Facility Management in China

th Che Ne e le Ck O IN w l ade ut sI OO r de k s !
Facilities Management in China

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UBSs Real Estate Strategy 2015

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Workplace Design for Well-Being

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Susan Wagner of Microsoft EMEA

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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 companys 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 Leaders Guide to Uncommon Achievement Steve Farber Networking Break Extreme Leadership Jam Session: Confront CREs Top 10 Challenges (Live & Unscripted) Steve Farber Networking Reception (Executive Leaders Council attendees join Leaders Edge audience)
Sharpen Your Edge

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Leaders 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
LEADERSHIP
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CoREnET gloBAl BoARD of DiRECToRS

Your leadership makes the diFFerence.
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, Chair Senior Vice President, Administrative Services The Travelers Companies, Inc. Randy Smith, Chair-Elect Vice President, Real Estate and Facilities Oracle Steven Quick, Treasurer Executive Managing Director CBRE Matthew J. Fanoe Immediate Past Chair, Vice President of Real Estate Coca-Cola Refreshments Erica Chapman, Esq. Head of Real Estate (NAFTA/LatAm) & Attorney OSRAM SYLVANIA Micheal Creamer Partner and Head of EMEA, Corporate Occupier and Investor Services Cushman & Wakefield Maureen Ehrenberg Global Director of Facilities Management, Global Corporate Services CBRE John Forrest CEO, Corporate Solutions Asia Pacific Jones Lang LaSalle Philip Grossberg, LEED AP Managing Director, Global Corporate Services CBRE Lydia Jacobs-Horton Director, Global Facilities and Real Estate Procter & Gamble Chris Mach Associate Director, Corporate Real Estate AT&T Services, Inc.
Irene Masterton GM Retail Real Estate Shell International Petroleum Company Ltd. Denis McGowan Group Head CRES Business Alignment & Asset Management Standard Chartered Bank Sean Prasad Vice President, Real Estate and Facilities T-Mobile Christopher L. Staal, MCR Vice President and Global Head, Real Estate and Facility Management Thomson Reuters Lee R. Utke, MCR Senior Director, Global Corporate Real Estate Whirlpool Corp.
Del Boyette Principal, Boyette Strategic Advisors Tom Donatelli Vice President Real Estate & Portfolio Management Pfizer Incorporated Larry Ebert Head of Corporate Project Management Cushman & Wakefield Scott Foster, MCR Senior Vice President, Corporate Workplace Bank of America Thomas Glatte Corporate Real Estate Management BASF Group David Kontra Manager, Real Estate Operations General Electric Rick Kriva Vice President, Global Real Estate Honeywell Sally Maxwell Program Manager IBM Real Estate Operations Richard M. McBlaine Chief Executive, Strategic Consulting Jones Lang LaSalle Keith Perske Head of Global Workplace Innovation Johnson & Johnson Robin Ronne Managing Director, CEO Council Greater Fort Lauderdale Alliance Jim Scannell Senior Vice President, Administrative Services The Travelers Companies Tony Shou Fat Wong, MCR Director, Workplace Resources, APJ Corporate Real Estate Cisco Systems
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ADvERTiSing & pRoDuCTion offiCES Corenet global 2430 broadway, suite 200 boulder, Co 80304 toll Free: 866.362.4181 Phone: +1.303.565.4023 Fax: +1.303.443.6943 E-mail: leader@corenetglobal.org The Leader, Corenet globals official Publication, is published six times a year, as a bi-monthly publication commencing January/February, by Corenet global. subscription rates for non-members (in u.s. dollars): = in the united states, $75; in Canada, $85; outside north america, $95. to order, contact nicki Williams at 404-589-3241 or nwilliams@corenetglobal.org. office of Publication: Corenet global, 2500 broadway st, ste 200; boulder, Co 80304-4237. the opinions expressed in this publication are not necessarily those of the association. The Leader is sent as a benefit of membership to all members of Corenet global. articles published in this magazine may not be re-printed without written permission from the Editor. Editorial inquiries should be addressed to Chelsie butler at cbutler@corenetglobal.org. PostMastEr: send address changes to: The Leader; 2430 broadway st, ste 200; boulder, Co 80304 or leader@corenetglobal.org.
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TABLE OF ContentS
january/february 2013
Volume 12, 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: UBSs 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, Credibility 52
A Shared Vision, Strong Leadership and the Right IT Platform Pave the Way for Innovation
40
execUtive proFileS
End User Susan Wagner, Microsoft EMEAs Innovation Leader Service Provider Yaomin Xue, tvsdesigns Asia Pacific Manager, Economic Developer EDCUtahs 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
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letter FrOM THE EdiTor
BY ChElSIE BUtlER
By Changing Nothing, Nothing Changes

A great quote from motivational speaker Tony Robbins, and hes right. As you read through the latest issue of THE LEADER magazine, you will definitely notice some changes. Our most recent redesign is a direct result of the feedback from the Readership Survey we deployed last year, where you our readers asked for a cleaner, updated and easier-to-read magazine format. After a few revisions and some positive feedback from THE LEADERs dedicated Editorial Advisory Committee, wed like to fulfill your requests and introduce our new look to you. Thank you to our readers and to the Committee for your suggestions, and special thanks to our Creative Director, Bonnie Hofto, for the extra time she committed to designing the new layout. You may also notice that the subject of our cover article is facilities management in China. As promised, this coverage is part of our ongoing commitment to our Strategic Priorities, which include strengthening our global footprint. The article written by our Director of Knowledge and Research, Melissa Securda is a condensed version of her in-depth report on the general business environment in China and is backed by the interviews she conducted during her travels to Shanghai last year. Inside you will also find a Service Provider Profile on Yaomin Xue, tvsdesigns Asia Pacific Manager, as well as an End User Profile on Susan Wagner, Senior Director of Real Estate and Facilities EMEA for Microsoft. So as you can see, we are working hard on our part to make sure you are getting the best out of THE LEADER magazine your vote for the biggest value add to your CoreNet Global membership according to a recent survey. As always, we appreciate your feedback, so please feel free to contact a member of our staff if you have any comments youd like to make. You can also reach out to me directly at cbutler@corenetglobal.org. Thanks for your continued support and readership, and we hope you enjoy your new issue.
Chelsie Butler, Editor
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Corporate real estate in the news
U.S. Office Market Vacancy Rate Declining The U.S. office market vacancy rate will continue to decline moderately next year, falling to 14.9 percent by the end of 2013, according to a new analysis from CBRE Group. Improvement in the office market will begin to accelerate in 2014, with the vacancy rate expected to drop to 13.8 percent by years end. The office vacancy rate in Q3 2012 was 15.5 percent, down 130 basis points from its peak of 16.8 percent in Q2 2010. CBRE noted that uncertainty had caused businesses to pull back somewhat over the summer months affecting hiring decisions, but this is starting to reverse. Office-using employment remains below its pre-recession peak, but the gap continues to narrow. CBRE anticipates that office-using employment will have recovered to its pre-recession peak by the end of 2013, setting the stage for more substantial demand for office space. As a result, it projects that average rents will increase by 3.5 percent in 2013, before accelerating to 4.4 percent rent growth in 2014. The top-performing office markets will be those driven by technology and energy, and over the next two years, metro areas with strong concentrations of high-tech firms, such as Austin, Boston and San Francisco, will experience solid rent growth. Markets getting a boost from energy-related industries, such as Dallas and Oklahoma City, Okla., will also be well-positioned to take advantage of the economic recovery and will be
among the top 10 rent growth performers over a two-year horizon. Japan to Receive Government Stimulus According to www.ft.com, Japans government has approved its second round of stimulus in less than a month and announced it will tap reserve funds to spend Y88 billion ($10.7 billion) on a variety of measures, including rebuilding areas bit by the March 2011 earthquake, employment support and aid to cashstrapped small businesses. The stimulus comes as Japan sits on the brink of a technical recession since manufacturers have cut production. Recent economic data were more encouraging, showing an unexpected rise of 1.8 percent in industrial production from last September to October. Asia Pacific Home to Top Global Shoring Locations The Philippines, India and China were the top three global shoring locations for corporations, according to a recent report
from Jones Lang LaSalle. The ranking was based on a number of jobs created, resulting from investment by corporations in shared service centers, customer contact centers and technical support centers from 2008 to 2011. The Philippines attracted 115 projects during that period, creating more than 72,000 jobs; India attracted 105 projects, creating 64,000 jobs; and China attracted 56 projects, which resulted in 25,000 jobs, as sourced from fDi Markets data (the Financial Times Ltd.) According to the report, Onshore, Nearshore, Offshore: Still Unsure?, the changing global economic landscape is impacting corporate strategy and location decision making, and companies are increasingly selecting from those three shoring options. While established offshoring locations such as India and the Philippines continue to attract the highest volume of offshoring and investment jobs, an increasing number of companies are looking to bring operations closer to home, with countries like the U.S. and the U.K. seeing increased activity.
While established offshoring locations such as India and the Philippines continue to attract the highest volume of offshoring and investment jobs, an increasing number of companies are looking to bring operations closer to home, with countries like the U.S. and the U.K. seeing increased activity.
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for the CoreNet Global Asia Pacific Summit in Shanghai convening high-level CRE professionals from around the world.
Learn and grow. Challenge and inspire. Lead and succeed.
At the Shanghai Summit youll engage with thought-provoking speakers, experience innovative session formats, and enjoy world-class networking. Powerful sessions led by industry leaders and experts from around the Whether youve just started your journey in corporate real estate, or if youre a senior-level business executive, there will be plenty of valuable information for everyone!
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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 todays 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, 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, 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, visit www.corenetglobal.org/shanghai2013 or contact: In Asia: Mario Qian, Director, Member & Component Relations, Greater China & Japan +86 136 8194 9658, mqian@corenetglobal.org Outside of Asia: Karen Field, Registrar, +1 404 589 3212, kfield@corenetglobal.org
Facilities Management in China:

Growth in Sustainability and Strategy
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cover Story
BY MELISSA SECURDA
n 1978, The Peoples Republic of China embarked on a mission to liberalize market policies, and in the years since, the country has experienced extraordinary growth. The economic engine got a boost in 2001 when China joined the World Trade Organization (WTO), and the resulting economic boost drove the economy to its current status as the second-largest world economy. During this 30-year progress era, the population urbanized, a middle class emerged, and property development raged. Controlled evolution has been a key ingredient to Chinas transformation. The government maps out a blueprint for the country every five years, and Chinas Twelfth Five-Year Plan targets the following key areas for rebalancing the Chinese economy: Increase household income and encourage private spending; transition economic development from reliance on manufacturing and exports; open up Chinas service sector Inclusive growth; distribution of economic prosperity across a broader population, including historically prosperous coastal cities, as well as more economically challenged interior cities An evolving business model that supports innovation and R&D for Chinese enterprises. Sectors of focus: health care, energy, technology known as strategic emerging industries; improved access for MNCs to invest in Chinas strategic emerging industries Sustainability/energy targets; environment-related taxes Increase minimum wage; raw materials price reforms; education reform The governments attention to its strategic emerging industries will result in a larger office worker demographic. Premier office space in growing cities will continue to be in high demand as companies expand and emphasize brand and image
Facilities managers need to do more to create awareness within the organization about the long-term benefits and value FM can bring to the business.
January/February 2013 | the leader
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creation. Corporate real estate, currently in its infancy in China and driven in large part by multinational corporations (MNCs), is making larger strides toward greater sophistication. Shining a spotlight on the facilities management (FM) sector reveals a burgeoning industry making inroads across the country. FM is a rather recent trend in China, and this segment of the real estate pie is starting to show signs of improved sophistication. FM operations tend to be highly tactical in nature with a project-by-project mindset. However, a growing number of facilities managers in China endeavor to enable productivity in the workplace, incorporate sustainable strategies for building management and enhance the infrastructure to prolong the life of the asset. A new approach to FM is emerging in China; one
in which strategic building management contributes to a more valuable organization. The role of the facilities manager and the plans in place will become more and more strategic in nature as FM influences all aspects of the workplace. Sustainabilitys Role in FM Sustainability will continue to influence design and construction and will change the way FM is carried out in China. As in other parts of the world, there is a premium placed on sustainable buildings, therefore it is critical to integrate sustainability into FM and link back to the organizations strategic plan to show the value add. Most of the focus in China is on energy use its the piece of the pie FM managers can control. Building operations
A new approach to FM is emerging in China; one in which strategic building management contributes to a more valuable organization.
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and their effective and efficient management are becoming more significant than the buildings initial construction. Facilities managers have the ability to adapt and modify the existing building structure when they begin to measure and track consumption. China has seen significant growth in green building certification over the past five years. The US Green Building Council now reports more than 80 million square feet (7.4 million square meters) of LEED-certified projects in China. China began its own certification program, Three Star Green Building Certification, in 2006, and current estimates include 200 buildings certified in the program. Certification creates accountability for energy efficiencies, reducing operating expenses over time and creates a meaningful contribution to resource preservation. Most of the certified stock is government owned, but the trend will continue to spread over time. Facilities managers can integrate the sustainable agenda into building operations and make the business case for increased sustainable measures by tracking progress. 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 buildings lifecycle. This is achieved with FM working in tandem with project management; working in committed teams to create creative solutions and measurable goals. Powering through the Challenges The biggest challenge to implementing strategic FM operations lies with the local culture. Chinese corporate culture generally does not support risk taking and internal collaboration. Many traditional Chinese firms have the mindset that failure is not an option and often have a very linear process that does not promote taking initiative and innovative ideas. Access to advanced FM training and exposure to a more collaborative business environment will eventually decrease the impact of traditional cultural influences in the organization. Guidance from MNCs and global service provider companies can help inspire greater self-confidence and the ability for local Chinese facilities managers to trust their decisions. The local industry needs greater transparency and integrity as it continues to evolve. Facilities managers need to do more to create awareness within the organization about the long-term benefits and value FM can bring to the business. Allan Fan, Senior Facility Manager, Greater China for Life Technologies, suggested that facilities managers move forward with the mindset that proper FM brings enormous value to the organization. Spend time with the sales people and understand the core business, he advised. Link facilities management to company performance.
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 increase transparency and improve service delivery between FM and business operations. Within the FM department, there is also a need for improved branding and marketing skills. Despite greater strides toward sophistication, most facilities managers in China are very technical, and its a challenge for them to communicate the departments value-add to senior leadership. 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. Doing so will ultimately benefit FM in the form of management respect and the potential for additional financial resources when needed. Facilities management is in catch-up mode in most national and state-owned enterprises. Many companies rely on outsourced partners because of the lack of internal expertise. Developing more mature, locally sourced FM leadership in China is essential for the continued sophistication of the profession in China.A recent panel of local Chinese facilities managers was asked to describe the most pressing issue facing FM in China. The lack of available, skilled FM talent ranked at the top of the list. There are not enough people in the industry, said Fan, but we are eager to learn and want to catch up. FM is not an officially recognized profession by the Chinese government. Companies that perform these services must apply for a license as a property management company, though there is a significant distinction between the two functions. Currently, there is no formal degree at Chinese universities for FM. A greater focus on education would help generate more interest in the industry and let students know that FM is a strong career path because it is an integral part of business operations. About the Author
Melissa Securda is Director of Knowledge & Research at CoreNet Global. She can be reached at msecurda@corenetglobal.org.
For more information on this topic, please search for this title on our Knowledge Center Online. China Corporate Real Estate Survey 2012: The Dragon is Stirring
15
Simple Lighting Control Retrofits Offer Sophisticated Benefits

BY BRIAN DAUSKURDAS
here are 71 billion square feet (6.6 billion square meters) of commercial building space in the U.S., and more than 90 percent of it was built in the last century.1 Making these buildings more efficient and more sustainable is becoming a top priority for building owners, management companies and tenants across the country. Local and federal codes mandate new energy standards; rising electricity costs drive facilities to reduce electricity use; and building owners are embracing the idea that efficient buildings can command higher rent, facilitate longer leases, limit tenant turn-over and reduce building operating costs. Lighting accounts for approximately 38 percent of the average commercial office buildings total electricity use, which means that effectively managing lighting use can have a huge impact on a buildings energy costs1 (see Figure 1). In new construction, sustainable building practices are becoming the norm, but even in existing buildings simple strategies can be implemented quickly and easily to address inefficiencies, reduce energy use, improve comfort and enhance productivity in the space. Three of the most
common contributors to lighting electricity waste in buildings include spaces that are over-lit, lights that are left on 100 percent of the time and spaces that do not make adequate use of daylight. In spaces that are frequently over-lit, digital dimming ballasts can reduce maximum light levels in a space by 20 percent or more a strategy called high-end trim or institutional tuning. Because the human eye readily adapts to slight variations in ambient light, those changes are virtually undetectable to occupants. High-end trim typically saves 15-20 percent lighting electricity.2 Occupancy/vacancy sensors ensure that lights are not left on when a space is vacant, generally saving an additional 30 percent.3 In perimeter spaces, daylight sensors can automatically adjust light levels based on the amount of daylight in the space. Daylight harvesting can contribute 20-60 percent lighting energy savings,4 and like high-end trim, because lights adjust over a few seconds, the change is generally transparent to the people in the space. Another ideal space for occupancy sensors is stairwells. Mike Hodowanec, Purchasing Manager for the Reading Area
16
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 buildings 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 nations 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
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. Editors 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 companys Global Energy Sales Team, which is focused on leading the companys growth into existing building retrofits. He sits on Chicagos Construction and Real Estate Council and is an advisor to RealComms 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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Lower Costs & Greener Workplaces:

UBSs Global real estate Strategy 2015
BY NICK GARNISS AND PETER WELSBY
ore than ever before the financial sector is under scrutiny, with clients demanding better value from its products and greater transparency within services. 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. This, with an additional commitment to sustainability, has created a strong business case for global financial services firm UBS to rethink its corporate real estate (CRE) strategy and cut long-term real estate costs and create greener and more attractive workplaces for its employees and clients. Present in all major financial markets worldwide, UBS has offices in more than 50 countries, with about 35 percent of its 64,000 employees working in the Americas; 36 percent of its employee base in Switzerland; 17 percent in the rest of Europe, the Middle East and Africa; and 12 percent in Asia Pacific. UBSs New Strategy Defined With such an expansive CRE portfolio, a significant proportion of the companys budget is allocated to real estate. To ensure that the management of this is executed effectively, UBS has committed itself to taking an innovative approach to implementing and using its CRE projects to generate increased efficiency and, in turn, better value for its clients. At the heart of this new approach is UBSs global real estate strategy 2015, also known as Footprint. Footprint is the
UBSs offices at 5 Broadgate in London.

Make Architects
global implementation of a defined five-year real estate strategy assigned to a particular region (e.g. Zurich, London and New York City). The premise of the strategy is the significant reduction of ongoing costs; the exiting of less-efficient buildings; concentration on bigger buildings; and the relocation to more affordable, peripheral locations as part of a new workplace concept, Workplace for the Future. This strategy covers each of UBSs major centers.
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London Implementation In London, the focus of the strategy is the agreement for UBS to be the sole leaseholder of the new development currently under construction at 5 Broadgate in the heart of the city, as well as the complete rethink of the companys existing premises at Liverpool Street as part of the new site. The design for 5 Broadgate is a proposed world-class office facility to be developed and ready for occupancy in 2016. The 12-story,
state-of-the art development will bring the firms trading operations together into one building as outlined by the strategy, which is based on two key components consolidation and space efficiency and that is driven by four fundamental principles: Effectiveness: collaboration, integration, execution Efficiency: flexibility, cost efficiency Environment: sustainability, resource efficiency Identity: values, branding, attraction
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UBSs Liverpool Street location is part of the companys consolidation into one office.
UBSs London CRE portfolio currently consists of the Broadgate Campus buildings, the 1980s campus at 100 Liverpool Street and 1 Finsbury Avenue, which have served their purpose well for more than 25 years. However, consolidating these locations will increase efficiency and collaboration among the UBS teams, demonstrating a commitment to a new way of working in financial real estate. This move will also allow UBS to consolidate its trading operations into one building, resulting in the retention of UBS in the heart of London. The new building at 5 Broadgate will incorporate four 60,000-sq.-ft. (5,574-sq.-m.) trading floors, meeting and conference facilities, flexible workspaces and a range of amenities that will be implemented to enhance employee and client experience. In addition, the building has been designed to include the highest standards of sustainability good practices, which include generating renewable energy with photovoltaics and solar thermal panels, reducing water consumption by rainwater harvesting and innovative technology and increasing biodiversity through the incorporation of green roofs and terraces.
To realize the longer-term vision, UBS has had to implement a short-term CRE strategy to bring its current facilities up to date and make them compatible with the switch over in four years.
Overcoming Project Challenges To realize the longer-term vision, UBS has had to implement a short-term CRE strategy to bring its current facilities up to date and make them compatible with the switch over in four years. This short-term strategy will facilitate the relocation of employees and is based on improving current corporate accommodations, replacing critical infrastructure assets and ensuring the most efficient use of space before the move. A lease break in the Broadgate Campus buildings was critical to enable the move to the new development. UBS had a break for 2016 that was unmovable, which meant that Project Twister equipping the campus for its stay before 2016, improving accommodation, replacing critical infrastructure assets and ensuring the most efficient use of space needed to be delivered within 24 months. This was a significant challenge for a global financial operation that functions at 100 percent, 24 hours every day, 365 days a year. UBS required a partner that would align itself seamlessly into the organization and not require a significant amount of bedding in time before starting the program.
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The premise of UBSs new model of real estate delivery was that it needed to be based on an integrated relationship. It was this relationship and how it was united with the business that would determine the projects achievability, combat the challenges, generate the most value for money and risk adverse solution, create true accountability and transparency and, most importantly, enable the company to continue to innovate during the program. This need to innovate was vital. As part of its CRE strategy, UBS made assurances that any upheaval would not only not impact its day-to-day activity, but would also not affect its commitment to innovation and better working practices. The business continuity plan needed to remain watertight. To achieve this, UBS collaborated with partners to deliver solutions that were: Client and risk appropriate Commercially astute, incorporating best practices for landlord and supplier management Change ready, forward focused Measurable in terms of results Team centered, leveraging bank-wide processes, learning and talent Effective (doing the right things) and efficient (doing things right) After a review of the UBS London portfolio and real estate vision, it was identified that there were 133 business-critical proposed projects in the program pipeline; these had to be delivered within a fast-track solution that would allow the moves to take place within the required timelines. UBS partnered with Mace, an international construction and consultancy company, and Maces approach to the UBS vision was based on four core principles: Integrated service route. This would identify efficiencies and reduce risk through effective coordination, with Mace as the sole point of contact across the project. This responsibility and accountability was a key aim for UBS. One team. Full integration with the client was ensured with Mace and UBS project managers working side by side. Business as usual. A focus on quality of output and minimizing disruption to the work force was imperative. Flexibility. A flexible approach was necessary to accommodate the needs of the business. Results collated from the reconfiguration report that all parts of the project have been delivered on schedule and within budget, and the value of efficiencies demonstrated throughout the project equate to 1.7m (5 percent) of the total spend. In 24 months, the projects were dealt with very much as a bolt on to the day-to-day operations of UBS. The inevitable moves and small works required to meet the changing needs of the businesses and the planned maintenance activities have all been implemented without disruption. A remarkable fact is that more than a quarter of a million hours were worked without a single incident. Without a doubt, the most impressive feat in the refurbishment element of the overall project was the complete overhaul of seven floors of UBSs 3 Finsbury Avenue location in prepa-
ration for the relocation of the business from Curzon Street. This was achieved in just 12 weeks from start to finish one month ahead of the originally agreed-upon completion date. The integrated real estate solution included all the benefits of a reduced overall cost base, shared culture, focused development of people, tailored solutions, investment and transparency. Operating as one entity, UBS and Mace have been able to work toward common objectives and take their shared vision to market at a much faster speed. This success has proved that this type of integrated model can work within any industry that relies on the continuation of services, 24 hours a day.
About the Authors
Nick Garniss is Executive Director CREAS Europe North/East and MEA, Property Management, for UBS.
Peter Welsby is Maces Program Manager/ Operations Director.
For more information on this topic, please search for this title on our Knowledge Center Online. Breaking New Ground - The Global Integrator Model
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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 desire among large corporations to outsource non-core functions, coupled with real estate providers that had an appetite for large, multi-market services and global expansion, resulted in an industry that today serves more than two billion square feet (186 million square meters) of property for users in virtually every country of the world. In 1990, a large real estate services company would have operated a few regional offices with a managed portfolio of 10-30 mil-
T
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lion square feet (929,020-2.8 million square meters). Technology consisted of client servers and desktop computers running a basic financial accounting program. Internal real estate departments at large companies had hundreds of employees scattered worldwide, planning and acquiring space, building new offices, managing owned properties and trying to keep track of costs and lease data manually. The recession of the early 90s pushed large occupiers to look for ways to become efficient, and CRE became a ripe opportunity for cost reduction and outsourcing initiatives. It was A.T. Kearney, Bain and Booz Allen Hamilton and other consultants that pushed corporations to outsource as a way to save on operating costs, according to Bill Agnello, who at the time was working with Baxter Healthcare and was an
Key Milestones in the Evolution of Corporate Real Estate Outsourcing
Sources: Trammell Crow, Wikilnvest, CoStar, Jones Lang LaSalle, Funding Universe, Cushman & Wakefield, Bizjournals, NY Times, Wikipedia, Newmark Knight Frank & National Real Estate Investor
early driver of managing a large portfolio through outsourcing. Leveraged buyouts were a dominant school of thought at the time, and large corporations were challenging their business models. This led to a lot of pressure on support groups to redefine their value add. Bruce Russell, a non-real estate professional, was asked to take over Kodaks global portfolio during that time. I remember when in my first meeting with our new CEO he asked me what we could save from real estate globally, and I think I told him $500 million in operating costs and hundreds of millions in additional cash flow, said Russell. However, I initially had no idea how to achieve those aggressive goals, and I knew we needed help from the outside. There were no restrictions as to engaging all parts of the company in what became a major corporate-wide initiative to reduce occupancy costs. We were all under tremendous pressure to improve corporate performance. Other large corporations, including IBM, AT&T, HewlettPackard and Digital Equipment, encountered the same challenges of reducing costs and improving performance while adding value to their company. But, as Russell noted, The service provider community wasnt ready. They lacked geographical coverage, broad business skills and for the most part had a broker mindset focused on the local deal.
An industry milestone occurred when CB Commercial (now known as CBRE) acquired Madison Advisory Group in 1992. Madison was composed of more process-oriented real estate professionals, and they were willing to invest time in developing portfolio solutions not merely executing local deals. In New England, toward the end of the technology boom of the 80s and early 90s, Digital Equipment decided to outsource facilities management (FM) at its corporate campus to Compass Management & Leasing. In a matter of a few months, a FM assignment of a million square feet (92,903 square meters) grew to more than four million square feet (371,612 square meters) and within 12 months had expanded to facilities throughout the U.K. In the process, the company saved millions of dollars in operating expenses and reduced internal headcount, while the provider ended up with a multi-million-sq.-ft. client. For real estate professionals, these new corporate portfolio accounts represented an opportunity to rapidly grow their business and expand into regional and global relationships with substantial users of space. John Davis, then in the CRE department with Bank of America, remembers in the early 90s that providers were beginning to discuss providing services to clients typically provided in house. We had a senior vice president who was the head of international CRE at Bank of America, one of my counterparts, said
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Davis, who is now a partner with Capstan Advisors. He came to me one day and said We need to keep these vendor guys out of our shop; they are trying to take our jobs. I made a career decision in 1994 that the future of CRE might be on the service provider side and joined Koll Management Services. Of course we had virtually no infrastructure in place for these large assignments, no processes and little standardization. The entire infrastructure that exists now had to be put in place. According to Cushman & Wakefields John Santora, In those early days, we had little information about the properties and very little data to make decisions. We also had clients who wanted to outsource but did not have complete control over all of their real estate, so that was a challenge we and others faced. In the mid-90s, we saw that this business was for real and we began investing in people, systems and standardized processes to serve clients. It was just something we had to do. CRE professionals in large firms were under pressure to reduce costs and create shareholder value, and the provider community saw opportunity. In the early 90s, most real estate professionals sought to win an assignment for a single property. Winning a 300,000-sq.-ft. (27,871-sq.-m.) property management assignment from an investor-owner was a reason to place a tombstone
advertisement announcing the win. But when companies began to entertain large portfolio assignments, a dynamic and fastgrowing industry was born. Guys like Bruce Russell at Kodak literally took us to school, brought us in and had training classes on how we should think about their portfolio in order to provide services to them, said Gary Beban, who at the time was the President of CB Commercial. We were creating the business as we went along with their help. Brokerage companies werent that strong with processes and standardization, but our clients were increasingly demanding a more sophisticated approach. As a new century dawned, dozens of firms were taking major steps to outsource their CRE functions. Baxter Healthcare hired Trammell Crow for FM services. The demonstrated costs savings, increases in operating efficiencies and knowledge transfer were increasingly demonstrated across industries. Lynn Kious, who was with First Interstate Bank, saw that the transfer of knowledge from the provider community to the clients was evident from the beginning. Kious, who is now at Johnson Controls, believed early on that this shift to providers was and still is an exciting development, raising the performance bar for all of us in the industry.
The service provider community wasnt ready. They lacked geographical coverage, broad business skills and for the most part had a broker mindset focused on the local deal. - Bruce Russell
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Some firms believe they have actually outsourced too much or given too much to one provider and are pulling some things back in house or moving to multiple providers. I dont think you are going to see two- and three-people CRE departments for large companies as much in the future. - John Davis
By 2000, it was clear that many of the worlds largest companies were signing contracts with service providers and outsourcing significant pieces of their real estate and facilities organizations. The provider community was in the middle of a wave of consolidation, as firms were acquiring both functional and geographic capabilities to serve the expanding corporate client base. In 1998, Jones Lang LaSalle acquired Compass Management and Leasing and strengthened its corporate services offering. Likewise, CBRE acquired Trammell Crow in 2006 and gained stronger project and facilities capabilities. In 2005, Johnson Controls bought USI, a smaller firm specializing in real estate services to corporations. These multi-billion-dollar investments and the fee business they represented are evidence CRE outsourcing is a growth industry with enormous residual potential. By the mid-2000s, it was common to walk into any large CRE department and see service provider employees sitting on site, adjacent to the clients they were serving. As the confidence in the capabilities of the providers increased, global contracts were established for multiple services. Technology tools were developed and acquired to service the needs of global portfolios. Now that larger providers had assembled significant footprints of offices, integrated solutions or the provision of multiple services under one contract was being offered by providers. One-stop shopping became the mantra from sales people from the provider firms, and some companies experimented with this approach. Other clients preferred best-in-class providers by function or region and retained multiple providers. In recent years, some clients who tried the fully integrated solutions have begun to rethink this approach and either brought some functions back inside their organizations or segregated the work among multiple providers based on geography or functional expertise. Evidence in the market points to the fact that clients are evolving from the one-size-fits-all approach to a more custom approach based on providers real capabilities. Some firms believe they have actually outsourced too much or given too much to one provider and are pulling some things back in house or moving to multiple providers, said Davis. I dont think you are going to see two- and three-people CRE departments for large companies as much in the future. In the past 24 months, a hybrid model for service delivery has developed and been pioneered by firms like Microsoft and Accenture. These firms have been in the market for an integrator a company that integrates the data and processes of multiple providers across the globe. This approach, which is innovative and not fully evolved, enables a large firm to avoid the costs and friction required to directly manage multiple providers but enables a best-in-class approach in different geographical regions and multiple functions. Roughly two decades after the inception of outsourcing by visionary companies and industry leaders, the outsourced model for CRE services has become the way things are done, and no one believes the clock will turn back on this paradigm shift in real estate services delivery. So what does the future hold? I guess we are in the middle phase of our development as an industry. We have made great progress, but I think the clients and our competitors believe that we still all have a long way to go, said Santora. I think CRE outsourcing has created an entire new service line, 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. 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. Others noted that the focus on efficient use of workspaces will continue to be an issue confronting large users, and the provider industry will be pushed to develop innovative approaches to increase productive use of increasingly costly space. One fact is clear: An idea that started in the minds of a few industry leaders 20 years ago has radically changed the CRE services industry. We have evolved from an industry less focused on the real estate investor community to one increasingly focused on the user and occupier community. About the Author
Thomas W. Bogle is EVP & Group Head, Strategic Portfolio Solutions for Studley. With more than 20 years as a CRE and facilities professional, he has had leadership roles within the industrys leading firms.
For more information on this topic, please search for this title on our Knowledge Center Online: Service Delivery and Outsourcing: Strategic Alignment of the External Resource Network
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A Shared Vision, Strong Leadership and the Right IT Platform Pave the Way for Innovation
BY LUIGI SCIABARRASI, KIM COTTER FUCHS AND RICK CLEVELAND
t is no secret that todays leading corporations are intensely focused on ways to foster greater creativity and innovation within their work force. Companies that consistently innovate and do it well can create a significant competitive advantage, get products to customers faster and tap into new and emerging markets. Corporate innovation is the engine that propels businesses to success in todays knowledge-based economy. The changes taking place in the physical work environment are surely helping companies innovate better. However, workplace design alone will not help companies become more innovative. For true innovation to occur, real estate has to be part of an overall corporate strategy that includes strong leadership, shared vision, engaged employees, technology and infrastructure that enables the business to address real customer needs, as well as a corporate culture that enables risk taking. Barriers to Innovation A 2012 joint survey conducted by Cushman & Wakefield and CoreNet Global cites both the importance of innovation and the barriers that exist to companies achieving it. The survey, conducted at CoreNet Globals Spring Summit in San Diego, polled more than 1,500 corporate real estate (CRE) professionals from around the world. Of those polled, approximately 87 percent indicated that fostering better creativity and innovation was either important or extremely important to their organizations. The results also noted that almost 40 percent believe their staff should spend an average of 1/3 of their time focused on activities that generate higher levels of creativity and innovation. These results support what many current
organizational and leadership management experts believe when they discuss the need for corporate innovation. Most of these experts conclude that those organizations that do not consistently innovate run a risk of being left behind their competition at an increasing rate. The survey also identified contributing factors to innovation, such as the physical work environment, with 68 percent of respondents rating the quality of the work environment as a contributing factor to innovation. However, the most important contributing factor identified was in-person interaction and collaboration with more than nine out of 10 respondents ranking it the most important contributor to work force innovation. This presents challenges for many corporations that have a larger percentage of remote workers who are not necessarily in the office daily or weekly. Perhaps the more illuminating results of the survey, however, center on the current challenges organizations face in getting their employees to innovate at higher levels. Of those surveyed, more than 40 percent identified challenges with not having adequate technology and a risk-adverse corporate culture as hampering innovation. Approximately 32 percent of those professionals surveyed felt that strengthening corporate mandates to promote uninhibited work environments among staff would have a positive effect on innovation. The Physical Environment and Innovation The transformational changes occurring in workplace design can address many of the challenges to innovation. Open floor plans with common collaboration and social spaces encourage greater
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Figure 1: Barriers to Innovation
employee interaction, and mobility programs and hot-desking promote the new ways in which we work and how technology is used in the work environment. These new programs and designs are in large part focused on helping foster improved employee engagement and collaboration, which theoretically leads to better ideas and ultimately more innovation. If done properly, todays new work environments can provide the corporation with the right framework for innovation to occur. However, the organization cannot simply force its employees to innovate because they are in a different environment. The physical workplace can only provide so much. Workplace design, with the objective of fostering innovation, must be accompanied by an overarching corporate strategy and culture that encourages and enables employees to innovate. Necessary Factors for Achieving Successful Innovation As the survey results indicate, one of the biggest challenges facing organizations today is creating a culture that supports and embraces innovation. Wikipedia defines culture as the attitudes, experiences, beliefs and values of an organization. Given this, the question then becomes, What are the significant factors and tools needed to successfully create a culture of innovation? While the physical environment is one of the tools (68 percent of respondents indicated it would help), it is still only one part of the total. Other important factors include clearly defined objectives, a shared vision, leadership, communication, recognition and the right IT platform. All of these require consistent senior executive support. This top-down approach provides the framework that allows creativ-
Leaders need to create the opportunity for effective collaboration, and the best collaboration happens face-to-face, in the right location and with the right tools.
ity to happen through cultivating, playing, venturing, enabling risk taking and harvesting the spark of innovation. Leadership. Successful leaders create the right environments both physical and cultural for their employees to work. Leaders need to create the opportunity for effective collaboration, and the best collaboration happens face-to-face, in the right location and with the right tools. Creating the atmosphere for collaboration means managing teams and defining a clear set of goals and expectations to maximize performance on a shared vision. Maximizing team performance relies on two major leadership functions. The first is to set the stage, which includes identifying the right team members and creating a positive operating structure. The second is to coach team members by effective communications, which includes clearly defining goals and objectives and providing an atmosphere of positive and constructive debate. This model establishes the foundation of an empowering leadership style that creates a platform for maximum team performance. Another leadership element is the opportunity to take risks, to experiment and to champion change. While change leadership is scary to some, by embracing experimentation leaders send the signal that its ok to take risk. This includes understanding how decisions about opportunities are made and how to provide the thought leadership to influence direction. Providing a more tolerant approach to risk taking contributes greatly to a culture of innovation. The Right Technology. Information management and technology is also critically important to supporting an innovative atmosphere. Distinguishing between core and enabling technologies
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will help leadership focus on tools that will enable innovation. Core technology supports and provides leverage to achieve core competency objectives, while enabling technology provides the means to implement core technology. Core technologies provide potential entry to a variety of markets, contribute to a perceived significant benefit to the customer in terms of end products and are difficult for customers to imitate. Enabling technology is associated with infrastructure and assists the core technology in doing what it does best.
sees the successful implementation of an innovation strategy within CRE, it will go a long way toward the successful implementation of one across an organization. Physical workPlace 4. Always beta test. Many wellintended strategies have failed because of poor change leadership skills, the lack of a shared vision and the proper the cre shared change up-front work not being done. By innovation vision leadershiP challenge conducting workshops and collecting employees input and beta-testing concepts prior to full implementation, CRE can address upfront any issues technology & prior to full implementation. inFrastructure The CRE Role 5. Educate senior management. CREs role in helping the organizaAbove all, CREs 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, CRE views real estate not as an endnot occur without change, engaged employees, a shared vision and all solution to the innovation issue, but as an enabling body that the full support of senior management. As previously stated, innois part of an overall companys foundation. While its main role is vation occurs when there is a cultural environment that supports the delivery and ongoing maintenance of the workplace, it is crititrial and error and continuous improvement and where employees cal that CRE be able to see the entire picture of whats needed for are free to voice their opinions without fear of repercussion. It is companies to innovate successfully. At Symantec, 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. ment, culture and the overall mindset of employees play in this process. In delivering work environments for business units across the organization, Symantecs strategic approach is rooted in five key About the Authors considerations. 1. Understand for what CRE is solving. Knowing the corporate and business objectives of proposed changes in the work Luigi Sciabarrasi is Vice President of Real Estate & Workplace for Symantec Corporation, where he is environment and having a shared vision are the first steps in responsible for the companys global workplace solutions. implementing a successful strategy. Without these, it is nearly impossible to deliver the effective workplace solution. Some organizations have clear and specific goals of reducing cost, while others have goals centered on effective and efficient workplace Kim Cotter Fuchs is an Account Operations Director for Cushman & Wakefields Corporate Occupier & environments. Communicating with the organization, asking the Investor Services group. In addition to managing key right questions and understanding what CRE is being asked to client accounts, she is the team leader for CISs Global do are the first steps in running any change management process. Innovation Initiative. 2. Establish trust between CRE and business units. For companies that do not have an inherent culture of change leadership and innovation, change can be difficult. CRE, as the manager of change in the physical environment, must take a leadership role Rick Cleveland is the Managing Director of Research & Strategy for Cushman & Wakefields Corporate in educating business units on the change process and maintain a Occupier & Investor Services group. He advises CIS clipositive outlook on the end result. Any change must communicate ents on key trends and strategies in CRE and is responthe shared vision to employees and outline its benefits. Business sible for CISs Global Thought Leadership Initiative. units will be more likely to understand and embrace change with a positive mindset if CRE is a trusted business partner, and CRE can earn this status through open communication, inclusion, education and willingness to accept criticism and feedback. For more information on this topic, please search for this title on 3. Lead by example. CRE departments charged with fosterour Knowledge Center Online. ing innovation in the workplace must themselves be innovaEnterprise Leadership: tive. Showing the company how a new workplace environment The Collaborative, Value-Adding Role of the Future works by trying it themselves, along with promoting an organizational culture that encourages risk, is critical. If the company
Figure 2: Critical Factors in Achieving Innovation
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Transforming CRE Service Delivery:

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

Figure 1: A Time-tested Transformation Methodology
Transformation Methodology
Assess
1. 2. 3. 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. Develop a Framework 2. Build the Team and Establish Transition Management Office 3. Initiate Change Enablement 4. Design Future State Operating model and organization Outsourcing model Processes Information technology Performance management 5. Prepare for Implementation Assess change readiness Develop training and training plan Develop implementation plan
Implement
1. Implement Communications and Change Management Plans 2. Conduct Knowledge Transfer 3. Manage Organizational Transition 4. Implement Future State Service Delivery Model 5. Track Performance Against Original Business Case 6. Establish a Continuous Improvement Program
Source: Deloitte
Organizational structure Sourcing/outsourcing model Business processes Information technology platform Performance management To properly rethink these elements, it is important to understand the way things are done today. This can enable effective evaluation against internal and external benchmarks and leading practices to identify strengths, gaps and opportunities for the future state. Joe Barile, SVP of Global Real Estate and Client Services at AIG, said his organization spent the first 60-90 days focused on the development of an extensive portfolio, cost, resource, technology and external contract baseline before launching the redesign and restructuring activities. You need to evaluate the as-is condition as quickly as possible, he said. By establishing an understanding of the current state, we were better able to prioritize our initiatives and determine where we should invest in the near term. 3. Establish a Future State Vision and Strategy for CRE An effective transformation is guided by an overarching vision and strategy, considering all aspects of the service delivery model. The vision and strategy should address: Strategic direction for CRE Services to be delivered and the preferred delivery approach Level of CRE maturity Alignment of CRE to the broader enterprise Overall corporate culture, structure and decision-making approach Doug Beebe, Corporate Manager of Administrative Services for Toyota Motor Sales U.S.A., commented on his real estate and facilities (RE&F) organizations recent reengineering efforts, every transformation needs to start with creating a vision and then communicating in such a way that not only is
the leadership bought into it, but everybody that is going to participate in the journey is bought into it. This level of engagement in the early days of the initiative significantly enhanced RE&Fs ability to effect change during the transformation for any time along the journey if anyone questioned something, then we could go back to the vision and strategy. - 2 - Chris Staal, VP and Global Head of Real Estate & Workplace Services for Thomson Reuters, focused on aligning the vision and strategy for CRE with the business strategy for the broader enterprise. As part of this effort to align with the business, the new CRE organization adopted a flexible resourcing model to be able to deliver effectively and efficiently right out of the gate. This model leveraged a strategic mix of internal and external resources. By engaging specific stakeholders in the visioning process, concerns can be addressed up front and a shared vision of the future developed, thereby increasing sponsorship for the transformation and kick-starting change management efforts. 4. 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.e., quality, timeliness, customer satisfaction) Inefficient processes Difficulty retaining CRE expertise Governance challenges High cost-to-serve Stakeholder alignment issues
Need a Kick-Start?
If you are considering transforming your service delivery model but are not sure how to kick-off the effort, seek compelling opportunities and catalysts for a broader change. 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.
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JPMC_CRET_Overview_Oct2006.ppt
FIGURE 2: CRE Service Delivery Transformation Interdependencies

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

-4-
Risk and Issue Management. Throughout the transformation, significant risks and issues will emerge. The TMO proactively identifies risk; develops risk mitigation plans where needed; and identifies, prioritizes and tracks issues affecting the transformation. Communications and change management are often deprioritized by companies but are important for an effective transformation. A critical part of Toyota RE&Fs change management approach was to engage their associates in the design of the future state strategy. Everybody was involved from the beginning. This helped from a buy-in perspective because people had context, said Myra Chung, National Manager of RE&F for Toyota Motor Sales. Open communication across the leadership team was necessary to ensure they were all on the same page and communicating the same information to the organization. Many organizations underestimate the time commitment, resources and experience needed to bring about transformation. The TMO puts in place the structure, leadership and governance to sustain an effective transformation and achieve the envisioned results. Figure 3 highlights the standard components of a typical TMO. 7. Prepare for Implementation Planning for implementation begins during the transformations design phase. This includes assessing the change readiness of the CRE function, developing training materials and plans and creating an implementation plan. Transformation activities need to be appropriately scoped and prioritized. Prioritization involves identifying interdependencies and establishing a logical sequencing of initiatives that sets an appropriate pace of change for the organization. Many of the challenges organizations experience during implementation are because of planning pitfalls. Common pitfalls include: Getting a late start in planning and preparing for implementation activities, resulting in a delay in transformation overall and a loss of momentum Not leveraging work that may already be underway or completed, under the auspices of other CRE or company initiatives. This oversight can result in unintended overlaps and potential conflicts in priorities, resources and timing. Accelerating the design phase and short-cutting implementation planning to demonstrate action and earn quick wins. In doing so, key elements can be missed, resourcing short-changed and interdependencies unanticipated. Preparing for implementation should be embedded into the design of the future state. AIG and Thomson Reuters were undergoing significant enterprise-level restructuring concurrent to transforming their CRE service delivery models. To effectively prepare for implementation, both strategically included representatives from legacy organizations in the new organization design. As a new, yet unproven center-led function, you only have one chance to make a first impression, said Staal. Over time, we adjusted our resource mix to optimize service delivery, but for day 1 we made sure we had all hands on deck. Our experience indicates that effective and sustainable ser-
vice delivery transformations are approached holistically, well planned and appropriately resourced. Leveraging a time-tested approach for transformation and understanding the potential pitfalls will lay the foundation for future achievement. It is important to remember that while the official transformation has a start and target end date, it is really a journey that will continue to evolve with the CRE organization and the business over time. Authors Note: We would also like to thank Joseph Barile (AIG), Douglas Beebe and Myra Chung (Toyota Motor Sales) and Christopher Staal (Thomson Reuters) for sharing their CRE transformation insights.
About the Authors
Lily Miskimmin, Manager, Strategy & Operations Practice, Deloitte Consulting LLP, is a member of the Real Estate & Location Strategy Team.
Griffin James is a Manager with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Real Estate & Location Strategy Team.
Francisco J. Acoba, MCR, SLCR, is a Senior Manager with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Real Estate & Location Strategy Team.
Mark Klender is a Principal with the Strategy & Operations Practice within Deloitte Consulting LLP and is a member of the Shared Services Team.
For more information on this topic, please search for this title on our Knowledge Center Online. Service Delivery and Outsourcing: Strategic Alignment of the External Resource Network
35
The Rise of the Human Factor:

Workplaces for Well-Being
BY KAY SARGENT, ASID, IIDA, CID, LEED AP ID+C
lthough designing sustainable environments, driving down cost and integrating rapidly emerging technology have been our focus in recent years, ultimately we are still designing for people. Designing sustainable environments is a good start, but sustainable practices have evolved and new guidelines have emerged. The focus today is less on checklists and more on common sense sustainability. Many clients are opting for ABC all but certified interiors where doing the right thing and being a good corporate citizen are more important than getting a plaque on the wall. Many clients are looking to reduce their overall square footage to not only reduce their costs, but their carbon footprint as well. And the Living Building Challenge has cast a new light on the importance of eliminating chemicals from the workplace. At the same time, BIFMA e3 level is evolving as the new standard for measuring the sustainability of furniture, and LEED 2012 will address a broader range of issues, including walkable sites and ergonomics.
Health and Technology Challenges in the Office Not that designing sustainable buildings isnt important, but lets face it, sitting stagnant in a chair at a desk staring at a computer all day is killing us faster than whatever any wall is off-gassing. We need to start focusing on designing for the well-being of the occupant. People were never meant to sit for long periods of time. Until recent decades, we were a manufacturing or agricultural-based work force. People were active and on the move. Recent studies have shown that sitting for six to eight hours a day has the equivalent effect on your health as smoking a pack of cigarettes a day and can take up to two years off of your life span.1 A recent Gallup study showed that up to 72 percent of people are sleep-walking through the day.2 A recent study by Healthways and Gallup has shown a direct tie between ones personal well-being and productivity.3 We need to get people moving again not only to stimulate their minds but their bodies as well.
36
Today, because so many people are focused on trying to measure productivity, they are forgetting the goal is ultimately to improve it. We know that healthy, happy and engaged workers are far more productive and willing to work longer hours than employees who are disengaged and suffer from presentee-ism. Finding ways to have a healthy, engaged work force is essential. The positive impact technology has had on workplaces today has been well documented. Fewer people can produce more work in a shorter timeframe, and we have rapid access to massive amounts of information. But what is starting to become apparent is the negative impact technology has had on us as well. Just because we can be accessible 24/7 doesnt mean we want to be. And the stress of being always on with constant distractions is negatively impacting our productivity and health. The ping factor the constant beckoning of technology is reducing our efficiency and productivity not to mention our sanity. We are on the verge of a total loss of privacy and the ability to concentrate, neither of which bode well for innovation. After all, throwing people into an open space does not equate to collaboration, it often results in mindless chatter that causes some people to simply shut down. People need time and space to think, balanced with time and space to build bonds with co-workers. Bonds build trust, which leads to open collaboration, which fosters innovation. We need to get to the point where we are running technology, versus technology running us. Along with the new ways of working, there needs to be a shift in how we design and manage our facilities to handle an increasingly mobile and flexible work force. Buildings were not designed for the varied occupancy we are now encountering. Having 50 people in the space one day versus 150 the next impacts the way we manage our facilities. Not only does it impact the mechanical system, it also impacts parking, hours of operation, security and overall operations. With a greater number of workers in denser, open spaces all of whom are sharing more surfaces and more germs people will get sick more often unless we change the way we manage, clean and filtrate our facilities.
Figure 1: The Pendulum Effect, Generational Archetypes & Archetype Ages
Source: William Strauss and Neil Howe Research
We need to get to the point where we are running technology, versus technology running us.
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. Work today is dynamic and can vary day to day and hour to hour. Creating a varied work environment through activitybased design will help engage employees, improve their wellbeing and increase productivity. So how do we accommodate all the various work styles, demographic groups and generations in the workplace today? We give people choices. Activity-based design is being introduced as the new style of work. No longer are people expected to go to the office and sit in one spot all day like potted plants. After all, the most flexible thing in any environment isnt the
walls or the furniture its the people. One size misfits all, and there is no one perfect workplace. The key is giving people choices and spaces that stimulate their minds, bodies and imaginations. Our challenge is finding each companys DNA, and demographics, work styles, regional influences, organizational structure and culture all factor into the DNA equation. Our aging inventory of buildings will need to be retrofitted to accommodate new work patterns. Reusing existing buildings to accommodate varied occupancies and uses will be essential to accommodating the emerging work force and re-energizing our people and our communities. Recycling and reusing buildings will mean we need to make alterations to accommodate a wider variety of needs and uses in facilities that were originally designed for a sole use. Our buildings need to accommodate the multiple-faceted aspects of how we work today as well. If you follow the concept that history repeats itself and is cyclical, we are in the age of crisis. If the archetype cycle holds true, the Age of the Hero will follow. The Millennials (yes, the Millennials everyone has been berating) are poised to take us into the new cycle as the heroes. Their high expectations, strong desire to participate and make a difference, and yearning for social action set them up ideally for the task. And per the archetypes cycle the generation to follow the Millennials whom Ill refer to as the Digital Natives, are posed to be the Age of the Artist. 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.
37
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.
They are the generation that could bring the rise of the human factor to fruition. Ill also argue that to truly move forward, we need to abandon the notion of change management. Change is inevitable today; we dont need to try and control or manage it, we need to harness it. In our new reality, change is part of everyday life; we need to help our clients move in a positive direction through forward facilitation. Helping our clients embrace emerging work patterns and preferences to truly empower and engage their employees will unlock their true potential.
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, but we need to balance it with the value of design and empowerment. And we cant lose our focus on designing sustainable environments, but we can ensure that we value our own personal sustainability and well-being as well. Technology will continue to rapidly evolve in ways we cant even imagine, but we can get the impact it has on us in check. We need to design spaces that support the way we work today and empower us through employee engagement. The most valuable resource we have is our people, and we cannot forget that. The spaces we are designing are meant to support us, not the other way around. Today, the new focus should be on the rise of the human factor. Editors Note: CoreNet Global advocates the quality of working environments and work experiences as socially responsible corporate practices. For more information, please visit www.corenetglobal.org. Sources: 1 http://www.diygenius.com/your-desk-job-is-killing-you-thetruth-about-sitting-down-infographic/. 2 http://www.thesocialworkplace.com/2011/11/18/you-asked-ianswered-a-social-workplace-starts-with-culture-and-engagement/. 3 Healthways Well-Being Assessment Results, 2010. About the Author
Kay Sargent, ASID, IIDA, CID, LEED AP ID+C, is Vice President Architecture, Design and Workplace Strategies for TEKNION. She has more than 26 years of experience as a practicing design professional and is an active member of CoreNet Global, CREW and IFMA. She also lectures regularly, teaches at the university level and has authored several articles and white papers.
Figure 3: Demographics of the Future Workforce (Birth-Year Ranges)
For more information on this topic, please search for this title on our Knowledge Center Online. Workplace: Shifting Work Styles Are Creating Shifts in Where We Work The Consumer-Led Workplace: Lessons from Facebooks Vending Machines
38
2013 GlobAl AwArdS ProGrAm
CoreNet Global is pleased to announce the 2013 Global Awards Program, which encourages greater participation from all organizations regardless of industry sector, size or global region. The 2013 Call for Nominations for three awards Sustainable Leadership Award, Economic Development Leadership Award and the Industry Excellence Award begins now and ends 15 February 2013.
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end user proFile
BY CHELSIE BUTLER
Microsofts corporate offices in Paris
Microsoft EMEAs Innovation Leader: Susan Wagner

In charge of managing Microsofts portfolio in Europe, Middle East and Africa in 69 countries, with 214 sites and 5.1 million square feet (473,806 square meters), Susan Wagner, who has been with the company for 14 years, is a busy person. As Senior Director of Real Estate and Facilities EMEA, Wagner along with her 40-person corporate real estate (CRE) team is in charge of 15 percent of the Microsofts global portfolio. She and the rest of the CRE team are in charge of client relationship management and business alignment, portfolio management and long-range planning, service provider management and financial accountability. Working at Microsoft According to Wagner, the working environment at Microsoft is intellectually challenging, and the culture keeps one always looking forward as well as feeling like a part of an organization that makes an impact on the employees, culture and business. The environment is energizing, and I can truly say it has given me a number of opportunities to make some great impact as part of the teams on which Ive served, she said. Microsofts corporate culture is one of innovation, collaboration and a strong drive for excellence. Its main business
drivers are its clients and consumers, as well as the business drivers focused on expanding the companys breadth of software, services and devices, both at a more enhanced view of the consumer level and at the enterprise level. As far as whats influencing our real estate strategy today, as with any company, we have to prioritize our investments and our costs with our global priorities, said Wagner. Improving Service Delivery At Microsoft, external service providers are typically involved in the execution of facilities management, capital projects and real estate transactions. Last October, the company rolled out its Integrator Model, which is a global initiative to evolve the previous CRE Vendor Model and provide a more effective service delivery function one that is more strategic
40
end user profile
in supporting Microsofts clients business goals and provides greater value both globally and locally. This model will provide more consistent and improved delivery, and improved communications will allow our CRE team to spend more time on strategy and planning, said Wagner. It will put in place a global program management vendor that will be responsible for coordination and integration of underlying service providers. Ultimately, the result will be a more strategic alignment of the portfolio with the needs of the business. Workplace and Sustainability Microsofts CRE team has developed a function-based workplace that delivers workplace solutions to its employees based on the type of work they are doing and the kind of spaces they need. There is a range of collaborative spaces and focused spaces what Wagner deems a no-one-size-fitsall workplace. The team issues an internal customer satisfaction survey annually designed to provide feedback on how the team is doing in a number of categories. Employee experience and productivity are key contributors to our workplace design, she said. Although Microsofts CRE team is not the sole owner of the companys sustainability initiatives, it plays a key stakeholder role as part of the global team. Were looking at areas related to energy and carbon savings, said Wagner. There are different levels of impact we can have, but we are implementing the basics of recycling, moving to composting where we can, changing out our lighting for more efficient fixtures all things that work toward our sustainability goals in reducing Microsofts carbon footprint. A Look Ahead For her team, Wagner says there will be much further development to link and collaborate with other teams that have an impact on CRE and vice versa, such as information technology and human
Susan Wagner
The environment is energizing, and I can truly say it has given me a number of opportunities to make some great impact as part of the teams on which Ive served.
resources. As far as CRE in general, she believes that as the impact of mobility and virtual engagement become more enhanced, there will be some major shifts in workplace design and the impact on various work forces in the next three to 10 years. Were going to see major shifts as a result of the overall connectedness people have, she added. 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. 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. As a Paris resident for the last two years, she has been part of CoreNet Globals France Networking Group, which offers an opportunity for CRE professionals in that area to learn, develop networks and share knowledge. Wagner served on the Program Review Committee for the Paris Summit in 2011, and she gave a presentation on Microsofts Global Integrator Model at the London Summit last fall.
January/february 2013 | the leader
41
SERVICE PROVIDER proFile
BY CHELSIE BUTLER
Beijing New China International Exhibition Center
Yaomin Xue: tvsdesigns asia Pacific Manager aKa liaison extraordinaire

Yaomin Xue started his career with tvsdesign in 1999 as the Asia-Pacific Manager based in Atlanta, where he began to spearhead the firms migration into the China market and to provide more effective communication and efficient service with the firms clients in the Asia market. After much traveling from Atlanta to various cities in China, meeting with clients and partners, he moved back to China two years ago and is now the firms Asia Pacific Director. As architecture has always been Xues dream, he very much enjoys his career. In his current director role, he explores prospects, obtains projects and negotiates contracts, but he also participates in the early stages of design to help the team fully understand the clients requirements and direction particularly from a local perspective and then serves as the liaison between the tvsdesign team and the Chinese local design institutes (LDIs) during the projects entirety. These LDIs typically focus on the projects engineering aspects, including structural/MEP services during the design development and construction phases. Both parties work closely together throughout
all phases of the project. Xue also travels all over China on a regular basis meeting with prospective clients or attending opening ceremonies on completed projects. In addition, he prepares the firms yearly China business development plan and budget. According to Xue, important aspects of his job include understanding the local culture and needs and delivering the appropriate services to meet those needs, which he says can be challenging, particularly in the first few years. Another challenge for my team is delivering services on time in such a rapidly growing country, he said. Schedules can be very demanding and hard to meet, and we need to stay flexible. As far as the future, Xue feels that the work force in China will be more educated, more transparent and more global (see cover story on page 12).
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SERVICE PROVIDER profile
Sustainability and Workplace Trends The firms approach provides top-quality design across all markets, with a balance of function and aesthetics. Xue said he was impressed with the firm because of its broad project portfolio, which encompasses retail, hotel, convention center, office and mixed-use projects, and in the last decade, tvsdesign has become truly global, with offices and projects in the Americas, EMEA and Asia Pacific. Soon after the firm began its China initiative, it won several major commissions, including the Dalian Monumental Tower and master plan in 2009, the mixed-use Suzhou Modern Plaza in 2010 and the Tianjin Meijiang Convention Center and Galaxy Mall in Tianjin. In 2011, tvsdesign was awarded the design of the Ningxia International Convention Center, home to the China-Arabic States Economic Forum, expected to open in 2015. The firm has been paying close attention to the sustainability aspects of its projects for more than 10 years, and more than 50 percent of its designers have obtained LEED accreditation. Here in China, just like everywhere else, sustainability and energy savings are always considerations in our proj-
Yaomin Xue
which was completed in 2005, features natural lighting in the exhibition halls, which eliminates the need for artificial light during routine maintenance and booth set up during daytime hours. A flat roof was included in the project for
Another challenge for my team is delivering services on time in such a rapidly growing country. Schedules can be very demanding and hard to meet, and we need to stay flexible.
ects, said Xue, and we use local materials and energy-saving solutions as the foundation of our designs. For example, the Beijing New China International Exhibition Center (left), the future installation of solar panels, low-energy glass was used for the curtain walls, and recycled water is used in the propertys landscaping. As far as the corporate office building
workplace is concerned in China, employees tend to appreciate naturally lit, open workspaces with flexible layouts that reflect their local culture. Responding to local culture to some extent, but also to emerging international standards, the floor plates are smaller, daylight is highly prized, and flexible layouts are a priority. The core-to-window depth of the floor plate is shallower than a typical U.S. domestic floor plate usually nine meters allowing for more energy-efficient lighting solutions. Responding to the need for flexible workplace designs, raised floors are being used more frequently. Similar to the U.S., the office buildings are designed around the needs of a corporate anchor tenant while accommodating leasehold improvements for multiple tenants. Connection with CoreNet Global Xue became a member of the organization in 2002 and has attended many Atlantabased events. He also attended the first Summit in Shanghai in 2004, as well as the Singapore Summit in 2007, and plans to attend the Shanghai Summit in March.
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economic developer proFile
BY SONALI TARE
Salt Lake City, Utah
Utah: Where Collaboration, Innovation, talent and Stability Come together

EDCUtah is a 25-year-old private nonprofit whose aim is to attract business to the state of Utah. Run on a membership model and founded by utilities and two major banks, EDCUtahs membership consists of a diverse group of companies from banks and construction companies to furniture manufacturers. About 60 of its 260 strong members are cities and counties throughout Utah. Seven years ago, the organization was restructured into an alliance with the state, with the state becoming a direct contributor to the budget. 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, as well as the private sector, said Todd Brightwell, Vice President of Business Development for EDCUtah. Our research department aids in companies being able to carry out their due diligence. All of this culminates in us being able to bring quality jobs and capital investment to the state. The alliance with the state and the state being part of the Governors office rather than an agency has allowed Utah to put resources into the economic development process. With the emphasis on industry development and economic stability, which has allowed them to weather the ups and downs of the economy fairly well, Utah has been able to attract the following companies: Adobe, which brought in 1,000 jobs and $100 million in CAPEX
Procter and Gamble, which brought in 1,000 manufacturing jobs and $540 million in CAPEX Goldman Sachs, which brought in 350 jobs and $20 million in CAPEX Carving out a Niche Utah has also been able to appeal to certain niche industries like aerospace, and top aerospace manufacturers have been flocking to the state. Companies such as ATK, Boeing and Northrup Grumman all have a presence here. When asked, what it was about Utah that attracts these high-end manufacturers, Brightwell said, The talent here has proven to be very competitive, both the engineering and manufacturing talent are of very high quality. Additionally, Utah is also home to top-notch advanced composites manufacturers such as Hexcel. As such, we are able to offer a unique environment, which is attractive to the aerospace industry from both a supply chain and direct manufacturing and development standpoint.
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economic developer profile
Building on Stability Another factor for many companies moving to Utah and more importantly, staying in Utah, has been that the state has emerged relatively unscathed through the economic downturn. The lure of a comparatively lower-cost real estate market has in the past drawn companies like Amer Sports. Amer Sports, which is the parent company of brands such as Wilson Sporting Goods and Salomon Skis, was looking for a site to consolidate their North American outdoor products division. They chose Utah and have been very happy with that decision. Locating in a lowercost market allowed them to weather the downturn much more effectively. Having Amer Sports here was also a tipping point in terms of attracting other large outdoor product companies, added Brightwell. Attracting the Best While the Utah real estate market is relatively lower in cost, as a result of not having over-built, the market is still very competitive. This is a key factor in attracting business. Another key factor is the quality and availability of talent. Utahs colleges and universities have more than 190,000 students enrolled, and the curriculum is geared toward giving students the best mix of education. Language skills are another attraction. With more than 180 languages spoken fluently at the universities and 33 percent of the population speaking more than one language statewide, companies with language needs have found what they need here. Goldman Sachs needed Portuguese speakers for a project in South America, said Brightwell, and they were able to find 25 Portuguese speakers in their Salt Lake City office, almost thrice as many as compared to other offices.
Growing and Evolving All these factors have combined to make Utah a uniquely attractive market, and by the fiscal year ending June 2012, EDCUtah had its greatest single year in
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.
terms of attracting jobs and capital investments. To continue to compete competitively with larger markets, the organization aims to continue evolving and excelling at what it does best. Its level of attention to detail is something it prides itself on, as is the ability to bring about collaboration and cooperation among the various players. Continuing to nurture alliances, relationships and partnerships is something that, according to Brightwell, will allow the organization to grow and evolve. Being
business friendly, building on incentives and keeping bureaucracy at a minimum also helps facilitate additional business. Cultivating labor is imperative. With an average age of 29 and 20 percent of the population in school, the current and future talent and market for investors is secure here. Going Local with CoreNet Global Brighwells association with CoreNet Global is more than six years old, and he has attended multiple summits. At past summits EDCUtah has also had a booth by themselves and also with other Mountain States, such as Idaho and Wyoming. According to Brightwell, CoreNet Global is an important avenue for EDCUtah; to get up-to-date education as well as connecting with corporate real estate professionals. Brightwell is on the board of the Salt Lake City Chapter, which also aims to extend to parts of Idaho and Nevada. The chapter has been able to attract a substantial number of economic developers and service providers; they hope to also make headway into the end user sector.
Todd Brightwell
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Special intErEst FEAtUrE

Montreal, 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, Canadas economy continues to grow, albeit at a modest pace compared with expansions of years past. The countrys 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. Canadas overall economic well-being and stable commercial real estate market fundamentals, characterized by low to mid, single-digit vacancy rates, along with historically low interest rates, are driving the flow of capital across most regions and asset classes something that we have not seen to the same degree in the U.S., according to a statement by Mark E. Rose, chair and CEO of Avison Young, the Toronto-based commercial real estate services provider. In its Fall 2012 Canada, U.S. Commercial Real Estate Investment Review, Avison Young reported that commercial real estate investment has rebounded strongly from the depths of 2009.
At the markets peak in 2007, approximately $24 billion (CAD) worth of office, industrial, retail, multi-residential and land changed hands in transactions valued at $1 million and more. With the onset of the recession in 2008, asset sales dropped to $20 billion, bottoming out in 2009 at $12 billion. Since then, according to Avison Young, Buyers have come off the sidelines, deploying $18 billion in 2010 and $21 billion in 2011. Rocky View County: Western Canadas Distribution Center Located in the province of Alberta in the Calgary region, Rocky View County has seen significant investment activity on the part of new businesses during the past two years. Major projects include construction of the 1.2 million-sq.ft. (111,484-sq.-m.) CrossIron Mills regional shopping center, an $800-million investment; a 400,000-sq.-ft. (37,161-sq.-m.) Walmart Food Distribution Centre ($115 million); the CN
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Sowing the Seeds of Success
Looking to relocate or expand your operation?

Consider Balzac home of the new CrossIron Mills shopping centre, and one of the provinces most dynamic areas of commercial and industrial development. Minutes from the City of Calgary, Balzac offers the perfect environment for a thriving enterprise of any size: direct access to the Queen Elizabeth II Highway and Calgary Ring-Road; close proximity to the Calgary International Airport; a readily available talent pool and an expansive consumer base; and no business tax. Cultivate your companys success in Balzac. Reap the rewards of relocating to Rocky View County.
www.thinkingalberta.com
special interest Feature - Canada: a diverse eConomy on the upswing
The recent investments by CN Rail, Walmart Canada and other major U.S. retailers demonstrate and reinforce the role of Rocky View and the Calgary Region as the center of warehousing and distribution for western Canada.
Logistics Centre at Conrich ($300 million) and most recently, the ing in the Balzac area, as well as greenhouse developments that attraction of a large U.S retailer (whose name was undisclosed as of would make use of CO2, waste heat (from adjacent power plants) press time) who will be building its Western Canada warehousing and nutrient-rich compost products. complex of 1.5 million square feet (139,355 square meters). 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, according to Rocky View County vert much of the areas grey water (i.e., wastewater from domestic Economic Development Manager David Kalinchuk. activities such as laundry, dishwashing and bathing) into potable With an area population of approximately 1.3 million people, water that could be used in a range of value-added agri-food promany of them are young, many white-collar professional jobs with cesses, including chicken and turkey processing. higher-than-average incomes and levels of overall affluence. 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, said Kalinchuk. Saskatchewan is expected to The recent investments by reach a record $20.2 billion in CN Rail, Walmart Canada 2012, according to the Hon. Get connected to Norfolk County and other major U.S. retailers Bill Boyd, Minister of the Located on the coast of Lake Erie, demonstrate and reinforce the Economy for this province. Norfolk County oers easy access role of Rocky View and the During 2012, there have to markets, a skilled workforce, 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. tion for western Canada, ments in Saskatchewan all of Food production is our specialty. according to Kalinchuk. which demonstrate the comWe grow more sweet corn, Meanwhile, Albertas abunpetitive business environment strawberries, peppers, pumpkins, dance of oil-sand and shale and vibrant economy that asparagus and ginseng than gas reserves plays a signifiexists in the province, he said. anywhere else in Canada. cant role in making Canada New investments announced the worlds largest exporter during the past year are led by of oil and gas to the U.S. Hitachi, which is centralizing And on the infrastructure its operations in Canada, intefront, Calgary International grating its Hitachi Canada and Airport is Canadas thirdHitachi Canadian Industries largest airport, with expanunits and establishing Hitachi sion on tap to accommodate Power Systems Canada to be major growth and increased based in Saskatoon. passenger and cargo volumes. As Canadas second-largest Meanwhile, in the field oil-producing province, its of sustainability technology, third-largest natural gas proKalinchuk said there has been duction province, a provider significant interest in largeof one-third of Canadas pri1-800-699-9038 | norfolkbusiness.ca scale commercial compostmary energy production and
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special interest Feature - Canada: a diverse eConomy on the upswing
As Canadas second-largest oil-producing province, its third third-largest natural gas production province, a provider of one-third of Canadas primary energy production and one of the worlds leading mining centers, Saskatchewan has also seen a number of new investments based on its abundant natural resources.
An illustration of Ontarios Garden in Norfolk County
Quebec, Canada
one of the worlds leading mining centers, Saskatchewan has also seen a number of new investments based on its abundant natural resources. capacity of urea and related fertilizer products (currently 1.1 million tons annually) by 2016 at a projected cost in excess of $1.5 billion. Meanwhile, Hitachi has announced that it is centralizing its operations in Canada, integrating its Hitachi Canada and Hitachi Canadian Industries units and establishing Hitachi Power Systems Canada, to be based in Saskatoon. As Canadas second-largest oil-producing province, its thirdlargest natural gas production province, a provider of one-third
of Canadas primary energy production and one of the worlds leading mining centers, Saskatchewan has also seen a number of new investments based on its abundant natural resources. Boyd reported that SaskPower recently announced it was partnering with Hitachi to construct a $60-million Carbon Capture Test Facility (CCTF) at SaskPowers Shand Power Station in southeastern Saskatchewan. The CCTF will allow international developers to fully evaluate the performance of their systems to capture carbon dioxide emissions from coal-fired thermal power plants. The facility is scheduled to be operational in the summer of 2014. Meanwhile, Saskatchewans potash mining companies are planning to invest up to $13.9 billion on expanding existing operations, a move that will nearly double the provinces potash production capacity by 2020. Also, German based K+S Potash Canada has decided to invest $4 billion to build the Legacy Solution Mine, the first new potash mine in Saskatchewan in more than 40 years. Additionally, according to Boyd, several other international com-
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special interest feature - Canada: a diverse eConomy on the upswing
panies, including global mining giants BHP Billiton and Rio Tinto, continue to advance greenfield potash projects. Our government has worked to create a stable economic environment supportive of business and commerce, said Boyd. The province is a low-cost and competitive jurisdiction, and Saskatchewan offers excellent infrastructure with ongoing government reinvestment.
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 years Jan.-June total. a rural municipality That said, there are located in southwestapparently a significant ern Ontario on Lake Many opportunities. Countless possibilities. number of transactions Erie. Once a center for in the pipeline for 2013, tobacco farming, the as transaction volume county is now home to spiked at midyear 2012 a flourishing agricultural with large office, indusbase, earning the name trial and multi-family Ontarios Garden (see sales leading the way. illustration on page 50). If youre looking for a great place to develop your business, And following a relaWhile the agriculheres two. tively lackluster 2012, tural industry continues If you want to be at the centre of the to world-class airport infrastructures theres renewed ecoto be a driving force aerospace industry, or you just want and industry partners, plus the to be at the centre of where it all bottom-line benets of the lowest nomic growth on tap for behind the Norfolk happens, youve come to the right set-up costs in North America. All the province of Quebec County economy, proxplace. Our airport sites are home to of which adds up to elevating both as a whole next year. imity to Lake Erie has 29,000 people working in 250 topight your service offerings and your prots. According to the Sept. created opportunities companies. And right now, we have To learn how we can help expand 1,500 acres available for development. your opportunities, contact us at: 12 Provincial Outlook for tourism, especially Here, you benet from close proximity realestate@admtl.com from Royal Bank of in cottage rentals, boat Canada (RBC), Quebec and day-trip tourists, should see growth in particularly during the real GDP return to warm summer months. its 10-year average of Recent economic 1.7 percent by 2013. development efforts According to RBC, here include the annual Improving prospects Norfolk County Official for Quebec exports to Map & Local Food the U.S. market and Guide. As part of a continued strong capital investment in the province (particularly tourism & economic development marketing partner program, ADM13107_IndustrialDev_4.3x6.75_E_v3.indd 1 11/28/12 5:08:10 PM in its resource sector) will be key drivers of this acceleration. the county and private-sector agriculture partners distribute ART COPYSTUDIO VERSION OK Meanwhile, a well-established aerospace industry, with its atten55,000GRAPHIC ofDIRECTOR DIRECTOR WRITER MANAGER to CLIENT copies the guide CREATIVE across Ontario, most of them SERVICES ADM-13107 DESIGNER dant secondary services and supply companies, is a major anchor consumers who are interested in travelling to Norfolk County INDUSTRIAL DEVELOPMENT AD EN of the Montreal economy, accounting for some 40,000 jobs and and staying overnight on a vacation or to purchase local food. 3700 RUE ST-PATRICK,
SUITE 240 MONTREAL, QUEBEC H4E 1A2
$1.1 billion in sales annually. Many of the areas businesses in this sector are located within two industrial parks at the two airports, Montreal-Trudeau and Montreal-Mirabel. Both the parks and the airports are managed by Aeroports de Montreal, the local airport authority responsible for the management operation and development of MontrealTrudeau and all-cargo Montreal Mirabel. A total of 10.7 million passengers made their way through MontrealTrudeau during the first nine months of 2012, up 0.8 percent over the same period of 2011.
SIZE
4.325 X 6.75 4C CORE NET
T 514.933.5225 F 514.933.7208 glgcommunications.com
COLOUR PUBLICATION
28/11/12
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industry traCkEr
By RICHARD kADzIs
Gillespie, CEO of the Americas for Manhattan Software, to answer some burning questions I had pondered following the insightful panel discussion on big data that took place there. Why is the Topic of BIG DATA so Important Today? Have you ever been in that awful 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. One of the challenges that has haunted the real estate and facility management professions is actually having and maintaining consistent, accurate data through all of the various parties that have access to or manipulate the data in databases like IWMs. It could be floor plans, move lists, business unit forecasts, leases, lease extensions, BIM drawings, occupancy data, etc. One could argue that we deal with BIG data or small data, but regardless, we need to have accurate and current information to support our recommendations and decisions, big or small. Who would have thought when we were kids watching the Jetsons or star Trek that the sexiest job in America in 2012 would be a data scientist? But that is exactly the title bestowed by Tom Davenport in his latest HBR article. Manhattan is lucky to have our own data scientist on our team whose background is in astro-physics and is an expert in this area of big data and analytics. Data analytics are literally a science. Is there Anything New about the Data We Are Dealing with Today Versus a Decade ago? yes, indeed!! There are five key differences: 1. The volume of data is huge. As of 2012, 2.5 exabytes of data have been created each day, and that doubles every 40 months. Data exists on absolutely every aspect of the CRE and FM business both
Its all about the DATA, stupid!

Extreme information management brings greater C-suite access, credibility
o, Im not calling you stupid. Im simply using this expression to get your attention. Why? There has never been more emphasis on big data or what is known as extreme information management. Big data is the corporate real estate (CRE) equivalent of Moneyball. Thats the name of 2012s hit movie about Billy Beane, general manager of the Oakland Athletics major league baseball team. He introduced data analytics to build a championship-level team and invested a lot less on payroll than most teams. Data is the currency of leadership success. Ultimately, it enables us to communicate the value not just the cost of CRE. As a CRE executive, if youre able to accomplish effective data management and data analytics, youll gain a distinct leadership edge and have more influence. Thats because collecting and analyzing data well = information you can trust = C-suite access and credibility resulting in CRE enterprise alignment. The enterprise leadership implications
are clear, and the performance management overtones are pronounced because data are the essence of all metrics. Data also illustrate why informed decision support becomes more critical today and tomorrow for major steps like: scenario planning Forecasting future space demand Tracking space utilization Increasing portfolio flexibility Enabling work and engaging employees Directly informing the triple bottom line Delivering integrated energy management systems Reducing risk After attending an education session on this hot topic at the CoreNet Global summit in Orlando, I went to Craig
Hayden Clay Craig Gillespie
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industry tracker
internally and externally. There is information from service providers, furniture vendors, architects, HR, IT, security, environmental experts, maintenance practices, space utilization, leases, etc. And it all revolves around enabling our places to support the best talent we can assemble for our business in both bricks and clicks. 2. The increase in the speed or velocity of data creation with the addition of real-time streaming data pouring in from sensors, mobile phones, video, social media, etc. Even databases that can be bought are now updated quarterly rather than in 10-year increments. 3. As mentioned, the variety of data has increased by adding unstructured data (social media, videos, sensors) to typical structured data like tables (in RDMS), cubes (BI) and data arrays (Excel). This increase in variety has been fueled by the metrospheric rise in mobile computing. 4. The accuracy or veracity of the data becomes even more critical as we make more time-sensitive and expensive decisions on real estate portfolios. We usually have little time to react to some aspect in our business changing instantaneously in the disruptive world we find ourselves working in today. 5. The variability of data from all these disparate sources makes it more diffi-
cult to assemble it all in one centralized location and make sense of its patterns and arrays of information. That is why OSCRE has begun to standardize how we describe space and cost of occupancy. What Process Do You Suggest to Think about the Care and Feeding of Big Data? There are four stages in approaching the management of big data: Phase 1. Identifying the right data need for CRE and FM is critical to ensuring you have the information to make the most effective and efficient decisions. You should identify all the sources of information for
Data is the currency of leadership success. Ultimately, it enables us to communicate the value not just the cost of CRE.
creating a centralized database for all of your leased and owned facility and real estate data. This will ensure you have the most accurate snapshot of your real portfolio both today as well as forecasts for the future. Phase 2. Upon completing the first phase of what data you need to track, you must figure out the methodology of
data collection for this disparate information from all of the sources. Some of it can be integrated electronically from existing sources (i.e. CAD, HR, IT, Excel and other siloed databases), some of it from new unstructured sources (i.e. social media, video, sensors), and some will still require manual entry (for new lease or building information). Phase 3. Analysis of big data is what makes the first two phases worthwhile. This is the stage where you beg, borrow or steal a data scientist (see Tom Davenports 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. Phase 4. The final stage is making sure you have a maintenance program in place to ensure that the database is updated either electronically or manually according to a particular schedule. This will then give you the confidence that transparency of information can exist and everyone can trust the authenticity and accuracy of the CRE/FM big data. Authors Note: Special thanks to Nancy Sanquist of Manhattan Software.
Mercks Clayton Hayden: Its all about the Data

Manhattan Softwares Craig Gillespie shares how Clayton Hayden, Director of Global Real Estate Services (GRES) at Merck & Co., is the perfect example of a CoreNet Global member who has benefited incredibly from understanding the value of big data and analytics for CRE and FM. GRES was formed in 2006 to facilitate effective and integrated planning for the optimization of Mercks global 30+-million-
sq.-ft. (2.8+-million-sq.-m.) real estate portfolio. They began the journey of developing an integrated workplace management software database to link disparate data and provide transparency of information by creating a single depository. But the GRES group had no idea that in only three years from that time it would merge with another pharmaceutical giant, Schering Plough. Now they not only had a tremendous amount of new information to deal with, but at the same time they were asked to contribute $200 million
to the synergy target promised to the shareholders following the merger. As Hayden stated during Manhattans 2012 Executive Summit held at Harvard University, Its all about the data. By having the processes and technology in place, they could add the Schering information to their own big data set, and since analytics were embedded in the Merck culture, use tools to mine the information to identify the best value capture opportunities while leveraging quick wins. The GRES planning process, based
on accurate and timely data, will exceed the $200-million cost reduction goal. It integrated the C-level, CRE, FM, finance, legal, HR and IT functions and enabled business growth, flexibility and innovation. What better benefits can there be? So, yes, Its all about the data for huge cost reductions, integration opportunities and productivity increases. As Gillespie summarized, I believe in CRE, we have just begun to realize the massive benefits of big data. What do you think?
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dashboard 3rd quarter 2012
City
lease rates (usd/sF/year) *Office **Industrial $8.50 $9.50 $17.00 $16.00 $13.50 $5.50 $14.00 n/a $6.50 $17.00 $20.00 $9.50 $11.00 $10.50 $4.10 $5.28 $5.00 $7.57
Vacancy rates (%) Office 16.4 13.5 6.1 14.7 7 5.4 3.5 20 6.8 6.5 7.5 5.6 8.2 7.9 17.7% 14.2% 10.3% 13.9% Industrial n/a 3 n/a 1.4 6.8 1.5 n/a n/a 6 17 n/a n/a n/a n/a 10.1% 5.6% 7.8% 10.9%
Net Absorption (%) Office 0.3 1.8 0.4 6.6 1.1 4.9 1.7 9.1 19.3 7.1 6.8 n/a n/a n/a 487,671 302,673 1,180,863 -369,060 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 3,471,357 -1,025,076 -231,222 423,975
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 $25.17 $28.82 $58.77 $36.10 $52.50 $75.00 $65.50 $122.50 $220.00 $75.00 $107.50 $195.00 $170.00 $42.50 $51.50 $151.50 $112.50 $94.50
source: Cassidy Turley

* Average full service ** Average NNN All office rental rates reflect CBD & Suburban unless otherwise noted New York office includes Midtown, Midtown South and Downtown Manhattan; rent reflects the overall average for Class A and Class B in those submarkets New York industrial reflects Northern New Jersey statistics Washington D.C. industrial reflects Suburban Virginia, Suburban Maryland statistics Washington D.C. office reflects Downtown Washington D.C., Suburban Virginia and Suburban Maryland
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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, we respond with leading-edge research, timely case studies, knowledge sharing and innovation, including:
> Helping you adapt quickly and effectively to todays new normal and economy. > Providing timely findings on critical cost reduction strategies surrounding matters impacting your bottom-line. > Developing forward-looking and industry-bending hypotheses around issues like changing lease accounting standards, global logistics challenges, and economic influences on sustainability strategies. > Conducting ground-breaking research through Corporate Real Estate 2020 and annual State of the Industry reports defining leading-edge practices. > Recognizing professional achievement through our Global Awards Program and professional designations: Masters in Corporate Real Estate (MCR) and Senior Leader Corporate Real Estate (SLCR). > Facilitating knowledge-sharing and networking channels through Global Summits, Chapter education sessions, and Corporate Partner Program Discovery Forums.
CoreNet Globals promise to you is that through our network, professional development, leadingedge research and other benefits, youll learn how to more effectively influence, or even change, major C-Suite and business drivers.
Lee R. Utke, Director, Global Corporate Real Estate Whirlpool Corporation
CoreNet Global has a 10-year history of connecting and providing value to you and your company through every facet of the network and supply chain of the corporate real estate industry from end users and occupiers to service providers and economic developers.
RENEW your 2013 membership today at www.corenetglobal.org.
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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.
Corporate Partners
WellPoint
Wells Fargo
Deutsche Bank AG
Reed Elsevier The Clorox Company eBay Inc.
Community Sponsors
(Workplace Community Gold Level) (Workplace Community Silver Level) (Workplace Community Bronze Level)
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thank you
USAA
Eli Lilly & Company
LMC Properties, Inc. International Monetary Fund State of West Virginia
T-Mobile
(Strategy & Portfolio Planning Community Gold Level)
(Manufacturing & Industrial Community Gold Level)
(Facilities Management Community)
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members on the move
Wirtz Beverages new 605,000-sq.-ft. (6,039-sq.-m.) corporate headquarters located in Cicero, Ill., has recently been completed. The new facility WBI Center consolidates four locations into one hub for sales, distribution and training programs. Ware Malcomb provided architectural design and interior design services for this project that integrates offices, conference centers, training facilities with warehouse and distribution areas. Several technological features were incorporated throughout the facility, including digital signage screens embedded in hallway floors and lobby areas. Ed Schreyer has been promoted to President, Agency Brokerage/Asset Services for the Americas at CBRE. He will direct the companys commercial real estate management services in the Americas while continuing to lead the firms agency brokerage practice. Alex Darragh has been appointed to oversee the companys Global Corporate Services in Canada, Latin America and the Caribbean. He will work with CBRE leaders to enhance client service and accelerate business growth in those regions.
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. The merged entity will combine the local operations of Brookfield Multiplex Services, with the Australian and New Zealand business of Johnson Controls Global WorkPlace Solutions.
Business Investment program. KEDFA also approved LOral for tax benefits up to $800,000 through the Kentucky Enterprise Initiative Act, which allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing equipment. Sue Bennett of Bennett Design Associates was ranked number 57 in the 14thannual W100 ranking of Canadas Top Female Entrepreneurs, produced by PROFIT Magazine and Chatelaine. The ranking is a composite score based on the size, growth rate and profitability of their businesses.
Sue Bennett
Cathrine A. Cotman has Outdoor Mega Mall Bucharest joined Cassidy Turleys corporate services team as Senior Vice President of Strategy. She will serve the companys SunTrust account, leading portfolio optimization efforts as the Manhattan Software has Mega Mall, a modern retail scheme in Bucharest, Romania, has obtained a bank seeks to transform its building permit to get started this year. 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. Ed Verret has also Mall Bucharest, and Real 4 You Group is the developer. Carrefour, Flanco, Management Association joined the firm as Senior Altex, Slot Point Casino and Cine Grand, C&A, H&M, Kenvelo, Lee Cooper, (IFMA). Nancy Johnson Managing Director, and he Celio, Lashez and Office Shoes, have already secured locations in Mega Mall. Sanquist, Manhattan Vice will serve as the Alliance President and IFMA Fellow, Executive leading Cassidy received the Distinguished Turleys partnership with SunTrust. Author Award for a Book, along with LOral USA plans to add 211 jobs and Lee Black has also joined the firms Diane Coles Levine, Director of Workplace invest more than $42 million in Kentucky, Los Angeles Metro office as Executive Solutions, SCAN Healthcare, 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, tenant repreFoundation publication, Work on the Move: approved the company for tax incentives sentation and project leasing platforms. Driving Strategy and Change in Workplaces. up to $5 million through the Kentucky
58
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.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&Ys trex Morris
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aeroports de Montreal ....................................................................................... 51 CoreNet Global (Global awards) ....................................................................... 39 CoreNet Global (Membership) .......................................................................... 55 CoreNet Global (Shanghai Summit) ................................................................. 11 CoreNet Global (las Vegas Summit) ................................................................ 31 CoreNet Global (Spring Forward) .................................................................... 2-3 CoreNet Global (thank You) ........................................................................ 56-57 hoosier energy ...................................................................................................... 7 Interface americas ................................................................................................ 5 Knoxville-Oak ridge Innovation Valley Inc. ...................................................... 60 Norfolk County .................................................................................................... 49 rocky View County ............................................................................................. 47 Saskatchewan Ministry ...................................................................................... 48 Sodexo .................................................................................................................. 9
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Be Global. Act Local.

Cover Story Facilities Management in China: Growth in Sustainability and Strategy

Technology Simple Lighting Control Retrofits Offer Sophisticated Benefits

Corporate Real Estate Outsourcing: A Transformative Look 20 Years Later

Dashboard 3rd Quarter 2013 Figures from Cassidy Turley

The Rise of the Human Factor: Workplace for Well-Being

Special intereSt FeatUre

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letter FrOM THE EdiTor

By Changing Nothing, Nothing Changes

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Imagine the Power...

Sodexo, the world leader in Quality of Daily Life Services.

Corporate real estate in the news

Get answers to timely questions including:

Networking Break General Session 2

Facilities Management in China:

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Simple Lighting Control Retrofits Offer Sophisticated Benefits

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Lights dimmed by 80%

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About the Author

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Lower Costs & Greener Workplaces:

UBSs offices at 5 Broadgate in London.

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About the Authors

Peter Welsby is Maces Program Manager/ Operations Director.

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Corporate Real Estate Outsourcing:

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Key Milestones in the Evolution of Corporate Real Estate Outsourcing

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