suite 200 boulder. APJ Corporate Real Estate Cisco Systems EDiToRiAl offiCES Corenet global 133 Peachtree street. The Leader is sent as a benefit of membership to all members of Corenet global. nE. MCR Director. MCR VP.org. Administrative Services The Travelers Companies Tony Shou Fat Wong. LEED AP Managing Director. Corenet global’s official Publication.org. Real Estate Operations General Electric Rick Kriva Vice President. in Canada. Real Estate and Facilities T-Mobile Christopher L. Del Boyette Principal.org ASSOCIATE DIRECTORS Jessica Beers. Fanoe Immediate Past Chair. ste 200. SLCR Consultant New York 4 the leader | January/February 2013 . Corporate Workplace Bank of America Thomas Glatte Corporate Real Estate Management BASF Group David Kontra Manager. contact nicki Williams at 404-589-3241 or nwilliams@corenetglobal. Co 80304 toll Free: 866. Esq. Utke. Co 80304 or leader@corenetglobal. MCR. MCR Senior Director. Global Corporate Services CBRE Lydia Jacobs-Horton Director. by Corenet global.LEADERSHIP the leader is printed on recycled paper CoREnET gloBAl BoARD of DiRECToRS Your leadership makes the diFFerence.3202 Web: www.303.303. LEGAL COUNSEL TO CORENET GLOBAL David Goch Webster Chamberlain and Bean EDITORIAL ADVISORY COMMITTEE George Bouri. subscription rates for non-members (in u.4023 Fax: +1. Head of Real Estate (NAFTA/LatAm) & Attorney OSRAM SYLVANIA Micheal Creamer Partner and Head of EMEA. to order. MCR Vice President and Global Head. Patrick Donnelly Principal BHDP Architecture Gina Rizzo Global Client Relations Herman Miller Robin Ronne Managing Director. MCR Senior Vice President.

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tvsdesign’s Asia Pacific Manager. Microsoft EMEA’s Innovation Leader Service Provider Yaomin Xue. Economic Developer EDCUtah’s Todd Brightwell 40 Dashboard 3rd Quarter 2013 Figures from Cassidy Turley 54 Transforming CRE Service Delivery: Unlocking Sustainable Value for the Enterprise 52 The Rise of the Human Factor: Workplace for Well-Being 42 44 Special intereSt FeatUre Canada: A Diverse Economy on the Upswing 46 Leadership Letter from the Editor CRE in the News Members on the Move A Look Ahead 4 8 10 58 59 6 the leader | January/February 2013 . Strong Leadership and the Right IT Platform Pave the Way for Innovation 40 execUtive proFileS End User Susan Wagner. Credibility 52 A Shared Vision. issue 1 FeatUreS 12 16 20 24 28 32 36 20 12 Cover Story Facilities Management in China: Growth in Sustainability and Strategy Technology Simple Lighting Control Retrofits Offer Sophisticated Benefits Lower Costs & Greener Workplaces: UBS’s Global Real Estate Strategy 2015 Corporate Real Estate Outsourcing: A Transformative Look 20 Years Later departmentS Industry Tracker Extreme Information Management Brings Greater C-suite Access.TABLE OF ContentS january/february 2013 Volume 12.

rail. and air transportation.com. Contact Hoosier Energy to help you with your next expansion or relocation.Favorable business climate. www. Excellent road. And a partner to help facilitate every step of the process.com Call 812-876-0294 .HoosierSites. Abundant buildings and sites. Learn more at HoosierSites.

where you – our readers – asked for a cleaner. for the extra time she committed to designing the new layout. Chelsie Butler. Thank you to our readers and to the Committee for your suggestions. so please feel free to contact a member of our staff if you have any comments you’d like to make.org. and he’s right. After a few revisions and some positive feedback from THE LEADER’s dedicated Editorial Advisory Committee. So as you can see. updated and easier-to-read magazine format. As promised. Senior Director of Real Estate and Facilities EMEA for Microsoft. which include strengthening our global footprint. 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. this coverage is part of our ongoing commitment to our Strategic Priorities. Our most recent redesign is a direct result of the feedback from the Readership Survey we deployed last year. You can also reach out to me directly at cbutler@corenetglobal. you will definitely notice some changes. 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. Editor 8 the leader | January/February 2013 . As always. as well as an End User Profile on Susan Wagner. Inside you will also find a Service Provider Profile on Yaomin Xue. and special thanks to our Creative Director. Nothing Changes A great quote from motivational speaker Tony Robbins. we appreciate your feedback. we’d like to fulfill your requests and introduce our new look to you. tvsdesign’s Asia Pacific Manager. and we hope you enjoy your new issue.letter FrOM THE EdiTor BY ChElSIE BUtlER By Changing Nothing. The article – written by our Director of Knowledge and Research. Bonnie Hofto. Thanks for your continued support and readership. As you read through the latest issue of THE LEADER magazine. You may also notice that the subject of our cover article is facilities management in China.

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before accelerating to 4. down 130 basis points from its peak of 16.K.S. The stimulus comes as Japan sits on the brink of a technical recession since manufacturers have cut production. customer contact centers and technical support centers from 2008 to 2011. resulting from investment by corporations in shared service centers. metro areas with strong concentrations of high-tech firms. showing an unexpected rise of 1.S. Improvement in the office market will begin to accelerate in 2014.5 percent in 2013. India and China were the top three global shoring locations for corporations. according to a new analysis from CBRE Group. and the U. Office-using employment remains below its pre-recession peak.Corporate real estate in the news U. and China attracted 56 projects.7 billion) on a variety of measures. employment support and aid to cashstrapped small businesses.) According to the report. setting the stage for more substantial demand for office space. including rebuilding areas bit by the March 2011 earthquake.000 jobs.000 jobs. with countries like the U.9 percent by the end of 2013.K.S. Boston and San Francisco. which resulted in 25. with countries like the U. “Onshore. and companies are increasingly selecting from those three shoring options. as sourced from fDi Markets data (the Financial Times Ltd. Japan to Receive Government Stimulus According to www. seeing increased activity. and over the next two years. CBRE anticipates that office-using employment will have recovered to its pre-recession peak by the end of 2013. and the U. Offshore: Still Unsure?”. The Philippines attracted 115 projects during that period. it projects that average rents will increase by 3. As a result. Okla. but this is starting to reverse. Office Market Vacancy Rate Declining The U. falling to 14. such as Austin.S. creating more than 72. an increasing number of companies are looking to bring operations closer to home. 10 the leader | January/February 2013 . CBRE noted that uncertainty had caused businesses to pull back somewhat over the summer months affecting hiring decisions. The office vacancy rate in Q3 2012 was 15. The ranking was based on a number of jobs created. India attracted 105 projects. Nearshore. such as Dallas and Oklahoma City. Asia Pacific Home to Top Global Shoring Locations The Philippines.com. Recent economic data were more encouraging.8 percent in industrial production from last September to October. creating 64. The top-performing office markets will be those driven by technology and energy. While established offshoring locations such as India and the Philippines continue to attract the highest volume of offshoring and investment jobs. Markets getting a boost from energy-related industries. with the vacancy rate expected to drop to 13.4 percent rent growth in 2014.000 jobs. will also be well-positioned to take advantage of the economic recovery and will be among the top 10 rent growth performers over a two-year horizon. While established offshoring locations such as India and the Philippines continue to attract the highest volume of offshoring and investment jobs.5 percent. seeing increased activity. will experience solid rent growth.. but the gap continues to narrow.ft. according to a recent report from Jones Lang LaSalle.8 percent by year’s end. office market vacancy rate will continue to decline moderately next year.8 percent in Q2 2010. an increasing number of companies are looking to bring operations closer to home. the changing global economic landscape is impacting corporate strategy and location decision making. Japan’s government has approved its second round of stimulus in less than a month and announced it will tap reserve funds to spend Y88 billion ($10.

org . experience innovative session formats.org/shanghai2013 or contact: In Asia: Mario Qian. Coffee/Tea Service Registration/Information Open 8:30 – 10:30 8:00 – 17:00 8:00 – 16:30 8:00 – 9:00 THURSDAY Pre-Summit MCR/SLCR Seminars 25-26 March Early Bird Registration Deadline is 17 January 2013 Regular Registration ends 17 February 2013 Site Tours ELC Reception Breakout Sessions Networking Break Breakout Sessions/ REIMAGINATION Learning Quarters and Arcade Networking Lunch 14:00 – 16:00 12:30 – 14:00 11:00 – 12:30 10:30 – 11:00 9:00 – 10:30 Welcome Reception 18:30 – Onward 17:30 – 18:30 Private Events MCR/SLCR Events Sponsored Events Networking Events Invitation Only Events General Sessions/Breakout Sessions After Hours Breakout Sessions/ CORE Fundamentals/ REIMAGINATION Learning Quarters and Arcade Networking Break Breakout Sessions 16:15 – 17:45 15:45 – 16:15 Breakout Sessions 15:45 – 16:15 16:15 – 17:30 Networking Break General Session 2 To register. Lead and succeed.for the CoreNet Global Asia Pacific Summit in Shanghai convening high-level CRE professionals from around the world. there will be plenty of valuable information for everyone! Join Us #CNGShanghai Register today at www. Greater China & Japan +86 136 8194 9658. or if you’re a senior-level business executive. Challenge and inspire. mqian@corenetglobal. Coffee/Tea Service Special VIP Breakfast Registration/Information Open Networking Coffee/Tea Breakout Sessions Networking Break Breakout Sessions/ CORE Fundamentals/ REIMAGINATION Learning Quarters and Arcade Peer-to-Peer Lunch 12:30 – 14:00 14:15 – 15:45 11:00 – 12:30 10:30 – 11:00 9:00 – 10:30 8:00 – 9:00 8:00 – 17:30 8:00 – 9:00 8:00 – 17:30 WEDNESDAY 28 March 2013 Networking Coffee/Tea Business Center/Lounge.corenetglobal. Learn and grow. Registrar. kfield@corenetglobal. Member & Component Relations. At the Shanghai Summit you’ll engage with thought-provoking speakers. Powerful sessions led by industry leaders and experts from around the Whether you’ve just started your journey in corporate real estate. Director. and enjoy world-class networking. +1 404 589 3212.org/Shanghai2013 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? 2013 Agenda 25 March 2013 MCR/SLCR Classes 8:00 – 17:00 MONDAY 26 March 2013 MCR/SLCR Classes Discovery Forum Registration/Information Open Chapter Leaders Best Practices Meeting 17:15 – 18:00 16:00 – 17:30 13:00 – 18:30 9:00 – 16:00 8:00 – 17:00 TUESDAY 27 March 2013 Business Center/Lounge. visit www.org Outside of Asia: Karen Field.corenetglobal.

Facilities Management in China: Growth in Sustainability and Strategy 12 cover Story BY MELISSA SECURDA the leader | January/February 2013 .

a middle class emerged. The economic engine got a boost in 2001 when China joined the World Trade Organization (WTO). 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. improved access for MNCs to invest in China’s strategic emerging industries • Sustainability/energy targets. the population urbanized. Sectors of focus: health care. and in the years since. The government maps out a blueprint for the country every five years. environment-related taxes • Increase minimum wage. transition economic development from reliance on manufacturing and exports. as well as more economically challenged interior cities • An evolving business model that supports innovation and R&D for Chinese enterprises. energy. and the resulting economic boost drove the economy to its current status as the second-largest world economy. During this 30-year progress era. and property development raged. including historically prosperous coastal cities. distribution of economic prosperity across a broader population. Controlled evolution has been a key ingredient to China’s transformation. The People’s Republic of China embarked on a mission to liberalize market policies. education reform The government’s attention to its strategic emerging industries will result in a larger office worker demographic. open up China’s service sector • Inclusive growth. the country has experienced extraordinary growth. technology – known as strategic emerging industries.I n 1978.” January/February 2013 | the leader 13 . and China’s Twelfth Five-Year Plan targets the following key areas for rebalancing the Chinese economy: • Increase household income and encourage private spending. raw materials price reforms.

Most of the focus in China is on energy use – it’s the piece of the pie FM managers can control. currently in its infancy in China and driven in large part by multinational corporations (MNCs). Shining a spotlight on the facilities management (FM) sector reveals a burgeoning industry making inroads across the country. However. Building operations A new approach to FM is emerging in China. FM operations tend to be highly tactical in nature with a project-by-project mindset. incorporate sustainable strategies for building management and enhance the infrastructure to prolong the life of the asset. is making larger strides toward greater sophistication. Corporate real estate. there is a premium placed on sustainable buildings. A new approach to FM is emerging in China. one in which strategic building management contributes to a more valuable organization.creation. and this segment of the real estate pie is starting to show signs of improved sophistication. 14 the leader | January/February 2013 . FM is a rather recent trend in China. As in other parts of the world. one in which strategic building management contributes to a more valuable organization. Sustainability’s Role in FM Sustainability will continue to influence design and construction and will change the way FM is carried out in China. therefore it is critical to integrate sustainability into FM and link back to the organization’s strategic plan to show the value add. 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. a growing number of facilities managers in China endeavor to enable productivity in the workplace.

in 2006. China has seen significant growth in green building certification over the past five years. there is also a need for improved branding and marketing skills. Currently.org. Facilities managers need to demonstrate how the FM function and energy efficiency are critical to the business by using more sophisticated communication skills to sell FM achievements across the business. and current estimates include 200 buildings certified in the program. locally sourced FM leadership in China is essential for the continued sophistication of the profession in China.” 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. “Link facilities management to company performance. Chinese corporate culture generally does not support risk taking and internal collaboration. Allan Fan. Senior Facility Manager. Companies – mostly MNCs but also a growing 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. 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. Doing so will ultimately benefit FM in the form of management respect and the potential for additional financial resources when needed. About the Author Melissa Securda is Director of Knowledge & Research at CoreNet Global.4 million square meters) of LEED-certified projects in China. suggested that facilities managers move forward with the mindset that proper FM brings enormous value to the organization. Many companies rely on outsourced partners because of the lack of internal expertise. China began its own certification program. Three Star Green Building Certification. Many traditional Chinese firms have the mindset that failure is not an option and often have a very linear process that does not promote taking initiative and innovative ideas. The local industry needs greater transparency and integrity as it continues to evolve. reducing operating expenses over time and creates a meaningful contribution to resource preservation. there is no formal degree at Chinese universities for FM. Powering through the Challenges The biggest challenge to implementing strategic FM operations lies with the local culture. please search for this title on our Knowledge Center Online. and it’s a challenge for them to communicate the department’s value-add to senior leadership. Within the FM department. Certification creates accountability for energy efficiencies. This is achieved with FM working in tandem with project management.” said Fan. Greater China for Life Technologies.” FM is not an officially recognized profession by the Chinese government. Most of the certified stock is government owned. 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. For more information on this topic. Companies that perform these services must apply for a license as a property management company. 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. Facilities managers have the ability to adapt and modify the existing building structure when they begin to measure and track consumption.” he advised. Doing so will increase transparency and improve service delivery between FM and business operations. though there is a significant distinction between the two functions. most facilities managers in China are very technical. The lack of available. skilled FM talent ranked at the top of the list. Despite greater strides toward sophistication.A recent panel of local Chinese facilities managers was asked to describe the most pressing issue facing FM in China. Guidance from MNCs and global service provider companies can help inspire greater self-confidence and the ability for local Chinese facilities managers to trust their decisions. working in committed teams to create creative solutions and measurable goals. “There are not enough people in the industry. The US Green Building Council now reports more than 80 million square feet (7. Facilities managers can integrate the sustainable agenda into building operations and make the business case for increased sustainable measures by tracking progress.and their effective and efficient management are becoming more significant than the building’s initial construction. Developing more mature. China Corporate Real Estate Survey 2012: The Dragon is Stirring January/February 2013 | the leader 15 . She can be reached at msecurda@corenetglobal. but the trend will continue to spread over time. “Spend time with the sales people and understand the core business. “but we are eager to learn and want to catch up. Facilities management is in catch-up mode in most national and state-owned enterprises.

but even in existing buildings simple strategies can be implemented quickly and easily to address inefficiencies. 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. Daylight harvesting can contribute 20-60 percent lighting energy savings. those changes are virtually undetectable to occupants.6 billion square meters) of commercial building space in the U.S. Because the human eye readily adapts to slight variations in ambient light. Local and federal codes mandate new energy standards. lights that are left on 100 percent of the time and spaces that do not make adequate use of daylight. Purchasing Manager for the Reading Area 16 the leader | January/February 2013 . and more than 90 percent of it was built in the last century. In spaces that are frequently over-lit. which means that effectively managing lighting use can have a huge impact on a building’s energy costs1 (see Figure 1). Lighting accounts for approximately 38 percent of the average commercial office building’s total electricity use. management companies and tenants across the country. and building owners are embracing the idea that efficient buildings can command higher rent. Another ideal space for occupancy sensors is stairwells.Simple Lighting Control Retrofits Offer Sophisticated Benefits BY BRIAN DAUSKURDAS T here are 71 billion square feet (6. generally saving an additional 30 percent. rising electricity costs drive facilities to reduce electricity use. Mike Hodowanec. sustainable building practices are becoming the norm..2 Occupancy/vacancy sensors ensure that lights are not left on when a space is vacant. reduce energy use.1 Making these buildings more efficient and more sustainable is becoming a top priority for building owners. In new construction. daylight sensors can automatically adjust light levels based on the amount of daylight in the space.4 and like high-end trim.3 In perimeter spaces. because lights adjust over a few seconds. limit tenant turn-over and reduce building operating costs. facilitate longer leases. Three of the most common contributors to lighting electricity waste in buildings include spaces that are over-lit. High-end trim typically saves 15-20 percent lighting electricity. improve comfort and enhance productivity in the space. the change is generally transparent to the people in the space.

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 highend 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 significant impact on the building’s overall energy-reduction goals. Having identified some basic strategies for managing lighting 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 Standards Energy codes and standards vary by state, but all of the nation’s top energy codes reflect the importance of using lighting controls 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 Lights off 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 90.12010 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 significant 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.

Figure 1: Lighting electricity accounts for approximately 38 percent of building electricity use.

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 partitions must have an accessible, independent switching or control 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 occupancy 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

Lights dimmed by 80%

Lights dimmed by 50%

Daylight sensors can work with digital dimming ballasts to automatically adjust light levels based on available daylight

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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 wirelessly 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 manufacturer 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 occupants 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 (dimming lights to certain, pre-defined, light levels) or stepped switching (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 dimming controls will allow the occupants to choose the level of light appropriate for the work they are doing. Digital ballast technologies 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
Figure 2: Electricity costs have been rising steadily over the last 50 years.
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Wireless occupancy sensors and daylight sensors and controls can be installed quickly and require no additional wiring.

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 emergencies, and energy savings of 80 percent can be achieved with an occupancy-sensing lighting control solution. Federal Mandates In 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

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8 Cents per kWh

6

4

2

0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: US Dept. of Energy, Enrgy Information Administration

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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 savings. 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 sustainable 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 ROI If 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 electricity savings of 60 percent.5 A lighting control system can provide 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 occupancy 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 renovation. 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 technology that reliably detects both fine motion and major movement to ensure that no occupant is ever left in the dark. Wireless communication 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 building more efficient, help meet building code requirements, provide

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 information at www.corenetglobal.org. Sources:
Energy 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. 2 Williams A, et al. 2012. Lighting Controls in Commercial Buildings. Leukos. 8(3) pg 161-180. 3 VonNieda 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. 4 Brambley MR, et al. 2005. Advanced sensors and controls for building applications: Market assessment and potential R&D pathways. Pacific Northwest National Laboratory: prepared for U.S. Department of Energy. 5 Compared 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, highend trim, and daylight harvesting). Actual energy savings may vary, depending on prior occupant usage, among other factors. 6 Estimates based on Lutron controls installed in Empire State Building prebuilt tenant space. Payback claims assume 65% reduction in energy costs, and energy rates of 22 cents per kWh. Actual payback terms may vary. 7 Reading 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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About the Author
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.

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

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also known as “Footprint. and the relocation to more affordable.Lower Costs & Greener Workplaces: UBS’s Global real estate Strategy 2015 BY NICK GARNISS AND PETER WELSBY ore than ever before the financial sector is under scrutiny. concentration on bigger buildings. a significant proportion of the company’s budget is allocated to real estate. the Middle East and Africa. in turn.” This strategy covers each of UBS’s major centers. The premise of the strategy is the significant reduction of ongoing costs. Present in all major financial markets worldwide.000 employees working in the Americas. Make Architects global implementation of a defined five-year real estate strategy assigned to a particular region (e. with about 35 percent of its 64. and 12 percent in Asia Pacific. Zurich. 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.” Footprint is the M UBS’s offices at 5 Broadgate in London. the exiting of less-efficient buildings. better value for its clients. London and New York City). with an additional commitment to sustainability. 20 the leader | January/February 2013 . with clients demanding better value from its products and greater transparency within services. 17 percent in the rest of Europe. “Workplace for the Future. peripheral locations as part of a new workplace concept.g. The recent economic downfall has caused the financial sector to identify cost savings across the businesses and ensure that every aspect is running at maximum efficiency. UBS’s New Strategy Defined With such an expansive CRE portfolio. To ensure that the management of this is executed effectively. At the heart of this new approach is UBS’s global real estate strategy 2015. 36 percent of its employee base in Switzerland. UBS has committed itself to taking an innovative approach to implementing and using its CRE projects to generate increased efficiency and. This. UBS has offices in more than 50 countries.

execution • Efficiency: flexibility. integration. 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. The 12-story. resource efficiency • Identity: values. branding. state-of-the art development will bring the firm’s trading operations together into one building as outlined by the strategy.London Implementation In London. attraction January/February 2013 | the leader 21 . The design for 5 Broadgate is a proposed world-class office facility to be developed and ready for occupancy in 2016. as well as the complete rethink of the company’s existing premises at Liverpool Street as part of the new site. which is based on two key components – consolidation and space efficiency – and that is driven by four fundamental principles: • Effectiveness: collaboration. cost efficiency • Environment: sustainability.

24 hours every day. consolidating these locations will increase efficiency and collaboration among the UBS teams.574-sq. replacing critical infrastructure assets and ensuring the most efficient use of space – needed to be delivered within 24 months. 22 the leader | January/February 2013 .-m. UBS required a partner that would align itself seamlessly into the organization and not require a significant amount of “bedding in” time before starting the program. reducing water consumption by rainwater harvesting and innovative technology and increasing biodiversity through the incorporation of green roofs and terraces.UBS’s Liverpool Street location is part of the company’s consolidation into one office.-ft. A lease break in the Broadgate Campus buildings was critical to enable the move to the new development. This move will also allow UBS to consolidate its trading operations into one building. UBS’s London CRE portfolio currently consists of the Broadgate Campus buildings. 365 days a year. To realize the longer-term vision. the 1980s campus at 100 Liverpool Street and 1 Finsbury Avenue. 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. Overcoming Project Challenges To realize the longer-term vision. meeting and conference facilities. This short-term strategy will facilitate the relocation of employees and is based on improving current corporate accommodations.) trading floors. (5. This was a significant challenge for a global financial operation that functions at 100 percent. 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. which have served their purpose well for more than 25 years. UBS had a break for 2016 that was unmovable. which include generating renewable energy with photovoltaics and solar thermal panels. demonstrating a commitment to a new way of working in financial real estate. improving accommodation. the building has been designed to include the highest standards of sustainability good practices. resulting in the retention of UBS in the heart of London. flexible workspaces and a range of amenities that will be implemented to enhance employee and client experience. In addition. replacing critical infrastructure assets and ensuring the most efficient use of space before the move. The new building at 5 Broadgate will incorporate four 60. However. which meant that “Project Twister” – equipping the campus for its stay before 2016.000-sq.

The business continuity plan needed to remain watertight. please search for this title on our Knowledge Center Online. For more information on this topic. This would identify efficiencies and reduce risk through effective coordination. This success has proved that this type of integrated model can work within any industry that relies on the continuation of services. Results collated from the reconfiguration report that all parts of the project have been delivered on schedule and within budget. 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. Peter Welsby is Mace’s Program Manager/ Operations Director. but would also not affect its commitment to innovation and better working practices. To achieve this. This responsibility and accountability was a key aim for UBS. As part of its CRE strategy. shared culture. This was achieved in just 12 weeks from start to finish – one month ahead of the originally agreed-upon completion date. It was this relationship and how it was united with the business that would determine the project’s achievability. 24 hours a day. Operating as one entity. • Business as usual. generate the most value for money and risk adverse solution. and Mace’s approach to the UBS vision was based on four core principles: • Integrated service route. the most impressive feat in the refurbishment element of the overall project was the complete overhaul of seven floors of UBS’s 3 Finsbury Avenue location in prepa- ration for the relocation of the business from Curzon Street. for UBS. it was identified that there were 133 business-critical proposed projects in the program pipeline. • Flexibility. focused development of people.The Global Integrator Model January/February 2013 | the leader 23 . with Mace as the sole point of contact across the project. tailored solutions. most importantly. an international construction and consultancy company. Full integration with the client was ensured with Mace and UBS project managers working side by side. UBS made assurances that any upheaval would not only not impact its day-to-day activity. the projects were dealt with very much as a “bolt on” to the day-to-day operations of UBS. UBS and Mace have been able to work toward common objectives and take their shared vision to market at a much faster speed. forward focused • Measurable in terms of results • Team centered. • One team. enable the company to continue to innovate during the program.The premise of UBS’s new model of real estate delivery was that it needed to be based on an integrated relationship. Property Management. leveraging bank-wide processes. UBS partnered with Mace. A remarkable fact is that more than a quarter of a million hours were worked without a single incident. UBS collaborated with partners to deliver solutions that were: • Client and risk appropriate • Commercially astute. investment and transparency. create true accountability and transparency and. The integrated real estate solution included all the benefits of a reduced overall cost base. In 24 months. Breaking New Ground . The inevitable moves and small works required to meet the changing needs of the businesses and the planned maintenance activities have all been implemented without disruption. combat the challenges. This need to innovate was vital. and the value of efficiencies demonstrated throughout the project equate to £1. these had to be delivered within a fast-track solution that would allow the moves to take place within the required timelines. A focus on quality of output and minimizing disruption to the work force was imperative. Without a doubt. incorporating best practices for landlord and supplier management • Change ready. A flexible approach was necessary to accommodate the needs of the business. About the Authors Nick Garniss is Executive Director CREAS Europe North/East and MEA.7m (5 percent) of the total spend.

The recession of the early 90s pushed large occupiers to look for ways to become efficient. Technology consisted of client servers and desktop computers running a basic financial accounting program. “It was A. multi-market services and global expansion. coupled with real estate providers that had an appetite for large. 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.” according to Bill Agnello. Kearney. Bain and Booz Allen Hamilton and other consultants that pushed corporations to outsource as a way to save on operating costs.Corporate Real Estate Outsourcing: A Transformative Look 20 Years Later by THOMAS bOGLE he 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 providers to grasp what would become a huge business expansion opportunity. a large real estate services company would have operated a few regional offices with a managed portfolio of 10-30 mil- T 24 lion square feet (929. building new offices. A desire among large corporations to outsource non-core functions. and CRE became a ripe opportunity for cost reduction and outsourcing initiatives.020-2. managing owned properties and trying to keep track of costs and lease data manually. who at the time was working with Baxter Healthcare and was an the leader | January/February 2013 .8 million square meters). Internal real estate departments at large companies had hundreds of employees scattered worldwide. planning and acquiring space.T. In 1990.

Madison was composed of more process-oriented real estate professionals. including IBM. This led to a lot of pressure on support groups to redefine their value add. “I remember when in my first meeting with our new CEO he asked me what we could save from real estate globally. 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.612 square meters) and within 12 months had expanded to facilities throughout the U. a non-real estate professional.” Other large corporations. I initially had no idea how to achieve those aggressive goals. Cushman & Wakefield.Key Milestones in the Evolution of Corporate Real Estate Outsourcing Sources: Trammell Crow.K. as Russell noted. Wikilnvest. NY Times. then in the CRE department with Bank of America. encountered the same challenges of reducing costs and improving performance while adding value to their company. In New England. remembers in the early 90s that providers were beginning to discuss providing services to clients typically provided in house. the company saved millions of dollars in operating expenses and reduced internal headcount. toward the end of the technology boom of the 80s and early 90s. “However. Jones Lang LaSalle. AT&T. Bizjournals. HewlettPackard and Digital Equipment. a FM assignment of a million square feet (92. “We had a senior vice president who was the head of international CRE at Bank of America. and they were willing to invest time in developing portfolio solutions – not merely executing local deals. was asked to take over Kodak’s global portfolio during that time. Newmark Knight Frank & National Real Estate Investor early driver of managing a large portfolio through outsourcing. CoStar. We were all under tremendous pressure to improve corporate performance. In a matter of a few months.-ft. broad business skills and for the most part had a broker mindset focused on the local deal. and I knew we needed help from the outside.” said January/February 2013 | the leader 25 . client. John Davis. But. while the provider ended up with a multi-million-sq.” said Russell. Digital Equipment decided to outsource facilities management (FM) at its corporate campus to Compass Management & Leasing. They lacked geographical coverage. one of my counterparts.903 square meters) grew to more than four million square feet (371. and I think I told him $500 million in operating costs and hundreds of millions in additional cash flow. Funding Universe. and large corporations were challenging their business models. For real estate professionals. There were no restrictions as to engaging all parts of the company in what became a major corporate-wide initiative to reduce occupancy costs. Wikipedia. In the process.” Bruce Russell. “Leveraged buyouts were a dominant school of thought at the time.” An industry milestone occurred when CB Commercial (now known as CBRE) acquired Madison Advisory Group in 1992. “The service provider community wasn’t ready.

(27.Davis.” said Gary Beban.” According to Cushman & Wakefield’s John Santora. The entire infrastructure that exists now had to be put in place. we had little information about the properties and very little data to make decisions. who at the time was the President of CB Commercial. a dynamic and fastgrowing industry was born.’ I made a career decision in 1994 that the future of CRE might be on the service provider side and joined Koll Management Services.” “The service provider community wasn’t ready. so that was a challenge we and others faced.” . It was just something we had to do.” As a new century dawned. We also had clients who wanted to outsource but did not have complete control over all of their real estate. who is now at Johnson Controls.-m. “In those early days. who is now a partner with Capstan Advisors. Lynn Kious. systems and standardized processes to serve clients. Brokerage companies weren’t that strong with processes and standardization. They lacked geographical coverage. In the early 90s.” Kious. broad business skills and for the most part had a broker mindset focused on the local deal. who was with First Interstate Bank. “Guys like Bruce Russell at Kodak literally took us to school. we saw that this business was for real and we began investing in people.” CRE professionals in large firms were under pressure to reduce costs and create shareholder value. saw that the “transfer of knowledge from the provider community to the clients was evident from the beginning. “We were creating the business as we went along with their help. In the mid-90s. and the provider community saw opportunity. The demonstrated costs savings. brought us in and had training classes on how we should think about their portfolio in order to provide services to them. Winning a 300. increases in operating efficiencies and knowledge transfer were increasingly demonstrated across industries.Bruce Russell 26 the leader | January/February 2013 . 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. Baxter Healthcare hired Trammell Crow for FM services. most real estate professionals sought to win an assignment for a single property. “He came to me one day and said ‘We need to keep these vendor guys out of our shop. but our clients were increasingly demanding a more sophisticated approach. no processes and little standardization. Of course we had virtually no infrastructure in place for these large assignments.871-sq.) property management assignment from an investor-owner was a reason to place a tombstone advertisement announcing the win.000-sq. they are trying to take our jobs.-ft. But when companies began to entertain large portfolio assignments. dozens of firms were taking major steps to outsource their CRE functions.

but I think the clients and our competitors believe that we still all have a long way to go. We have evolved from an industry less focused on the real estate investor community to one increasingly focused on the user and occupier community.“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. This approach.” Some observers noted that collaboration among service providers is growing as clients select more than one provider and sit them adjacent to one another with high expectations for cooperation and collaboration. the outsourced model for CRE services has become “the way things are done. it was clear that many of the world’s largest companies were signing contracts with service providers and outsourcing significant pieces of their real estate and facilities organizations. Bogle is EVP & Group Head. please search for this title on our Knowledge Center Online: • Service Delivery and Outsourcing: Strategic Alignment of the External Resource Network January/February 2013 | the leader 27 . So what does the future hold? “I guess we are in the middle phase of our development as an industry. which is innovative and not fully evolved. Johnson Controls bought USI. he has had leadership roles within the industry’s leading firms. “One-stop shopping” became the mantra from sales people from the provider firms. These multi-billion-dollar investments and the fee business they represented are evidence CRE outsourcing is a growth industry – with enormous residual potential. Now that larger providers had assembled significant footprints of offices. “I think CRE outsourcing has created an entire new service line. In 2005. We have made great progress. Other clients preferred best-in-class providers by function or region and retained multiple providers. By the mid-2000s. adjacent to the clients they were serving. and the provider industry will be pushed to develop innovative approaches to increase productive use of increasingly costly space. and some companies experimented with this approach. 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. global contracts were established for multiple services. CBRE acquired Trammell Crow in 2006 and gained stronger project and facilities capabilities. As the confidence in the capabilities of the providers increased. In recent years.John Davis By 2000. These firms have been in the market for an integrator – a company that integrates the data and processes of multiple providers across the globe. some clients who tried the fully integrated solutions have begun to rethink this approach and either brought some functions back inside their organizations or segregated the work among multiple providers based on geography or functional expertise.” and no one believes the clock will turn back on this paradigm shift in real estate services delivery. an entire new service component of the company that is a big driver of our business and has helped in the globalization of our company. Roughly two decades after the inception of outsourcing by visionary companies and industry leaders. I don’t think you are going to see two.” In the past 24 months. it was common to walk into any large CRE department and see service provider employees sitting on site. Jones Lang LaSalle acquired Compass Management and Leasing and strengthened its corporate services offering.” said Santora. In 1998. Others noted that the focus on efficient use of workspaces will continue to be an issue confronting large users. About the Author Thomas W. Technology tools were developed and acquired to service the needs of global portfolios. “integrated solutions” or the provision of multiple services under one contract was being offered by providers.and three-people CRE departments for large companies as much in the future. 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. The provider community was in the middle of a wave of consolidation. a smaller firm specializing in real estate services to corporations. Strategic Portfolio Solutions for Studley. Likewise.” said Davis. a hybrid model for service delivery has developed and been pioneered by firms like Microsoft and Accenture. as firms were acquiring both functional and geographic capabilities to serve the expanding corporate client base.” . With more than 20 years as a CRE and facilities professional. For more information on this topic. 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.and three-people CRE departments for large companies as much in the future. “I don’t think you are going to see two.

Corporate innovation is the engine that propels businesses to success in today’s knowledge-based economy. workplace design alone will not help companies become more innovative. shared vision. Strong Leadership and the Right IT Platform Pave the Way for Innovation BY LUIGI SCIABARRASI. polled more than 1. more than 40 percent identified challenges with not having adequate technology and a risk-adverse corporate culture as hampering innovation. real estate has to be part of an overall corporate strategy that includes strong leadership. Perhaps the more illuminating results of the survey. 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. with 68 percent of respondents rating the quality of the work environment as a contributing factor to 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 Innovation The transformational changes occurring in workplace design can address many of the challenges to innovation. as well as a corporate culture that enables risk taking.A Shared Vision. Open floor plans with common collaboration and social spaces encourage greater 28 the leader | January/February 2013 . KIM COTTER FUCHS AND RICK CLEVELAND t is no secret that today’s leading corporations are intensely focused on ways to foster greater creativity and innovation within their work force. The changes taking place in the physical work environment are surely helping companies innovate better. Of those surveyed. technology and infrastructure that enables the business to address real customer needs. However.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. However. conducted at CoreNet Global’s Spring Summit in San Diego. 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. center on the current challenges organizations face in getting their employees to innovate at higher levels. 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. 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. For true innovation to occur. These results support what many current I organizational and leadership management experts believe when they discuss the need for corporate innovation. This presents challenges for many corporations that have a larger percentage of remote workers who are not necessarily in the office daily or weekly. get products to customers faster and tap into new and emerging markets. such as the physical work environment. engaged employees. however. The survey also identified contributing factors to innovation. Companies that consistently innovate – and do it well – can create a significant competitive advantage.

to experiment and to champion change. The first is to set the stage. in the right location and with the right tools. Workplace design. Information management and technology is also critically important to supporting an innovative atmosphere. must be accompanied by an overarching corporate strategy and culture that encourages and enables employees to innovate. The second is to coach team members by effective communications. Wikipedia defines culture as the “attitudes. and mobility programs and hot-desking promote the new ways in which we work and how technology is used in the work environment. This top-down approach provides the framework that allows creativ- Leaders need to create the opportunity for effective collaboration. • Leadership. communication. it is still only one part of the total. which theoretically leads to better ideas and ultimately more innovation. and the best collaboration happens face-to-face. • The Right Technology. and the best collaboration happens face-to-face. This includes understanding how decisions about opportunities are made and how to provide the thought leadership to influence direction. a shared vision. one of the biggest challenges facing organizations today is creating a culture that supports and embraces innovation. While change leadership is scary to some. the organization cannot simply force its employees to innovate because they are in a different environment. This model establishes the foundation of an empowering leadership style that creates a platform for maximum team performance. However. Creating the atmosphere for collaboration means managing teams and defining a clear set of goals and expectations to maximize performance on a shared vision. ity to happen through cultivating. playing. enabling risk taking and harvesting the spark of innovation. which includes identifying the right team members and creating a positive operating structure. venturing. “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). experiences. today’s new work environments can provide the corporation with the right framework for innovation to occur. Maximizing team performance relies on two major leadership functions. recognition and the right IT platform. Providing a more tolerant approach to risk taking contributes greatly to a culture of innovation. Other important factors include clearly defined objectives. If done properly. Distinguishing between core and enabling technologies January/February 2013 | the leader 29 . leadership. These new programs and designs are in large part focused on helping foster improved employee engagement and collaboration. the question then becomes. Leaders need to create the opportunity for effective collaboration. with the objective of fostering innovation. The physical workplace can only provide so much. in the right location and with the right tools. Another leadership element is the opportunity to take risks.Figure 1: Barriers to Innovation employee interaction. Necessary Factors for Achieving Successful Innovation As the survey results indicate. which includes clearly defining goals and objectives and providing an atmosphere of positive and constructive debate.” Given this. by embracing experimentation leaders send the signal that it’s ok to take risk. All of these require consistent senior executive support. Successful leaders create the right environments – both physical and cultural – for their employees to work. beliefs and values of an organization.

education and willingness to accept criticism and feedback. asking the Investor Services group. Enabling technology is associated with infrastructure and assists the core technology in doing what it does best. In delivering work environments for business units across the organization. Educate senior management. implementing a successful strategy. Value-Adding Role of the Future works by trying it themselves. CRE views real estate not as an endnot occur without change. Business sible for CIS’s Global Thought Leadership Initiative. Understand for what CRE is solving. CRE’s change leadership tion foster innovation goes beyond role is to educate senior management just delivering a physical environment. that innovation in the work force canAt Symantec Corporation. while enabling technology provides the means to implement core technology. inclusion. Innovation Initiative. ing innovation in the workplace must themselves be innovaEnterprise Leadership: tive. CRE departments charged with fosterour Knowledge Center Online. Showing the company how a new workplace environment The Collaborative. sees the successful implementation of an innovation strategy within CRE. inFrastructure The CRE Role 5. At Symantec. While its main role is vation occurs when there is a cultural environment that supports the delivery and ongoing maintenance of the workplace. 2. Lead by example. Any change must communicate ents on key trends and strategies in CRE and is responthe shared vision to employees and outline its benefits. must take a leadership role Rick Cleveland is the Managing Director of Research & Strategy for Cushman & Wakefield’s Corporate in educating business units on the change process and maintain a Occupier & Investor Services group. it is nearly impossible to deliver the effective workplace solution. but as an enabling body that the full support of senior management. where he is environment and having a shared vision are the first steps in responsible for the company’s global workplace solutions.will help leadership focus on tools that will enable innovation. Always beta test. 1. CRE can address upfront any issues technology & prior to full implementation. while others have goals centered on effective and efficient workplace Kim Cotter Fuchs is an Account Operations Director for Cushman & Wakefield’s Corporate Occupier & environments. she is the team leader for CIS’s Global do are the first steps in running any change management process. ment. contribute to a perceived significant benefit to the customer in terms of end products and are difficult for customers to imitate. is critical. As previously stated. If the company Figure 2: Critical Factors in Achieving Innovation 30 the leader | January/February 2013 . it will go a long way toward the successful implementation of one across an organization. Without these. innois part of an overall company’s foundation. the lack of a shared vision and the proper the cre shared change up-front work not being done. He advises CIS clipositive outlook on the end result. By innovation vision leadershiP challenge conducting workshops and collecting employees input and beta-testing concepts prior to full implementation. units will be more likely to understand and embrace change with a positive mindset if CRE is a trusted business partner. CRE’s role in helping the organizaAbove all. Some organizations have clear and specific goals of reducing cost. and CRE can earn this status through open communication. For companies that do not have an inherent culture of change leadership and innovation. it is crititrial and error and continuous improvement and where employees cal that CRE be able to see the entire picture of what’s needed for are free to voice their opinions without fear of repercussion. Many wellintended strategies have failed because of poor change leadership skills. Symantec’s strategic approach is rooted in five key About the Authors considerations. engaged employees. Communicating with the organization. Core technologies provide potential entry to a variety of markets. CRE. Knowing the corporate and business objectives of proposed changes in the work Luigi Sciabarrasi is Vice President of Real Estate & Workplace for Symantec Corporation. culture and the overall mindset of employees play in this process. CRE has taken critical for senior management to understand this and make the clear steps to not underestimate the role that company manageorganizational changes that foster true innovation in its work force. Physical workPlace 4. It is companies to innovate successfully. as the manager of change in the physical environment. In addition to managing key right questions and understanding what CRE is being asked to client accounts. change can be difficult. please search for this title on 3. along with promoting an organizational culture that encourages risk. a shared vision and all solution to the innovation issue. Establish trust between CRE and business units. Core technology supports and provides leverage to achieve core competency objectives. For more information on this topic.

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redesigning the organization may be viewed as just changes to reporting relationships. MCR. facilities and workplace services to internal customers. without addressing impacts to how work flows among people. Our experience indicates that while individual improvement projects can achieve targeted results. Internal drivers may include a restructured corporate operating model. Internal and external events often drive the need to change the way services are delivered across the enterprise. External drivers may include cost-reduction pressures. Understand the Existing Service Delivery Model The service delivery model is defined as the overall construct that provides real estate. whether pushed to action or proactively acting. a holistic approach to transforming how CRE services are deliv- O ered can have a much broader impact and greater sustainable value for the enterprise. SLCR. are more likely to achieve sustainable increases in value contribution to the enterprise. In contrast. industry consolidation or regulatory requirements.Transforming CRE Service Delivery: Unlocking Sustainable Value for the Enterprise BY FRANCISCO J. design and implement – as shown in Figure 1. 2. An effective methodology is comprised of three phases – assess. MARK KLENDER AND LILY MISKIMMIN rganizations continue to explore new ways of improving how services are delivered to the broader enterprise. For example. Start with a Holistic Methodology A methodology provides a roadmap for the transformation from start to finish. in addition to all elements of the service delivery model. GRIFFIN JAMES. 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. The approach can be applied for major transformations or as a structure for making incremental adjustments in context of the overall service delivery model. middle and end. the corporate real estate (CRE) function is no exception to this trend. 1. As one of the core enabling functions for many large entities. Applying a holistic approach creates a framework for the change efforts around which activities and people can be aligned. CRE can make performance improvements that can add significant benefits to the bottom line. This includes the following elements: 32 the leader | January/February 2013 . organizations often consider improvements to service delivery independent of each other. ACOBA. This constrained approach focuses on the output without understanding the broader context for the change or the domino effect one change can have on the overall CRE function. implementing and using new information technology is often looked at as simply a way to automate existing processes. M&A and divestiture activity or recognized CRE underperformance. as opposed to enabling performance measurement and potential cost savings. Similarly. Notwithstanding the drivers for change. initiatives that consider a transformation’s beginning. Whether through organizational redesign or strategic outsourcing.

Manage Organizational Transition 4. Establish a Continuous Improvement Program Source: Deloitte • Organizational structure • Sourcing/outsourcing model • Business processes • Information technology platform • Performance management To properly rethink these elements. Prepare for Implementation  Assess change readiness  Develop training and training plan  Develop implementation plan Implement 1.” .Chris Staal. commented on his real estate and facilities (RE&F) organization’s recent reengineering efforts. thereby increasing sponsorship for the transformation and kick-starting change management efforts. Joe Barile. considering all aspects of the service delivery model.S. 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. 2. focused on aligning the vision and strategy for CRE with the business strategy for the broader enterprise.ppt . gaps and opportunities for the future state. Implement Communications and Change Management Plans 2. it is important to understand the way things are done today. 4.. Initiate Change Enablement 4. Develop the Baseline Create a Shared Vision Define Future Service Delivery Model Develop Strategy and Business Case  Conduct gap analysis  Develop and prioritize opportunities  Conduct cost/benefit analysis  Develop preliminary road map  Determine communications strategy Design 1. then we could go back to the vision and strategy. cost. Implement Future State Service Delivery Model 5.. but everybody that is going to participate in the journey is bought into it. Establish a Future State Vision and Strategy for CRE An effective transformation is guided by an overarching vision and strategy.” This model leveraged a strategic mix of internal and external resources. Corporate Manager of Administrative Services for Toyota Motor Sales U. By engaging specific stakeholders in the visioning process.” 3. Develop a Framework 2. structure and decision-making approach Doug Beebe. Conduct Knowledge Transfer 3. we were better able to prioritize our initiatives and determine where we should invest in the near term. 4. Design Future State  Operating model and organization  Outsourcing model  Processes  Information technology  Performance management 5. Track Performance Against Original Business Case 6. 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. “…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. quality. Consider Interconnections and Broader Implications The overall service delivery model should be considered in Is it Time for Transformation? Are you experiencing one or more of these symptoms? • Service delivery challenges (i. This level of engagement 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. Build the Team and Establish Transition Management Office 3. resource. January/February 2013 | the leader 33 JPMC_CRET_Overview_Oct2006. VP and Global Head of Real Estate & Workplace Services for Thomson Reuters. seek compelling opportunities and catalysts for a broader change. the new CRE organization adopted a flexible resourcing model to “be able to deliver effectively and efficiently right out of the gate.A. Toyota Motor Sales leveraged the retendering of their service provider contracts to jump start their change and aligned a broader transformation with the restructuring of their service provider relationship. concerns can be addressed up front and a shared vision of the future developed. “You need to evaluate the as-is condition as quickly as possible. said his organization spent the first 60-90 days focused on the development of an extensive portfolio.FIGURE 1: CRE Service Delivery Transformation Methodology Figure 1: A Time-tested Transformation Methodology Transformation Methodology Assess 1. timeliness. technology and external contract baseline before launching the redesign and restructuring activities. As part of this effort to align with the business.” he said. SVP of Global Real Estate and Client Services at AIG.2 . “By establishing an understanding of the current state.e. This can enable effective evaluation against internal and external benchmarks and leading practices to identify strengths. 3.

Leveraging the roadmap developed during the assess phase. HR.” he noted. a change in each the entity into which the Organizational Structure Process element has corresponding CRE organization reports.3led by CRE and included representatives from finance.FIGURE 2: CRE Service Delivery Transformation Interdependencies developing the future state. The TMO addresses three key needs: • Program Management. JPMC_CRET_Overview_Oct2006. team in place is critical to Figure 2: Examples of Transformation Interconnections This enables understanding achieving sustainable results. with a focus on quality and results management. provides a foundation on which CRE can build the future strategy. legal and physical security. This often results in the newly redesigned nization. drive day-to-day activities. Organizations should also model. If parts of the service delivery model are not addressed. A TMO integrates the many activities needed to transition Figure 3: Transition Management Office Components the aspects of CRE. Rather than excludestablished that the best way to effectively drive significant ing elements that lacked clarity at the time. A vice delivery transformation holistic approach can identify is to establish a steering Sourcing/Outsourcing Organizational Structure interconnections early and committee comprised of Process incorporate them in the future customers and leaders of Performance Management state design. Strong change management and communication strategies tailored to the organization’s culture should be established. was “You need to have your transformation model in mind but be . which are not aligned with the new service delivery “owners” in the transformation. This committee provided from an organizational. a holistic approach can be used to develop a roadmap outtransformation. there “We also included senior stakeholders from our real estate service is a high likelihood challenges will emerge in implementation. Get the Right People Involved Transformation requires significant and lasting commitment on 6. process or technology perspective. One of the important but he was challenged by drivers behind the CRE the high degree of organizatransformation at Thomson tional uncertainty that accompanied AIG’s major restructuring. This will encourage a sense of ownership among stakeholders and bring them along as part of the transformation journey. Sourcing/Outsourcing impacts on other elements of A leading practice for serPerformance Management the service delivery model. willing to make adjustments along the way. Even if specific elements cannot be addressed in the near identify a program manager to coordinate and manage the term. how the elements interact This starts with leadership. whether CRE integration steering committee. while implementing a redesigned organizational model because If changes will be made to leadership in the CRE orgaof time constraints. • Communications and Change Management. This critically positioned individual should lining when each component will be transformed. As illustrated both within CRE and from A transformation here … … can have an impact here in Figure 2. be part of the working team and lead a transition management office (TMO). established in the design phase. provider and our CRE management consultant on the committee to We have seen organizations delay or not address process redesign make sure all key perspectives were at the table. would be to deploy a ing the need to evolve with the broader organization. other enabling functions Information Technology Process Barile understood the that can set priorities. the TMO guides the planning of transformation activities and the measurement of results. the TMO continually aligns transformation initiatives with the future state vision and strategy.ppt 34 the leader | January/February 2013 -4- JPMC_CRET_Overview_Oct2006. The TMO. 5. anticipating the challenges of integrating Reuters. while concurrently addresstransformation program that emphasized flexibility. AIG developed a change in an organized manner. Leverage a TMO to Help Realize Desired Benefits the part of leadership and the organization. IT. manage risk. with each other. Performance Management in his CRE transformation. it is important to do this as early as possible in the organization reverting back to the previous ways of delivering process so that the new leaders are able to see themselves as services. Having the right A carefully coordinated transformation is critical to realizing FIGURE 2: Standard TMO Components the value expected from the new CRE service delivery model.” he noted.ppt . guidance and governance for the CRE-related initiatives. In addition to managing the budget and schedule. Reuters was the acquisition of the Thomson Corporation. Staal following the turmoil in financial services. advise Organizational Structure need to consider all parts of on achieving the vision and Sourcing/Outsourcing the service delivery model bring a broader perspective.

This includes assessing the change readiness of the CRE function. National Manager of RE&F for Toyota Motor Sales. yet unproven center-led function. prioritizes and tracks issues affecting the transformation. • Accelerating the design phase and short-cutting implementation planning to demonstrate action and earn quick wins. Mark Klender is a Principal with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Shared Services Team. “Open communication across the leadership team was necessary to ensure they were all on the same page and communicating the same information to the organization. but for day 1 we made sure we had all hands on deck. Common pitfalls include: • Getting a late start in planning and preparing for implementation activities. Communications and change management are often deprioritized by companies but are important for an effective transformation.” Many organizations underestimate the time commitment. About the Authors Lily Miskimmin. you only have one chance to make a first impression. Prioritization involves identifying interdependencies and establishing a logical sequencing of initiatives that sets an appropriate pace of change for the organization. Throughout the transformation. 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.” said Staal. SLCR. under the auspices of other CRE or company initiatives. Strategy & Operations Practice. Acoba. develops risk mitigation plans where needed. resulting in a delay in transformation overall and a loss of momentum • Not leveraging work that may already be underway or completed. resourcing short-changed and interdependencies unanticipated. resources and experience needed to bring about transformation.• Risk and Issue Management. Deloitte Consulting LLP. For more information on this topic. and identifies. 7.” Our experience indicates that effective and sustainable ser- vice delivery transformations are approached holistically. AIG and Thomson Reuters were undergoing significant enterprise-level restructuring concurrent to transforming their CRE service delivery models. MCR. Many of the challenges organizations experience during implementation are because of planning pitfalls. This helped from a buy-in perspective because people had context. resources and timing. both strategically included representatives from legacy organizations in the new organization design. “As a new. Service Delivery and Outsourcing: Strategic Alignment of the External Resource Network January/February 2013 | the leader 35 . Authors’ Note: We would also like to thank Joseph Barile (AIG). The TMO puts in place the structure. is a Senior Manager with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Real Estate & Location Strategy Team. Douglas Beebe and Myra Chung (Toyota Motor Sales) and Christopher Staal (Thomson Reuters) for sharing their CRE transformation insights. significant risks and issues will emerge. The TMO proactively identifies risk. it is really a journey that will continue to evolve with the CRE organization and the business over time. leadership and governance to sustain an effective transformation and achieve the envisioned results. A critical part of Toyota RE&F’s change management approach was to engage their associates in the design of the future state strategy. developing training materials and plans and creating an implementation plan. well planned and appropriately resourced. Figure 3 highlights the standard components of a typical TMO. In doing so. key elements can be missed. This oversight can result in unintended overlaps and potential conflicts in priorities. To effectively prepare for implementation. Francisco J. It is important to remember that while the “official” transformation has a start and target end date. “Over time. Leveraging a time-tested approach for transformation and understanding the potential pitfalls will lay the foundation for future achievement. Prepare for Implementation Planning for implementation begins during the transformation’s design phase. we adjusted our resource mix to optimize service delivery. Transformation activities need to be appropriately scoped and prioritized. Preparing for implementation should be embedded into the design of the future state. please search for this title on our Knowledge Center Online. Manager. “Everybody was involved from the beginning.” said Myra Chung. is a member of the Real Estate & Location Strategy Team.

We need to start focusing on designing for the well-being of the occupant. And the Living Building Challenge has cast a new light on the importance of eliminating chemicals from the workplace. and LEED 2012 will address a broader range of issues. but let’s face it. Designing sustainable environments is a good start. we were a manufacturing or agricultural-based work force. but their carbon footprint as well. CID. A Health and Technology Challenges in the Office Not that designing sustainable buildings isn’t important.3 We need to get people moving again not only to stimulate their minds but their bodies as well. At the same time. People were active and on the move. ASID. LEED AP ID+C lthough designing sustainable environments.The Rise of the Human Factor: Workplaces for Well-Being BY KAY SARGENT. 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.2 A recent study by Healthways and Gallup has shown a direct tie between one’s personal well-being and productivity. 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. 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. BIFMA e3 level is evolving as the new standard for measuring the sustainability of furniture. Until recent decades. 36 the leader | January/February 2013 . Many clients are looking to reduce their overall square footage to not only reduce their costs.1 A recent Gallup study showed that up to 72 percent of people are sleep-walking through the day. The focus today is less on checklists and more on common sense sustainability. including walkable sites and ergonomics. but sustainable practices have evolved and new guidelines have emerged. IIDA. driving down cost and integrating rapidly emerging technology have been our focus in recent years. People were never meant to sit for long periods of time. ultimately we are still designing for people.

January/February 2013 | the leader 37 . One size misfits all. If you follow the concept that history repeats itself and is cyclical. But what is starting to become apparent is the negative impact technology has had on us as well. 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. organizational structure and culture all factor into the DNA equation. throwing people into an open space does not equate to collaboration. Our challenge is finding each company’s DNA. Reusing existing buildings to accommodate varied occupancies and uses will be essential to accommodating the emerging work force and re-energizing our people and our communities. Just because we can be accessible 24/7 doesn’t mean we want to be. Activity-based design is being introduced as the new style of work. The ping factor – the constant beckoning of technology – is reducing our efficiency and productivity – not to mention our sanity. Designing for All Types of Work Creating 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. demographic groups and generations in the workplace today? We give people choices. So how do we accommodate all the various work styles. Not only does it impact the mechanical system. We are on the verge of a total loss of privacy and the ability to concentrate. We need to get to the point where we are running technology. and demographics. engaged work force is essential. Bonds build trust. the Millennials everyone has been berating) are poised to take us into the new cycle as the heroes. and we have rapid access to massive amounts of information. versus technology running us. Having 50 people in the space one day versus 150 the next impacts the way we manage our facilities. it also impacts parking. They are the ones who could fulfill the balance between high tech and high touch that we are beginning to see emerge with the organic and hand-crafted movements. After all. No longer are people expected to go to the office and sit in one spot all day like potted plants. Buildings were not designed for the varied occupancy we are now encountering. The positive impact technology has had on workplaces today has been well documented. 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. there needs to be a shift in how we design and manage our facilities to handle an increasingly mobile and flexible work force. neither of which bode well for innovation. Finding ways to have a healthy.Today. Work today is dynamic and can vary day to day and hour to hour. The key is giving people choices and spaces that stimulate their minds. and there is no one perfect workplace. Figure 1: The Pendulum Effect. And per the archetypes cycle – the generation to follow the Millennials – whom I’ll refer to as the Digital Natives. regional influences. which leads to open collaboration. Creating a varied work environment through activitybased design will help engage employees. it often results in mindless chatter that causes some people to simply shut down. the most flexible thing in any environment isn’t the walls or the furniture – it’s the people. Our aging inventory of buildings will need to be retrofitted to accommodate new work patterns. strong desire to participate and make a difference. If the archetype cycle holds true. they are forgetting the goal is ultimately to improve it. We know that healthy. And the stress of being always on with constant distractions is negatively impacting our productivity and health. are posed to be the Age of the Artist. which fosters innovation. Fewer people can produce more work in a shorter timeframe. Our buildings need to accommodate the multiple-faceted aspects of how we work today as well. Along with the new ways of working. work styles. After all. bodies and imaginations. Their high expectations. The Millennials (yes. 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. happy and engaged workers are far more productive and willing to work longer hours than employees who are disengaged and suffer from presentee-ism. because so many people are focused on trying to measure productivity. security and overall operations. clean and filtrate our facilities. People need time and space to think. and yearning for social action set them up ideally for the task. improve their wellbeing and increase productivity. balanced with time and space to build bonds with co-workers. hours of operation. With a greater number of workers in denser. the Age of the Hero will follow. we are in the age of crisis.

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 Yes cost is still a factor. The most valuable resource we have is our people. LEED AP® ID+C. 2 http://www. They are the generation that could bring the rise of the human factor to fruition. we need to help our clients move in a positive direction through forward facilitation. we don’t need to try and control or manage it.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. please visit www. ASID. We need to design spaces that support the way we work today and empower us through employee engagement. I’ll also argue that to truly move forward. Design and Workplace Strategies for TEKNION. She has more than 26 years of experience as a practicing design professional and is an active member of CoreNet Global. In our new reality. For more information. Technology will continue to rapidly evolve in ways we can’t even imagine. Helping our clients embrace emerging work patterns and preferences to truly empower and engage their employees will unlock their true potential. we need to harness it. And we can’t lose our focus on designing sustainable environments. change is part of everyday life. and we cannot forget that. Editor’s Note: CoreNet Global advocates the quality of working environments and work experiences as socially responsible corporate practices. teaches at the university level and has authored several articles and white papers. IIDA. Workplace: Shifting Work Styles Are Creating Shifts in Where We Work The Consumer-Led Workplace: Lessons from Facebook’s Vending Machines Source: William Strauss and Neil Howe Research 38 the leader | January/February 2013 . 3 Healthways Well-Being Assessment Results. but we can get the impact it has on us in check. She also lectures regularly. Source: William Strauss and Neil Howe Research Figure 3: Demographics of the Future Workforce (Birth-Year Ranges) For more information on this topic. The spaces we are designing are meant to support us. About the Author Kay Sargent. please search for this title on our Knowledge Center Online. CID. but we need to balance it with the value of design and empowerment. we need to abandon the notion of change management.com/your-desk-job-is-killing-you-thetruth-about-sitting-down-infographic/. is Vice President Architecture.com/2011/11/18/you-asked-ianswered-a-social-workplace-starts-with-culture-and-engagement/. Sources: 1 http://www.diygenius. CREW and IFMA. the new focus should be on the rise of the human factor. 2010. but we can ensure that we value our own personal sustainability and well-being as well.thesocialworkplace.org.corenetglobal. not the other way around. Today. Change is inevitable today.

2013 GlobAl AwArdS ProGrAm CoreNet Global is pleased to announce the 2013 Global Awards Program.corenetglobal. Economic Development Leadership Award and the Industry Excellence Award – begins now and ends 15 February 2013. size or global region. The 2013 Call for Nominations for three awards – Sustainable Leadership Award.org/Awards/Submit EntEr now! thAnkS to our AwArd SPonSorS: . which encourages greater participation from all organizations regardless of industry sector. www.

” said Wagner. services and devices. as with any company. the working environment at Microsoft is intellectually challenging. is a busy person. with 214 sites and 5. we have to prioritize our investments and our costs with our global priorities.end user proFile BY CHELSIE BUTLER Microsoft’s corporate offices in Paris Microsoft EMEA’s Innovation Leader: Susan Wagner In charge of managing Microsoft’s portfolio in Europe. service provider management and financial accountability. both at a more enhanced view of the consumer level and at the enterprise level.1 million square feet (473. which is a global initiative to evolve the previous CRE Vendor Model and provide a more effective service delivery function – one that is more strategic 40 the leader | January/February 2013 . collaboration and a strong drive for excellence. Susan Wagner. the company rolled out its Integrator Model. “As far as what’s influencing our real estate strategy today.806 square meters). As Senior Director of Real Estate and Facilities EMEA. Improving Service Delivery At Microsoft. Working at Microsoft According to Wagner. who has been with the company for 14 years. Middle East and Africa in 69 countries. 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. “The environment is energizing. culture and business. portfolio management and long-range planning. capital projects and real estate transactions. Last October. Its main business drivers are its clients and consumers. She and the rest of the CRE team are in charge of client relationship management and business alignment. Microsoft’s corporate culture is one of innovation. 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. Wagner – along with her 40-person corporate real estate (CRE) team – is in charge of 15 percent of the Microsoft’s global portfolio. external service providers are typically involved in the execution of facilities management.” she said. as well as the business drivers focused on expanding the company’s breadth of software.

such as information technology and human Susan Wagner “The environment is energizing. January/february 2013 | the leader 41 . it plays a key stakeholder role as part of the global team.” said Wagner. Wagner says there will be much further development to link and collaborate with other teams that have an impact on CRE and vice versa. “We’re looking at areas related to energy and carbon savings.” said Wagner. Wagner served on the Program Review Committee for the Paris Summit in 2011. Although Microsoft’s CRE team is not the sole owner of the company’s sustainability initiatives. “Our virtual engagement is much more enabled by technology changing the ways people work and interact to meet their business requirements and innovation to move forward. “There are different levels of impact we can have. changing out our lighting for more efficient fixtures – all things that work toward our sustainability goals in reducing Microsoft’s carbon footprint.” resources. moving to composting where we can. but we are implementing the basics of recycling. “Employee experience and productivity are key contributors to our workplace design.” The team issues an internal customer satisfaction survey annually designed to provide feedback on how the team is doing in a number of categories. 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. and improved communications will allow our CRE team to spend more time on strategy and planning. she has been part of CoreNet Global’s France Networking Group. develop networks and share knowledge. and she gave a presentation on Microsoft’s Global Integrator Model at the London Summit last fall.end user profile in supporting Microsoft’s clients’ business goals and provides greater value both globally and locally. the result will be a more strategic alignment of the portfolio with the needs of the business. There is a range of collaborative spaces and focused spaces – what Wagner deems a “no-one-size-fitsall workplace.” she said. “We’re going to see major shifts as a result of the overall connectedness people have.” A Look Ahead For her team. As a Paris resident for the last two years. 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. As far as CRE in general.” she added. which offers an opportunity for CRE professionals in that area to learn. “It will put in place a global program management vendor that will be responsible for coordination and integration of underlying service providers. Ultimately.” Workplace and Sustainability Microsoft’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.” Link to CoreNet Global Wagner has been actively involved with the organization for several years and is planning to achieve her MCR certification this year. “This model will provide more consistent and improved delivery.

“Schedules can be very demanding and hard to meet. which he says can be challenging. obtains projects and negotiates contracts. After much traveling from Atlanta to various cities in China. where he began to spearhead the firm’s migration into the China market and to provide more effective communication and efficient service with the firm’s clients in the Asia market. important aspects of his job include understanding the local culture and needs and delivering the appropriate services to meet those needs. more transparent and more global (see cover story on page 12). As architecture has always been Xue’s dream. These LDIs typically focus on the projects’ engineering aspects. Both parties work closely together throughout all phases of the project. he prepares the firm’s yearly China business development plan and budget. 42 the leader | January/February 2013 .” he said. In his current director role. 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 perspective – and then serves as the liaison between the tvsdesign team and the Chinese local design institutes (LDIs) during the project’s entirety. he explores prospects. In addition.” As far as the future. Xue also travels all over China on a regular basis meeting with prospective clients or attending opening ceremonies on completed projects. he very much enjoys his career. he moved back to China two years ago and is now the firm’s Asia Pacific Director.SERVICE PROVIDER proFile BY CHELSIE BUTLER Beijing New China International Exhibition Center Yaomin Xue: tvsdesign’s asia Pacific Manager – aKa liaison extraordinaire Yaomin Xue started his career with tvsdesign in 1999 as the Asia-Pacific Manager based in Atlanta. meeting with clients and partners. Xue feels that the work force in China will be more educated. including structural/MEP services during the design development and construction phases. and we need to stay flexible. particularly in the first few years. “Another challenge for my team is delivering services on time in such a rapidly growing country. According to Xue.

and recycled water is used in the property’s landscaping. expected to open in 2015. the Beijing New China International Exhibition Center (left). the future installation of solar panels. “and we use local materials and energy-saving solutions as the foundation of our designs. it won several major commissions. sustainability and energy savings are always considerations in our proj- Yaomin Xue which was completed in 2005. A flat roof was included in the project for “Another challenge for my team is delivering services on time in such a rapidly growing country. and we need to stay flexible. As far as the corporate office building workplace is concerned in China. January/february 2013 | the leader 43 . Xue said he was impressed with the firm because of its broad project portfolio.SERVICE PROVIDER profile Sustainability and Workplace Trends The firm’s approach provides top-quality design across all markets. tvsdesign was awarded the design of the Ningxia International Convention Center. Connection with CoreNet Global Xue became a member of the organization in 2002 and has attended many Atlantabased events. the mixed-use Suzhou Modern Plaza in 2010 and the Tianjin Meijiang Convention Center and Galaxy Mall in Tianjin. low-energy glass was used for the curtain walls.S. home to the China-Arabic States Economic Forum. convention center. and plans to attend the Shanghai Summit in March. Responding to the need for flexible workplace designs. including the Dalian Monumental Tower and master plan in 2009. and more than 50 percent of its designers have obtained LEED accreditation. employees tend to appreciate naturally lit. the floor plates are smaller. as well as the Singapore Summit in 2007. which eliminates the need for artificial light during routine maintenance and booth set up during daytime hours. and flexible layouts are a priority. The core-to-window depth of the floor plate is shallower than a typical U. hotel. EMEA and Asia Pacific. which encompasses retail. tvsdesign has become truly global. Responding to local culture to some extent. He also attended the first Summit in Shanghai in 2004. with offices and projects in the Americas. and in the last decade. Similar to the U.S. open workspaces with flexible layouts that reflect their local culture. In 2011. domestic floor plate – usually nine meters – allowing for more energy-efficient lighting solutions. office and mixed-use projects. but also to emerging international standards. raised floors are being used more frequently. The firm has been paying close attention to the sustainability aspects of its projects for more than 10 years. daylight is highly prized. Soon after the firm began its China initiative. just like everywhere else. with a balance of function and aesthetics. features natural lighting in the exhibition halls.” said Xue. “Here in China.” ects. the office buildings are designed around the needs of a corporate anchor tenant while accommodating leasehold improvements for multiple tenants.. Schedules can be very demanding and hard to meet.” For example.

Additionally. Utah has been able to attract the following companies: • Adobe. As such. the organization was restructured into an alliance with the state.000 manufacturing jobs and $540 million in CAPEX • Goldman Sachs. and top aerospace manufacturers have been flocking 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. which is attractive to the aerospace industry from both a supply chain and direct manufacturing and development standpoint. Uniquely Utah “What really sets us apart is our ability to combine project management and relationship management and bring together the state and the various cities. Utah is also home to top-notch advanced composites manufacturers such as Hexcel.” 44 the leader | January/February 2013 . which brought in 1.” said Todd Brightwell. With the emphasis on industry development and economic stability. talent and Stability Come together EDCUtah is a 25-year-old private nonprofit whose aim is to attract business to the state of Utah. Boeing and Northrup Grumman all have a presence here. Run on a membership model and founded by utilities and two major banks. When asked. Vice President of Business Development for EDCUtah. Companies such as ATK. what it was about Utah that attracts these high-end manufacturers. both the engineering and manufacturing talent are of very high quality. About 60 of its 260 strong members are cities and counties throughout Utah. which brought in 1. with the state becoming a direct contributor to the budget. “Our research department aids in companies being able to carry out their due diligence. “The talent here has proven to be very competitive. as well as the private sector. Innovation.000 jobs and $100 million in CAPEX • Procter and Gamble. All of this culminates in us being able to bring quality jobs and capital investment to the state. Brightwell said. which brought in 350 jobs and $20 million in CAPEX Carving out a Niche Utah has also been able to appeal to certain niche industries like aerospace. Seven years ago. Utah Utah: Where Collaboration. EDCUtah’s membership consists of a diverse group of companies – from banks and construction companies to furniture manufacturers. we are able to offer a unique environment. which has allowed them to weather the ups and downs of the economy fairly well.economic developer proFile BY SONALI TARE Salt Lake City.

EDCUtah had its greatest single year in 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. Attracting the Best While the Utah real estate market is relatively lower in cost. staying in Utah. To continue to compete competitively with larger markets. will allow the organization to grow and evolve. They chose Utah and have been very happy with that decision. companies with language needs have found what they need here. “Goldman Sachs needed Portuguese speakers for a project in South America. to get up-to-date education as well as connecting with corporate real estate professionals. Todd Brightwell January/february 2013 | the leader 45 . which also aims to extend to parts of Idaho and Nevada. Brightwell is on the board of the Salt Lake City Chapter. Utah’s colleges and universities have more than 190. “and they were able to find 25 Portuguese speakers in their Salt Lake City office.economic developer profile Building on Stability Another factor for many companies moving to Utah and more importantly. Another key factor is the quality and availability of talent. With an average age of 29 and 20 percent of the population in school.” Growing and Evolving All these factors have combined to make Utah a uniquely attractive market. the organization aims to continue evolving and excelling at what it does best. According to Brightwell. according to Brightwell. The lure of a comparatively lower-cost real estate market has in the past drawn companies like Amer Sports. as is the ability to bring about collaboration and cooperation among the various players. as a result of not having over-built. which is the parent company of brands such as Wilson Sporting Goods and Salomon Skis. Language skills are another attraction. relationships and partnerships is something that. and the curriculum is geared toward giving students the best mix of education. terms of attracting jobs and capital investments. Locating in a lowercost market allowed them to weather the downturn much more effectively. This is a key factor in attracting business. and he has attended multiple summits. was looking for a site to consolidate their North American outdoor products division.000 students enrolled.” added Brightwell. Continuing to nurture alliances. Its level of attention to detail is something it prides itself on. CoreNet Global is an important avenue for EDCUtah. such as Idaho and Wyoming. building on incentives and keeping bureaucracy at a minimum also helps facilitate additional business. Going Local with CoreNet Global Brighwell’s association with CoreNet Global is more than six years old. almost thrice as many as compared to other offices. has been that the state has emerged relatively unscathed through the economic downturn.” said Brightwell. Amer Sports. “Having Amer Sports here was also a tipping point in terms of attracting other large outdoor product companies. Being business friendly. they hope to also make headway into the end user sector. The chapter has been able to attract a substantial number of economic developers and service providers. With more than 180 languages spoken fluently at the universities and 33 percent of the population speaking more than one language statewide. At past summits EDCUtah has also had a booth – by themselves and also with other Mountain States. the market is still very competitive. the current and future talent and market for investors is secure here. Cultivating labor is imperative. and by the fiscal year ending June 2012.

Commercial Real Estate Investment Review. With the onset of the recession in 2008. 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. 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.) Walmart Food Distribution Centre ($115 million). an $800-million investment. (111.2 million-sq.” Rocky View County: Western Canada’s Distribution Center Located in the province of Alberta in the Calgary region. (37.. Major projects include construction of the 1. multi-residential and land changed hands in transactions valued at $1 million and more. Rose. characterized by low to mid. asset sales dropped to $20 billion. a 400.161-sq. according to Avison Young. along with historically low interest rates.484-sq. In its “Fall 2012 Canada.Special intErEst FEAtUrE Montreal. Rocky View County has seen significant investment activity on the part of new businesses during the past two years. single-digit vacancy rates. deploying $18 billion in 2010 and $21 billion in 2011.” according to a statement by Mark E.-ft. “Canada’s overall economic well-being and stable commercial real estate market fundamentals.S. chair and CEO of Avison Young.000-sq.-m. bottoming out in 2009 at $12 billion.-m. “Buyers have come off the sidelines.) CrossIron Mills regional shopping center. albeit at a modest pace compared with expansions of years past. the CN 46 the leader | January/February 2013 . U.” Avison Young reported that commercial real estate investment has rebounded strongly from the depths of 2009. Canada’s economy continues to grow. retail. Canada BY MARTIn SInDERMAn Canada: A Diverse Economy on the Upswing n a global economic arena where many of the major players are trying to avoid slipping back into recession. the Toronto-based commercial real estate services provider. Since then.S. approximately $24 billion (CAD) worth of office. industrial. I At the market’s peak in 2007.ft.

Balzac offers the perfect environment for a thriving enterprise of any size: direct access to the Queen Elizabeth II Highway and Calgary Ring-Road. a readily available talent pool and an expansive consumer base. Cultivate your company’s success in Balzac.thinkingalberta. and no business tax. Minutes from the City of Calgary. www. and one of the province’s most dynamic areas of commercial and industrial development.com . Reap the rewards of relocating to Rocky View County.Sowing the Seeds of Success Looking to relocate or expand your operation? Consider Balzac – home of the new CrossIron Mills shopping centre. close proximity to the Calgary International Airport.

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As Canada’s second-largest Meanwhile. many white-collar professional jobs with cesses.” he said.ca scale commercial compostmary energy production and January/February 2013 | the leader 49 . which is centralizing And on the infrastructure its operations in Canada. Logistics Centre at Conrich ($300 million) and most recently.” said Kalinchuk. activities such as laundry. according to the Hon. a skilled workforce. passenger and cargo volumes. retailers demonstrate and reinforce the role of Rocky View and the Calgary Region as the center of warehousing and distribution for western Canada. cant role in making Canada New investments announced the world’s largest exporter during the past year are led by of oil and gas to the U.S. anywhere else in Canada. His organization is also working with local water engineers and This new investment will augment what is already a vibrant the Dutch Consulate in exploring Dutch technology that will conCalgary regional economy. a Calgary Region as the center been numerous business lower cost of doing business and of warehousing and distribuexpansions and new investthe perfect work/life balance.S retailer (whose name was undisclosed as of would make use of CO2. there have to markets. which demonstrate the comWe grow more sweet corn. Minister of the Located on the coast of Lake Erie. Hitachi. according to Rocky View County vert much of the areas “grey water” (i. its of sustainability technology. wastewater from domestic Economic Development Manager David Kalinchuk. Calgary International grating its Hitachi Canada and Airport is Canada’s thirdHitachi Canadian Industries largest airport. ments in Saskatchewan – all of Food production is our specialty. complex of 1. Meanwhile. tion for western Canada. pumpkins.355 square meters). dance of oil-sand and shale and vibrant economy that asparagus and ginseng than gas reserves plays a signifiexists in the province. according to Kalinchuk. in the field oil-producing province. water that could be used in a range of value-added agri-food promany of them are young. retailers Bill Boyd.e. Walmart Canada and other major U. as well as greenhouse developments that attraction of a large U.3 million people.S. intefront. Walmart Canada 2012. demonstrate and reinforce the Economy for this province. with expanunits and establishing Hitachi sion on tap to accommodate Power Systems Canada to be major growth and increased based in Saskatoon.2 billion in CN Rail. “Rocky View benefits from Saskatchewan: a diverse labor force pool in the Record New Investment city of Calgary and surrounding New capital investment in communities. higher-than-average incomes and levels of overall affluence. a provider significant interest in largeof one-third of Canada’s pri1-800-699-9038 | norfolkbusiness. the ing in the Balzac area..special interest Feature . Norfolk County offers easy access role of Rocky View and the “During 2012. including chicken and turkey processing. Saskatchewan is expected to The recent investments by reach a record $20.5 million square feet (139. third-largest natural gas proKalinchuk said there has been duction province. dishwashing and bathing) into potable With an area population of approximately 1.Canada: a diverse eConomy on the upswing The recent investments by CN Rail.S. waste heat (from adjacent power plants) press time) who will be building its Western Canada warehousing and nutrient-rich compost products. peppers. Get connected to Norfolk County and other major U. Alberta’s abunpetitive business environment strawberries.

several other international com- 50 the leader | January/February 2013 .5 billion. the first new potash mine in Saskatchewan in more than 40 years.9 billion on expanding existing operations. Canada one of the world’s leading mining centers. a move that will nearly double the province’s potash production capacity by 2020. Saskatchewan has also seen a number of new investments based on its abundant natural resources. Saskatchewan’s potash mining companies are planning to invest up to $13. German based K+S Potash Canada has decided to invest $4 billion to build the Legacy Solution Mine. capacity of urea and related fertilizer products (currently 1. Also. to be based in Saskatoon. Meanwhile. its third third-largest natural gas production province. according to Boyd. Meanwhile. 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.1 million tons annually) by 2016 at a projected cost in excess of $1. Additionally. a provider of one-third of Canada’s primary energy production and one of the world’s leading mining centers. As Canada’s second-largest oil-producing province. Saskatchewan has also seen a number of new investments based on its abundant natural resources. integrating its Hitachi Canada and Hitachi Canadian Industries units and establishing Hitachi Power Systems Canada. Hitachi has announced that it is centralizing its operations in Canada. its thirdlargest natural gas production province.Canada: a diverse eConomy on the upswing As Canada’s second-largest oil-producing province. Saskatchewan has also seen a number of new investments based on its abundant natural resources. The facility is scheduled to be operational in the summer of 2014. Boyd reported that SaskPower recently announced it was partnering with Hitachi to construct a $60-million Carbon Capture Test Facility (CCTF) at SaskPower’s Shand Power Station in southeastern Saskatchewan. An illustration of Ontario’s Garden in Norfolk County Quebec.special interest Feature . a provider of one-third of Canada’s primary energy production and one of the world’s leading mining centers.

market and Guide. illustration on page 50). boat Canada (RBC).com COLOUR PUBLICATION 3 28/11/12 January/february 2013 | the leader 51 . imity to Lake Erie has 29.8 percent over the same period of 2011.000 people working in 250 topflight your service offerings and your profits. including global mining giants BHP Billiton and Rio Tinto. Many of the area’s businesses in this sector are located within two industrial parks at the two airports.000GRAPHIC ofDIRECTOR DIRECTOR WRITER MANAGER to CLIENT copies the guide CREATIVE across Ontario. continue to advance greenfield potash projects. SIZE 4. “The province is a low-cost and competitive jurisdiction.-June total. should see growth in particularly during the real GDP return to warm summer months.7 percent by 2013. your opportunities.Canada: a diverse eConomy on the upswing panies.1 billion in sales annually. created opportunities companies. 3700 RUE ST-PATRICK.325 X 6. As part of a continued strong capital investment in the province (particularly tourism & economic development marketing partner program. the as transaction volume county is now home to spiked at midyear 2012 a flourishing agricultural with large office. number of transactions Erie. “Our government has worked to create a stable economic environment supportive of business and commerce. proxplace. ADM13107_IndustrialDev_4. a well-established aerospace industry. QUEBEC H4E 1A2 $1. here include the annual “Improving prospects Norfolk County Official for Quebec exports to Map & Local Food the U.” said Boyd.500 acres available for development. plus the to be at the centre of where it all bottom-line benefits of the lowest nomic growth on tap for behind the Norfolk happens. Montreal-Trudeau and Montreal-Mirabel.7 million passengers made their way through Montreal–Trudeau during the first nine months of 2012.indd 1 11/28/12 5:08:10 PM in its resource sector) will be key drivers of this acceleration. and Saskatchewan offers excellent infrastructure with ongoing government reinvestment.com from Royal Bank of in cottage rentals.special interest feature . with its atten55. Our airport sites are home to of which adds up to elevating both as a whole next year. earning the name trial and multi-family “Ontario’s Garden” (see sales leading the way. tively lackluster 2012. development efforts According to RBC. A total of 10. you benefit from close proximity realestate@admtl.3x6. contact us at: 12 “Provincial Outlook” for tourism. most of them SERVICES ADM-13107 DESIGNER dant secondary services and supply companies. tobacco farming. If you’re looking for a great place to develop your business. accounting for some 40. Countless possibilities.75_E_v3. especially Here.S. All the province of Quebec County economy. Once a center for in the pipeline for 2013.933. or you just want and industry partners.5225 F 514. Both the parks and the airports are managed by Aeroports de Montreal. up 0.” the county and private-sector agriculture partners distribute ART COPYSTUDIO VERSION OK Meanwhile. you’ve come to the right set-up costs in North America. According to the Sept.000 jobs and and staying overnight on a vacation or to purchase local food.933. a rural municipality That said. And following a relaWhile the agriculhere’s two. tural industry continues If you want to be at the centre of the to world-class airport infrastructures there’s renewed ecoto be a driving force aerospace industry.7208 glgcommunications. there are located in southwestapparently a significant ern Ontario on Lake Many opportunities. And right now.75 4C CORE NET T 514. is a major anchor consumers who are interested in travelling to Norfolk County INDUSTRIAL DEVELOPMENT AD EN of the Montreal economy. its 10-year average of Recent economic 1. the local airport authority responsible for the management operation and development of Montreal–Trudeau and all-cargo Montreal– Mirabel. indusbase.” Montreal: Flying Higher in 2013 Avison Young reported that first-half 2012 commercial real estate investment dollar volume in the Montreal market was down more than 50 percent comNorfolk pared with the previous Norfolk County is year’s Jan. we have To learn how we can help expand 1. SUITE 240 MONTREAL. Quebec and day-trip tourists.

It could be floor plans. etc. credibility N o. move lists. but regardless. big or small. One could argue that we deal with BIG data or small data.” I’m simply using this expression to get your attention. Ultimately. you’ll gain a distinct leadership edge and have more influence. CEO of the Americas for Manhattan Software. lease extensions. general manager of the Oakland Athletics major league baseball team. Is there Anything New about the Data We Are Dealing with Today Versus a Decade ago? yes. Why? There has never been more emphasis on “big data” or what is known as extreme information management. 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 management systems • Reducing risk After attending an education session on this hot topic at the CoreNet Global summit in Orlando. The enterprise leadership implications are clear. stupid! Extreme information management brings greater C-suite access. leases. 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. indeed!! There are five key differences: 1. and the performance management overtones are pronounced because data are the essence of all metrics. Big data is the corporate real estate (CRE) equivalent of “Moneyball. to answer some burning questions I had pondered following the insightful panel discussion on big data that took place there. 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. business unit forecasts.” That’s the name of 2012’s hit movie about Billy Beane. it enables us to communicate the value – not just the cost – of CRE. Data analytics are literally a science. One of the challenges that has haunted the real estate and facility management professions is actually having and maintaining consistent. He introduced data analytics to build a championship-level team and invested a lot less on payroll than most teams. accurate data through all of the various parties that have access to or manipulate the data in databases like IWMs. Why is the Topic of BIG DATA so Important Today? Have you ever been in that awful situation 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 realize you are on poor footing and cannot back up that assumption.industry traCkEr By RICHARD kADzIs Gillespie. and that doubles every 40 months. 2. Data exists on absolutely every aspect of the CRE and FM business both It’s all about the DATA.5 exabytes of data have been created each day. I’m not calling you “stupid. As of 2012. BIM drawings. That’s because collecting and analyzing data well = information you can trust = C-suite access and credibility resulting in CRE – enterprise alignment. if you’re able to accomplish effective data management and data analytics. I went to Craig Hayden Clay Craig Gillespie 52 the leader | January/February 2013 . As a CRE executive. we need to have accurate and current information to support our recommendations and decisions. The volume of data is huge. occupancy data. Data is the currency of leadership success.

you must figure out the methodology of data collection for this disparate information from all of the sources. The increase in the speed or velocity of data creation with the addition of real-time streaming data pouring in from sensors. IT. Phase 2. As mentioned. CRE.industry tracker internally and externally.e. leases. (2. 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. “I believe in CRE. some of it from new unstructured sources (i. Ultimately. CAD. Excel and other siloed databases). Analysis of big data is what makes the first two phases worthwhile. maintenance practices. 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. they could add the Schering information to their own big data set. 5. This will then give you the confidence that transparency of information can exist and everyone can trust the authenticity and accuracy of the CRE/FM big data. HR. Upon completing the first phase of what data you need to track. And it all revolves around enabling our places to support the best talent we can assemble for our business in both bricks and clicks. 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.) real estate portfolio. 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. mobile phones. Even databases that can be bought are now updated quarterly rather than in 10-year increments. 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. it enables us to communicate the value – not just the cost – of CRE. yes. video. but at the same time they were asked to contribute $200 million to the “synergy target” promised to the shareholders following the merger. This is the stage where you beg. integration opportunities and productivity increases. Phase 4. 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. cubes (BI) and data arrays (Excel).-m. IT. The GRES planning process. finance. flexibility and innovation.-ft. 2. furniture vendors. video. and since analytics were embedded in the Merck culture.e. space utilization. Author’s Note: Special thanks to Nancy Sanquist of Manhattan Software. You should identify all the sources of information for Data is the currency of leadership success. legal. 3.. It integrated the C-level. social media. security. sensors). Some of it can be integrated electronically from existing sources (i. But the GRES group had no idea that in only three years from that time it would merge with another pharmaceutical giant. 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. As Gillespie summarized.” What do you think? January/February 2013 | the leader 53 . GRES was formed in 2006 to facilitate effective and integrated planning for the optimization of Merck’s global 30+-million- sq. 4. videos. environmental experts. we have just begun to realize the massive benefits of big data. creating a centralized database for all of your leased and owned facility and real estate data. HR. “It’s all about the data” for huge cost reductions. the variety of data has increased by adding unstructured data (social media.” By having the processes and technology in place. will exceed the $200-million cost reduction goal. social media. That is why OSCRE has begun to standardize how we describe space and cost of occupancy. Phase 3. The accuracy or veracity of the data becomes even more critical as we make more time-sensitive and expensive decisions on real estate portfolios. FM. etc. What better benefits can there be? So. HR and IT functions and enabled business growth. This will ensure you have the most accurate snapshot of your real portfolio both today as well as forecasts for the future. “It’s all about the data. use tools to mine the information to identify the best “value capture” opportunities while leveraging quick wins. Now they not only had a tremendous amount of new information to deal with. borrow 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 opportunities in the optimization of your real estate portfolio. etc. There is information from service providers. Schering Plough. sensors) to typical structured data like tables (in RDMS). We usually have little time to react to some aspect in our business changing instantaneously in the disruptive world we find ourselves working in today. and some will still require manual entry (for new lease or building information). This increase in variety has been fueled by the ‘metrospheric’ rise in mobile computing.8+-million-sq. As Hayden stated during Manhattan’s 2012 Executive Summit held at Harvard University. based on accurate and timely data. architects.

671 302.50 $75.975 EurOpE Amsterdam Frankfurt London Moscow Paris AsIA Beijing Hong Kong Mumbai Shanghai Singapore Tokyo AustrAlIA / NEw ZEAlANd Melbourne Sydney Auckland uNItEd stAtEs Chicago Los Angeles New York Washington DC $25.00 $13.C.3 1.6% 7.180.00 $10.50 $112.50 $94.4 3.50 $14. Suburban Virginia and Suburban Maryland 54 the leader | January/February 2013 .8 1.3 7.4 13.50 $5.5 6.5 20 6.00 $9.8% 10.28 $5.5 7.673 1.9% Net Absorption (%) Office 0.77 $36.50 $11.7 7 5.00 $170.6 8.50 $51.863 -369.50 $17.7 9.50 $151.00 n/a $6.471.00 $75.8 0.00 $42.50 $4.9% Industrial n/a 3 n/a 1.8 6.8 n/a n/a n/a 487.50 $220.7% 14.57 Vacancy rates (%) Office 16.1 14.dashboard 3rd quarter 2012 City lease rates (usd/sF/year) *Office **Industrial $8.1 19.17 $28.10 $5..222 423. Midtown South and Downtown Manhattan.4 6. industrial reflects Suburban Virginia.1% 5.076 -231.2 7.5 5.50 $195.6 1.00 $16. office reflects Downtown Washington D.5 n/a n/a 6 17 n/a n/a n/a n/a 10.357 -1.1 6.00 $7.9 17. rent reflects the overall average for Class A and Class B in those submarkets ¶ New York industrial reflects Northern New Jersey statistics ¶ Washington D.50 $9.00 $20.9 1.00 $107.2% 10.50 source: Cassidy Turley * Average full service ** Average NNN ¶ All office rental rates reflect CBD & Suburban unless otherwise noted ¶ New York office includes Midtown. Suburban Maryland statistics ¶ Washington D.50 $17.025.82 $58.3% 13.50 $122.C.10 $52.C.060 Industrial n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 3.4 6.1 4.00 $65.

we respond with leading-edge research. RENEW your 2013 membership today at www. Director. CoreNet Global’s promise to you is that through our network. Not a member? Contact us at membership@corenetglobal. professional development. > Recognizing professional achievement through our Global Awards Program and professional designations: Masters in Corporate Real Estate (MCR) and Senior Leader Corporate Real Estate (SLCR). leadingedge research and other benefits. Chapter education sessions. Learn. > 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.corenetglobal. > Facilitating knowledge-sharing and networking channels through Global Summits. including: > Helping you adapt quickly and effectively to today’s ‘new normal’ and economy. . and economic influences on sustainability strategies.Renew your CoreNet Global Membership today! 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. major C-Suite and business drivers. > Conducting ground-breaking research through Corporate Real Estate 2020 and annual State of the Industry reports defining leading-edge practices.org. timely case studies. Grow and Belong. Global Corporate Real Estate Whirlpool Corporation 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. global logistics challenges. and Corporate Partner Program Discovery Forums. you’ll learn how to more effectively influence. or even change.” Lee R. Utke.org to Connect. knowledge sharing and innovation.

Corporate Partners WellPoint Wells Fargo Deutsche Bank AG Reed Elsevier The Clorox Company eBay Inc.thank you 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. Community Sponsors (Workplace Community Gold Level) (Workplace Community Silver Level) (Workplace Community Bronze Level) 56 the leader | January/February 2013 .

International Monetary Fund State of West Virginia T-Mobile (Strategy & Portfolio Planning Community Gold Level) (Manufacturing & Industrial Community Gold Level) (Facilities Management Community) January/February 2013 | the leader 57 .thank you USAA Eli Lilly & Company LMC Properties. Inc.

Los Angeles Metro office as Executive Solutions. KEDFA also approved L’Oréal for tax benefits up to $800. building fixtures. Ed Verret has also Mall Bucharest. growth rate and profitability of their businesses. Ed Schreyer has been promoted to President. produced by PROFIT Magazine and Chatelaine. training facilities with warehouse and distribution areas. Agency Brokerage/Asset Services for the Americas at CBRE. The ranking is a composite score based on the size. Management Association joined the firm as Senior Altex. and he Celio.000-sq. along with L’Oréal USA plans to add 211 jobs and Lee Black has also joined the firm’s Diane Coles Levine. He will work with CBRE leaders to enhance client service and accelerate business growth in those regions. for the and the Kentucky Economic Development Managing Director and Principal and will editing and writing of the 2011 IFMA Finance Authority (KEDFA) preliminarily grow its corporate services. with the Australian and New Zealand business of Johnson Controls Global WorkPlace Solutions. has obtained a bank seeks to transform its building permit to get started this year. up to $5 million through the Kentucky 58 the leader | January/February 2013 . and Real 4 You Group is the developer. Alex Darragh has been appointed to oversee the company’s Global Corporate Services in Canada. He will direct the company’s commercial real estate management services in the Americas while continuing to lead the firm’s agency brokerage practice. a modern retail scheme in Bucharest. She will serve the company’s SunTrust account. Real estate consulting companies DTZ been honored with an award corporate real estate (CRE) Echinox and Colliers International are co-exclusive leasing agents for Mega by the International Facility footprint.-m. Executive leading Cassidy received the Distinguished Turley’s partnership with SunTrust. has recently been completed. SCAN Healthcare. conference centers. Director of Workplace invest more than $42 million in Kentucky. distribution and training programs. tenant repreFoundation publication. Carrefour. Driving Strategy and Change in Workplaces. Wirtz Beverage Headquarters 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.) corporate headquarters located in Cicero. Flanco. Manhattan Vice will serve as the Alliance President and IFMA Fellow. Business Investment program. Slot Point Casino and Cine Grand.000 through the Kentucky Enterprise Initiative Act. Nancy Johnson Managing Director. (6. The new facility – WBI Center – consolidates four locations into one hub for sales. leading portfolio optimization efforts as the Manhattan Software has Mega Mall. Ware Malcomb provided architectural design and interior design services for this project that integrates offices. Lashez and Office Shoes.members on the move Wirtz Beverage’s new 605. Cotman has Outdoor Mega Mall Bucharest joined Cassidy Turley’s corporate services team as Senior Vice President of Strategy. Work on the Move: approved the company for tax incentives sentation and project leasing platforms. which allows approved companies to recoup Kentucky sales and use tax on construction costs. have already secured locations in Mega Mall.-ft. Author Award for a Book. The merged entity will combine the local operations of Brookfield Multiplex Services. Latin America and the Caribbean. Sanquist. Sue Bennett Cathrine A. Lee Cooper. Kenvelo. Romania. C&A. H&M. (IFMA). Ill..039-sq. equipment used in research and development and electronic processing equipment. Several technological features were incorporated throughout the facility. including digital signage screens embedded in hallway floors and lobby areas. Sue Bennett of Bennett Design Associates was ranked number 57 in the 14thannual W100 ranking of Canada’s Top Female Entrepreneurs.

.................................... 49 rocky View County ...................................................................... 31 CoreNet Global (Spring Forward) ..................................................... 11 CoreNet Global (las Vegas Summit) .................................................... 56-57 hoosier energy .................................................................................................. 60 Norfolk County ........................................................................................................................................................................................................... 39 CoreNet Global (Membership) ................. 55 CoreNet Global (Shanghai Summit) ........................................................................ 5 Knoxville-Oak ridge Innovation Valley Inc............................................ ............................................................................................... 47 Saskatchewan Ministry ................................................w Required ¶ Creating Corporate Value through Workplace Strategy In the next Issue! ¶ 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 GLOBAL SUMMITS CORENET GLOBAL ASIA PACIFIC SUMMIT ShAnghAI ¶ 26-28 MARCh 2013 Grand Hyatt Shanghai INDEx OF ADVERTISERS aeroports de Montreal ...................................................................................................................... 2-3 CoreNet Global (thank You) ...........................a look ahead 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 FEBRUARY SLCR Seminar ¶ Financial Leadership & Decision Making SYDNEY: 19-20 FEBRUARY MCR Seminar ¶ Enterprise Alignment MUMBAI: 21-22 FEBRUARY MCR 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............................................................. 51 CoreNet Global (Global awards) ... 7 Interface americas ................ 9 CORENET GLOBAL NORTh AMERICAN SUMMIT LAS VEgAS ¶ 21-23 OCTObER 2013 MGM Grand Shanghai Las Vegas January/February 2013 | the leader 59 .......................................... 48 Sodexo ..............................................................................................

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