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CommercialRealEstatePropertyManagement

AldrenBormannKimcoRealtyCorp. JulianMarshburnHammersonplc

LisaRaffettoJonesLangLaSalle RobertRainwaterCBREGroup,Inc.

OPS.MANAGEMENTINDUSTRYREVIEW

CommercialRealEstatePropertyManagement
ExecutiveSummary
Completedforfinalpaper

Introduction
Completedforfinalpaper

Scope&Methodology
Thepurposeofthisreportistoanalyzefourareasofperformance(Operations Management/Safety&Governance,FinancialReporting,Sustainability,andFutureof CommercialRealEstateIndustry).Weselected4publiclytradedcommercialproperty managementcompaniestoassess.Theyarelistedinthechartbelow. Company CBREGroup,Inc. JonesLangLaSalle KimcoRealtyCorporation Hammersonplc GlobalHeadquarters LosAngeles,CA Chicago,IL NewHydePark,N.Y. London,England

Thedatathatwasused,forthisreport,wasobtainedfrommultiplesources,found ontheinternet,rangingfromCorporateResponsibilityReports,GlobalReportingInitiative (GRI)Reports,annualreports,corporatewebsites,NewsweeksGreenRating,DowJones SustainabilityIndex,BloombergNews,andtheWallStreetJournal.Variousothersources providedforinspiredcontent. Thefollowingprovidesasnapshotofeachcompany'sbackgroundandstandings: CBREGroup,Inc.(CBG),formerlyCBRichardsEllisGroup,markedits106th yearofcontinuousoperationsin2012.ThecompanywasfoundedinSanFranciscointhe aftermathofthe1906earthquake.Theyhavegrowntobethelargestglobalcommercial realestateservicesfirmintheworld.Today,theyhaveover37,000employees,in332 offices,in42countriesworldwide.
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CommercialRealEstatePropertyManagement
JonesLangLaSalle(JLL),incorporatedinApril1997,isaglobalfinancialand professionalservicescompanywith40,000employeesworldwide,1,000officelocationsin 70countries.JLListhethirdlargestcommercialrealestatecompetitorintheworldand specializesinrealestateservicesandinvestmentmanagement. KimcoRealtyCorporation(KIM),incorporatedinMay1994,isarealestate investmenttrust(REIT)headquarteredinNewHydePark,N.Y.,thatownsandoperates NorthAmericaslargestportfolioofneighborhoodandcommunityshoppingcenters.Asof December31,2012,thecompanyownedinterestsin896shoppingcenterscomprising 131millionsquarefeetofleasablespaceacross44U.S.states,PuertoRico,Canada, MexicoandSouthAmerica.Inmanyways,2012wasabanneryearforKimco.Focusedon boththepresentandthefuture,Kimcoclaimstohavedeliveredoutstandingfinancialand operatingresults,whilestrengtheningtheirbalancesheetandmakingsignificantstrides towardimprovingthequality,value,andgrowthpotentialoftheirshoppingcenterportfolio forthelongterm. Hammersonplc,establishedin1942,isapubliclyownedrealestateinvestment trust.Thefirmengagesininvesting,developing,andmanagingretailproperties.Itinvests inrealestatemarketofEuropewithafocusinUnitedKingdom,Germany,andFrance.The firmprimarilyinvestsinshoppingcenters,retailparks,andoffices.Itwasformerlyknownas TheHammersonPropertyInvestmentandDevelopmentCorporationplc,Hammerson PropertyandInvestmentTrust,andL.W.Hammerson&Co.Hammersonisbasedin London,theUnitedKingdom.Hammersonsvisionistobethebestownermanagerand developerofretailpropertywithinEurope.

OperationsManagement/Safety+Governance
Safety Commercialpropertieshaveseveralrequirementswhenitcomestosafety, licensing,inspection,leasingandotherareas.Theymustbepropermaintenance,zoned andinsuredinordertobeleasedorsold.Ultimately,itsthecommercialpropertyowners responsibilitytoensurethesedifferentrequirementsaresatisfied.Someproperty managementcompaniestakegreatprideintheirsafetyefforts.Belowarewaysour selectedcompaniesviewsafetyandhowtheysharethisinformationwiththeirstakeholders andpublic: Overthepastfiveyears,CBREhasmaintainedaninjuryfreeworkplacewithatotal
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ofover5.1millionworkhours.TheyvebeenrecognizedbytheRoyalSocietyofPrevention ofAccidentsfortheirlevelofperformanceexcellence,11timesin2012.Thisis3.7times betterthantheindustryaverage.In2012,CBREwascitedforsafetyissues,during3 differentinspections,butthedeficiencywerecorrectedtothesatisfactionoftheregulatory inspector. AtCBRE,acultureofexcellenceinHealthandSafetyhasflourishedwiththe additionofcontinualimprovement.Additionaltrainingwasprovidedto6,200employees thatutilizedtheironlinetrainingprogram.ItisCBREsongoingcommitmenttohealthand safetyaspartofitsintegrated,responsiblebusinesspractices,whichunderlieour yearoveryearsafetyimprovement,andexceedtheindustrystandardsbyasignificant margin.1 In2012,CBREcontinuedtoimproveontheirsafetyprocess,whichbuiltontheir5 yearplanforbetteringtheirhealthandsafetyplatform.Theyhavefosteredaglobal communityofhealthandsafetyprofessionalswithinthecompany,andcreatedaculture thathasintegratedhealthandsafetyintotheircorporateframework.Withtheincreaseof hoursworkedin2012,theywereabletoreducetherateofincidentsandinjury,buttheyfeel thereisroomforimprovement(continuousimprovement)bylearningfromtheirmistakes andcreatingstrategies,movingforward.Aspartoftheirthis,theyhaveinstitutedamonthly safetynetworkconferencecallwhereattendanceandparticipationhasincreased.This hasallowedthemtodistributeinformationtodepartmentsfaster. Additionalchallengeshaveappeared,withtheexposureCBREisfacing,duetoa significantportionoftheirmaintenancetechniciansutilizingservicevehicle.In2012,a comprehensivefleetsafetyprogramwasinitiatedtogivetheirdriversbettertraining.They haveaddedaCorporateFleetVehicleDrivingSafetyProgramtoassistFleetdriverswith theirdefensivedrivingskills.Thisisimportantduetothegrowingcomponentintheir everydaybusinessactivities. JLLsIntegratedFacilitiesManagement(IFM)teamreceivedtheInternationalSafety Awardin2009and2010,awardedbyTheBritishSafetyCouncil.Theteamreceivedthe awardover600globalorganizationsbasedontheircommitmenttoimprovingcorporate healthandsafety.JLLalsoreceivedtheGoldAwardfromtheRoyalSocietyforthe PreventionofAccidentsforhavingconductedbusinesswithaveryhighlevelof performance,demonstratingwelldevelopedoccupationalhealthandsafety managementsystemsandculture,outstandingcontrolofriskandverylowlevelsof
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CorporateResponsibilityReport2012<http://marketing.cbre.com/CorpComm/CR_Report/2012/2012_ Corporate_Responsibility_Report_FINAL.pdf>June2103.

CommercialRealEstatePropertyManagement
error,harmandloss.2 JLLextendstheircommitmenttosafetytocustomers,aswell.Theclients,the companypartnerswith,mustfollowthehealthandsafetyproceduresinplacebytheclient, aswellasbeincompliancewithJonesLangLaSallenationalandregionalhealthand safetypoliciesandprocedures.3 KimcoRealtyandHammersonhavenoinformationavailablethataddresseshow theydealwithsafetystandardsorconcernsaroundthem. Indoorairquality Therearemanyelementsthatcanaffectindoorairqualityincommercialbuildings. Thefollowingaresomeofthemoresevere: Radonacolorless,odorlessandtastelessgasthatisnaturallyfoundinsoil,rocks andwater.Ithasbeenknowntocauseseveredamagetothelungs,whichcan ultimatelycausecancer. Mold/Dampnessmanybuildinghavesomeformofmold,eithervisibleor invisibletotheeye.Thiscanbecausedbygeneraluseorpoormaintenanceofa building.Whenmoldtakeshold,itcancauseserioushealthproblems.Ultimately effectinganddevelopingsuchproblemsasallergies,upperandlowerrespiratory irritation,asthmaandbronchitis. Asbestosisanaturallyoccurringmineralthatwasregularlyutilizedinconstruction andmanufacturing.Ithasbeenlinkedtoriskofasbestosisandmesothelioma. Theseareformsofcancerthatattackthelungsandchestwalls,causingpermanent damage. Otherissuesthatcouldcausenegativeeffectsonindoorairqualitywouldinclude ozone,volatileorganiccompounds(VOCs)andpoorventilation.Aspropertymanagers, somehavebeenmoretransparentabouthowtheyaddresstheseissuesandhowtheyare remedyingtheseairqualityissues.
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IntegratedFacilitiesManagement http://www.joneslanglasalle.eu/EMEA/ENGB/Pages/Newsitem.aspx?ItemID=20106#.UbdwqpyKJc8June 2013. 3 GlobalHealthandSafetyPolicy http://www.joneslanglasalle.com/Documents/csr/Global%20Health%20and%20Safety%20Policy%20and%2 0Standards.pdfJune2013.

CommercialRealEstatePropertyManagement
CBRElaunchedtheRealGreenResearchChallenge,in2012,thatcommitted $1milliontodevelopingsustainablesolutionstoissuesincommercialspace,aswell,their commitmenttogreenbuildingandLEEDcertification.CBREhasbeenthehighestranked commercialrealestateservicescompanybyNewsweeksGreenRankingsforfour consecutiveyears. JLLisabigsupporterofgreenbuildingsandenergyefficiency.Theyrecommend strategiesandideasformanagersofofficestocreatesustainableworkplaceenvironments foroccupants.Somesuggestionsincludeindividualcontrolofindoorairqualitylevelsand ventilation,theplacementofprintersandcopiersawayfromworkstationstominimizetoner dustpollution,theusechemicalfreecleaningsupplies,theuseoflowemissionwalland floorcoveringsandtheuseofairqualitymonitoring. KimcoRealtydoesntdirectlyaddresssolutionsoutsidewhathasbeenlegally required. HammersonhasaNaturalVentilationprojectthatitsimplementingatitsshopping centers.Theplanincludesconvertingmechanicallyventilatedshoppingcenterstomore naturalventilationmethods.Theyarealsoworkingonmixedmodeventilationsystemsin somecenters.Allofthisisbeingdonealongwiththeircommittedtoreducingcarbon emissionsattheirproperties. Governance Corporategovernancebecameapressingissuefollowingthe2002introductionof theSarbanesOxleyActintheU.S.,whichwasusheredintorestorepublicconfidencein companiesandmarketsafteraccountingfraudbankruptedhighprofilecompaniessuch asEnronandWorldCom.4Asaresult,mostcompaniesstriveforahighlevelofcorporate governance.Today,beingprofitableisnotenoughcompaniesalsoneedtobegood citizensthroughenvironmentalawareness,ethicalbehaviorandsolidcorporate governancepractices. Requirementsofcorporategovernanceareviewdifferentlythroughout.Some companiesdisplayandaddressallareasofgovernancethroughtheirwebsiteand reportingdocuments.Belowareexamplesofcorporategovernancetransparency:
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CorporateGovernance.June2013<http://www.investopedia.com/terms/c/corporategovernance.asp>

CommercialRealEstatePropertyManagement
CBREhasstrivedforfulltransparencyinitspublicdisclosures.Thisisclearly displayedbytheirguidelinesforethicalbehaviorintheirStandardsofBusinessConduct, whichisprovidedtoallnewhiresandpostedontheirpublicwebsite.In2012,CBREs corporateresponsibilitypolicystatementwasdevelopedbytheirGlobalCorporate ResponsibilityGroupwhichlefttheultimateresponsibilityfortheprogramwiththeBoardof Directorsandtopexecutives.Inaddition,CBREhasarigorousGlobalAntiCorruption PolicyandaWhistleblowingPolicywhichprovidesforananonymousreportingsystemthat allowsanyoneinvolvedwiththebusinesstoreportpotentialwrongdoings. JLLcomplieswiththecorporategovernancelawsoftheworldsmostrigorous regulatoryauthorities,includingtheNewYorkStockExchange,theU.S.Securitiesand ExchangeCommissionandfinancialservicesauthoritiesintheUK,Japan,HongKong, SingaporeandAustralia,amongothercountries.JLLhasproventhatgoodcorporate governanceimprovesprofitabilitybydiminishingcoststhatresultfromlapsesin governanceThisisapparentbyviewingtheirCSRReport. TheBoardofDirectorsofKimcoRealtyCorporationhasadoptedaCorporate GovernanceGuidelinestoassisttheBoardintheexerciseofitsresponsibilitiesandto servebesttheinterestsoftheCompanyanditsstockholders.AsclaimedbyKimco,their CorporateGovernanceGuidelinesareinlinewithandshouldbeinterpretedinthecontext ofallapplicablelaws.CompleteinfoonKimcosCorporateGovernancecanbefoundon theCompanyswebsiteatKimcoRealtysCorporateGovernanceandtoanystockholder whootherwiserequestsacopy.5 HammersonpridesitselfonhavingaverydiverseBoardofDirectorsfromawide rangeofbusinessbackgrounds.Balanceofskillsanddepthofexperienceaddvalueto thecompany.TheperformanceoftheBoard,itscommitteesandindividualDirectorsare reviewedannually.ThecurrentChairman,JohnNelson,issettoretireinMayof2013and willbesucceededbyDavidTylerwhojoinedtheboardinJanuary2013.TheBoardis collectivelyresponsibleforthelongtermsuccessofHammersonandhasultimate responsibilityfordeterminingthenatureandextentofthesignificantrisksitswillingtotake inachievingitsstrategicobjectives,formaintainingsoundriskmanagementandinternal controlsystemsandforreviewingtheireffectiveness.

KimcosCorporateGovernancePolicyJune2013<http://investors.kimcorealty.com/Cache/1001174082. PDF?Y=&O=PDF&D=&FID=1001174082&T=&IID=102965>

CommercialRealEstatePropertyManagement

FinancialReporting
In2012,CBREjoinedtheSustainabilityAccountingStandardsBoardsAdvisory Council,whichdevelopscomprehensivestandardstoprovidehonestandethicalconduct andcomplianceforfinancialreportingandrecordkeeping. Revenuerose10%toarecord$6.5billion. NormalizedEBITDAincreased14%to$918million. Earningspershare,adjustedforselecteditems,improved18%to$1.22. Netincome,afteradjustingforselecteditems,rose19%to$399.4million. Financials:Howisthefinancialhealth? In2012,totalrevenueforJLLwas3.93billion,whichwasa10%increasefromprior year.57%oftherevenuewasearnedfrominternationaloperations.Leasingandproperty andfacilitiesmanagementbackedalmost60%oftheincome. JLLproduced$328millioninoperatingcashflowsand$233millionsinfreecashflowsin 2012.Thecompanyhas$476millioninliabilitiesand$152millionincashin2012.With EBITDAof$391millionfortheyear,JLLiseasilycoveringtheirdebts.Thecompanypays adividendof$0.40pershare.Earningspersharefor2012were$4.63,downfrom$7.64 in2007. In2012,Kimcoreportedfundsfromoperationscameinat$514.2million,or$1.26 perdilutedshare,up5percentfrom$489.8million,or$1.20perdilutedshare,in2011.As aresult,shareholderswererewardedwithatotalreturnofnearly24percent.Dividends,of course,makeupasignificantportionofKimcostotalreturn.InOctoberof2012,theBoard approveda10.5percentincreaseinourquarterlydividend,toanannualizedrateof$0.84 percommonshare. Hammersonownsover1.25millionsquaremetersofproperty,hadover$225 millioneurosingrossrentsin2012,operates2,225unitsworldwideandproducedover90 promotionaleventsaswell.

IndustryAverages&Ratios
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ValuationRatios

JLL

CBRE

Kimco Realty 75.3 1.88 9.46 1.86 1.86 44.8 34

Hammerso nplc 39.42 1.2 11.89 0.92 0.92 37.41 N.A.

Industry

P/ERatio(TTM) Beta PricetoSales(TTM) PricetoBook(MRQ) PricetoTangibleBook(MRQ) PricetoCashFlow(TTM) PricetoFreeCashFlow(TTM) Dividends DividendYield(%) PayoutRatio(TTM) Sales(MRQ)vsQtr1YrAgo(%) Sales(TTM)vsTTM1YrAgo(%) GrowthRates(%) Sales5YrGrowthRate(%) EPS(MRQ)vsQtr1YrAgo(%) EPS(TTM)vsTTM1YrAgo(%) CapitalSpending5YrGrowthRate (%) FinancialStrength QuickRatio(MRQ) CurrentRatio(MRQ) LTDebttoEquity(MRQ) TotalDebttoEquity(MRQ) InterestCoverage(TTM)

19.5 1.95 0.99 2.06 93.96 11.7 145.8

23.3 2.6 1.14 4.82 7.09 14.3 30.3

55.5 1.57 7.77 2.95 3.03 44.6 37.5

0.5 9 5.2 9.7

0 0 9.3 10.3

3.8 269 3.7 1.9

3.09 140.65 3.68 2.71

3.8 199 10.3 2.5

8.85 6.4 6.4 2.81

4.04 106.6 106.6 4.19

3.32 19.2 19.2 N.A.

0.91 36.33 69.36 0.9

4.33 42.9 42.9 13.79

1 1.1 0.39 0.41 8.8

1.1 1.3 1.35 2 3.8

0.07 4.846 0.7 0.7 2.1

N.A 0.75 49.92 54.02 N.A.

N.A. N.A. 1.34 1.35 1.7

CommercialRealEstatePropertyManagement
ProfitabilityRatios(%) GrossMargin(TTM) GrossMargin5YrAvg EBITDMargin(TTM) EBITD5YrAvg PreTaxMargin(TTM) PreTaxMargin5YrAvg ManagementEffectiveness(%) NetProfitMargin(TTM) NetProfitMargin5YrAvg ReturnonAssets(TTM) ReturnonAssets5YrAvg ReturnonInvestment(TTM) ReturnonInvestment5YrAvg Efficiency Revenue/Employee(TTM) 82,823.0 0 4,332.00 3.9 1 179,437.0 0 9,100.00 3.6 1 1,486,573.0 0 459,266.00 N.A. 0.1 734,815 N.A. 5.2 3.9 4.9 3.4 7.8 6.5 5.1 1.1 4.9 1 9.1 1.9 30.9 19.6 2.9 1.8 3.6 2 31.42 56.03 1.47 2.88 1.6 3.1 0.15 8.9 2.4 1.1 3.2 1.3 N.A. N.A. 10.4 27.9 5.7 3.6 42.9 42.5 12.3 11.74 7.4 0.6 N.A. N.A. 32.5 N.A. 25.1 17.4 89.96 76.85 73.05 74.42 31.42 64.56 N.A. N.A. 34.1 0 14.5 7.5

NetIncome/Employee(TTM) ReceivableTurnover(TTM) AssetTurnover(TTM)

229,876 6.21 0.05

N.A. N.A. 0.3

RatioAnalysis TheP/ERatioaverageforthecommercialrealestateindustry,accordingto Businessweek,is55.5.Outofthefourcompaniesanalyzed,onlyKimcoRealtysurpassed theindustryaverageat75.3followedbyHammersonat39.42,andCBREat23.3,and JLLat19.5.ThisratioshowsusthatKimcohasthehighestpricedstock(evenabove average)inrelationtocurrentearnings.


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Thefinancialstrengthofacompanycanbecalculatedusingthequickratio,which showsacompanysabilitytopaydebtwithouthavingtorelyoninventory.Anythingabove1 isconsideredacceptable.HereweseethatKimcofallsshortat0.7.Thiscouldbe becauseofKimcosrecentacquisitions,whichtookplaceduringQ12013. Abroadmeasureofprofitabilityisthegrossmargin%andwhileanindustry averageisntavailableforthepurposeofcomparison,hereweseethatHammersonhas thehighestgrossmargin(89.96).Incontrast,CBREsitsat42.9 Tobeadded: Payoutratio:anindexshowingwhetheracompanypaysoutmostofitsearningsin dividendsorreinvesttheearninginternally.(incomplete) DividendPayoutRatio:showsthereturnintermsofcashordividendsprovidedbyastock. (incomplete) MarketCap&Share Marketcapitalizationisimportantinformationforinvestorsforvariousreasons.It givesatruecomparisonofthevalueattributedbythestockmarkettoagivencompanys stock.Marketcapitalizationisimportantbecauseitplacesacompanyintermsofitssize tierinrelationtopeers.ThiscanhaveadirectimpactonwhichmutualfundsandETFs (mutualfundsthataretradedonastockexchange)arewillingtoownthestock.
MarketCap CBREGroup JonesLangLaSalle KimcoRealtyCorporation Hammersonplc
Source:ycharts.com

Asof: 06/14/13 06/14/13 06/14/13 06/14/13

US7.508B US3.899B US8.997B EU3.530B

CBREisthelargestCommercialRealEstatepropertymanagementfirminthe world(insales)since2012.
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CommercialRealEstatePropertyManagement
BelowisachartfromJLLs2010CSRReportexpressingtheirfinancialsforthe threeyearperiod,2008through2010.(CSR)

GrowthCatalysts JLLisgrowingdespiteandininspiteofthepastfinancialissues.Someofthecatalysts workinginJLL'sfavorincludecustomerswantingtoworkwithglobalcompaniesthe recoveringmarketsfrom2008marketstrendingtowardestablishedplayersinthemarket andincreasedcrossbordercapitalflows.JLLhasaglobalfootprintandisa longestablishedcompany,poisedtobenefitfromthesetrends. (http://seekingalpha.com/article/1381341alongterminvestorscaseforjoneslanglasall) GlobalReportingInitiative(GRI) CBREhasincludedaStandardsDisclosureIndexaspartoftheirCorporateResponsibility Reportforthelast3years.For2012and2011,theyreceivedaBratingthatwasreviewed byaDeputyoftheGlobalReportingInitiative. JLLhasnotfiledaGRIreporttodate,howevertheydidpublishaCSRReportfor2011 whichisverycomprehensiveanddescribesthecompanyseffortstobeenvironmentally, socially,andfiscallyresponsibleandsustainable.Infact,JLLwasdeemedtheWorlds MostEthicalCOmpaniessixyearsinarowforitscorporatesocialresponsibility,quality ofservicesandglobaleffectiveness (wwhttp://www.joneslanglasalle.co.in/India/engb/Pages/Home.aspx).

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CommercialRealEstatePropertyManagement
KimcohasnotyetfilledaGRIreport.But,asKimcocontinuestobuilditsCorporate Responsibilityprogram,itisdevelopingannualreportingonprogramprogress.By2014, KimcoexpectstoreleaseitsfirstcomprehensiveCorporateResponsibilityreport leveragingtheGlobalReportingInitiativereportingstandardsandtheyplanonproviding additionalinsightsintothecompanysprogramviasocialmediameansandcompany blogs. Meanwhile,insteadofreportingthroughGRI,KimcobeganreportingviatheCarbon DisclosureProjectandGlobalRealEstateSustainabilityBenchmarkstartingin2011.The companywillcontinuetoprovidestakeholderswithaccesstoinformationviatheseforums, andcopiesofeachreportareavailablebelow. Report:KimcosGlobalRealEstateSustainabilitybenchmarkREPORTS(2011&2012) HammersonhasfiledaCorporateResponsibilityReport/GRIin2003,2004,2009, 2010,2011and2012.Tosolidifytheircommitmenttosustainability,in2010,they committedto12keylongtermmeasureswhicharealignedwithourbusinessstrategy. HammersonsLongtermSustainabilityCommitment (basedonGRImeasures)
Environment 10.6%ReductioninCarbonEmissions 6.6%ReductioninWater Consumptionin2012 66%ofwasterecycled 24Biodiversityactionplanscompleted InnovationandResearch Investors 6Researchpaperscompleted 10ofourtop20investorsengaged 1Lifecycleassessmentbegun: Cyfarthfa,Myerthyr,Tydlfil Customers Employees: Suppliers: 24ofourtop75customersengaged 71%ofemployeescompletedCR Training 100%ofsuppliersengagedwithover Target:20%by2015 Target:12%by2015 Target:75%by2015 Target:38by2015 Target:6by2012 Target:20by2015 Target:2by2012 Target:75by2013 Target:100%annually Target:45%by2015

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$100EuroValue Communities 63%ofourcommunityinvestmentis longterm 1CommunityPlan:Silverburn, Glasgow Target:75%by2014 Target:alldevelopmentsand managedassetsby2015

Sustainability
Allfourcompanieshavemadesubstantialeffortsandprogresstowardimproving sustainabilityintheirownbusinessesandintheirclientsbusinesses. WithCBREsdesiretobecomemoresustainable,theyfocusedon Respect/Integrity/Service/Excellence.In2010,theybecamethefirstcompanyintheir industrytoachievecarbonneutralityinitsoperations.CBREhostedtheirfirstinternal GlobalSustainabilitySummit,in2012.ItwasagatheringofCBREsustainability professionalsfromaroundtheglobetodeveloppolicystrategiesandstakeholder activities.NewsweekRankedtheCBREGroup,Inc.astheGreenestRealEstateFirmfor 2011at128(overall)andin2012theywererankedaveryclosesecondat96. InJuly2012,CBREreleasetheirEnvironmentalSustainabilityPolicy,which demonstratestheircommitmenttotheenvironment.Thepolicyfocuseson11keyareas, suchasenvironmentalcommitmentandpracticesthatsupportthetransitionourclients needtotakewiththeirownrealestate,andprovidetrainingandeducationtotheirown professionals. JonesLangLaSallehasover1,250LEEDAccreditedProfessionalsthatare focusedonover20,000sustainabilityprojectsonanannualbasis.AnEnergyand SustainabilityTeamassistsclientswithcreatingecofriendlyworkplacestoalternative energysources.Theseeffortshaveproventoreducenotonlyourclientsenvironmental footprint,butalsotheiroperatingcosts (http://www.us.am.joneslanglasalle.com/UnitedStates/ENUS/Pages/energyandsustainabili ty.aspx). InJanuaryof2013,Kimcolaunchedasustainabilitywebsiteinaneffortto incorporatemoresustainabilityintotheirbusinessmodel.Thesitefocusesaroundfourkey
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fundamentalprinciples: 1.REthinkBusiness:detailsKimco'seffortstocreatenewsourcesofvalue,andaddress issuesofconcerntotheindustry 2.REnewCommunity:describesKimco'scommunitybuildingandemployeevolunteer efforts 3.REstoreEnvironment:outlinesKimco'senvironmentalsustainabilityinitiatives 4.REsources:providesformalreporting,alliancesandpartnerships,andpolicies TheconceptofsustainabilityisfairlynewforKimcoRealty.However,inthepastfew years,Kimcoinvestedinmultiplecorporateresponsibilityinitiativesincludingimplementing autilitymanagementprogramtomonitorresourceuseandreduceexpensesatindividual centersaddinglandlordinstalledsolarpanelsatshoppingcenterstoreducetenantenergy costsdevelopingalightingcontrolsystemthatreducesparkinglotelectricconsumptionby 25percentandpartneringwiththeInternationalCouncilofShoppingCenterstodevelopa firstofitskindPropertyEfficiencyScorecard. "Wedevelopedthesitetocreateadedicatedforumforstakeholderstolearnabout ourcorporateresponsibilityprogramandthesuccessesthatwe'vehadtodate,"saidWill Teichman,DirectorofSustainabilityatKimcoRealty."Inthepastfewmonths,many stakeholdershaveinquiredaboutwhatKimcowasdoinginthecorporateresponsibility arena.Mostwerehappilysurprisedtolearnthatweweredoingsomuch,butaskedwhywe weren'tsharingourstoryinamorepublicway.Thisnewsitegivesusanidealplatformto shareoursustainabilitysuccesseswhileestablishingtheforwardmomentum,purpose,and accountabilityneededtoachieveourfuturevision." WallStreetJournalarticle:KimcoRealtyLaunchesCorporateResponsibilityWebsite HammersonusesBREEAMasastandardforsustainabilityefforts.BREEAM (BuildingResearchEstablishmentEnvironmentalAssessmentMethod)asastandardwas establishedin1990intheUK.LEEDwasestablishedin1998intheUS.40%of HammersonsportfolioincorporatesanenvironmentalappendixintotheirGreenLeases. TheirGreenLeasesnowincludemandatoryBREEAMclausesforallnewdevelopmentsto secureBREEAMExcellent. Energyusage/type TheenvironmentalimpactofcommercialbuildingsiswidelyrecognizedCBRE
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consumedsubstantialamountsofwaterandenergyandproducesignificantwasteand greenhousegasemissions.Aspartoftheirpolicycommitmenttoimprovingtheir buildings,CBREhasrequiredthatallexistingofficesundergoaretrofittoinstallasub meterthatmeasureselectricityusage.Thiswillproviderealtimeenergyusedatathat supportstheircorporatecarbonfootprintmeasurementandhelpsthemmeetLEED certification.Tocounteracttheseneeds,CBREestablishedtheRealGreenResearch Challenge,in2012.Thechallengeencouragessubmissionsofideas/practicesthat reducetheseenvironmentalimpacts. WhilesustainabilityisanewconceptforKimcoexecutivemanagementandjust withinthelastfewyearswaswhentheyhiredtheirfirstsustainabilitymanager,theyhave alreadymadesomeprogress.Kimcohasrecentlyinstalledsolarpanelsintheir BridgewaterPromenadeandEdgewaterCommonsshoppingcentersinMarylandand havepowereduptheirnewrooftopsolarinstallations,whichwillsupplyanestimated1.3 millionkilowatthoursofclean,zeroemissionpowerannuallytothecenterstenants. Additionally,in2010,Kimcopioneeredanewmodelofsolardevelopmentamong retailpropertyownersfinancinganddevelopingthreemegawattsofrooftopsolar productioncapacityonsixshoppingcentersinNewJersey.Eachsolarprojectinvolveda partnershipbetweenKimcoandoneormoreretailerswithKimcoowningandoperating thesolarpowersystemandtheretaileragreeingtopurchasediscountedpowerfora multiyearperiod. KimcohasalsosetupaTenantEnergyServicesprogram,whichallowsthemto workinpartnershipwithtenantstoreduceoperatingcostsfromenergyandwater consumptionanditsenvironmentalimpacts. LEEDCertification CBREhasprovidedtheirLEEDEBcertificationserviceto171buildingstotaling morethan70millionsquarefeetglobally,eliminatingnearly49,000metrictonsof greenhousegasemissions. CBREsLEEDCertification Buildings171 SquareFeet70,438,000 AnnualkBtuSavings281,401,000
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AnnualCO2EmissionReductions48,519AnnualWaterSavings 87,845,000gallons CBREclients59 CBRESAClients26 BuildingsCertifiedLevel14 BuildingsSilverLevel55 BuildingsGoldLevel102 PercentageofCreditAchievement98.7% BuildingswithPerfectScores97 StateswithCertifications22 CurrentNumberofCertificationsUnderway147 CBREprofessionalshavetakenanactiveroleandbecomeinvolvedinGreen BuildingCouncilPanels,theGreaterChinaInternationalLEEDsRoundtable,helpedcreate thefirstsetofregionalizedprioritycreditsforLEEDscertificationfornewconstruction,and hadarepresentativeontheSpanishGreenBuildingCouncilroundtable. JLLhasalsofocusedonhelpingownersandoperatorstoobtainLEED certifications.ComprehensiveLEEDgapassessmentsareused,alongwithaLEED scorecardtohelpJLLdeterminethestepsneededforthecompanytobecomecertified, Silver,GoldorPlatinum.OneofthepasthighprofileLEEDcertificationprojectsforJLLis theBankofAmericaToweratOneBryantParkinNewYork,thefirstofficetowerto achieveLEEDPlatinumcertification ThefollowingtableshowsthenumberandgeographicdistributionofJLLsgreen buildingandretrofitactivitiesin2010:

(CSR)
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Hammersonintroducedasustainabletimberroofsolutioninsomeofitsnewretail developmentsin2012.Theyhavebeganstudyingandimplementingthereuseofsteel fromoldretaildevelopmentsinnewones.TheirRetailLabcreatesasolutiontoprovide retailerswithafast,lowcost,lowenvironmentalimpacttemporaryunit. Social ImpactonLocalandBroaderCommunities DuringCBREsannualemployeefundraisingcampaign75%offundsarematched by50%(uptothebudgetedamount)andsentbacktothelocalofficesforallocationtothe causeoftheirchoice.Theother25%isgiventocausesrelatedtoshelterandpoverty housing,environmentalsustainabilityandcommunityservice.In2012,CBREandits employeesdonated$6.7millionto583organizations. JLLhasastrongcultureforcommunityinvestmentandhasimpactedcommunities worldwide.TheJLLCharitiesentityistaxexempt,whichallowsittocollecttaxdeductible donationsfromemployeesandcontributethemtocharitabledonations.JLLandCBRE workedtogethertoraiseover$20,000tosupportNorwoodHighSchoolhockeyplayer MattBrownwhosufferedasevereinjury.JLLalsoparticipatedinaStepUpforKids programwhichraisednearly$450,000fortheChildrensMemorialHospital.(CSR). Kimcohascreatedseveralprogramswithanefforttogivebacktothecommunity.A distinguishedprogram,KimcoBusinessBootCamps,a3dayprogramthatactsasa microbusinessincubatorwheretheygivetrainingforbuddingentrepreneurswithastrong desireyetlimitedresourcestostartandrunasuccessfulretailbusiness. AttheBootCamps,studentslearnaboutallfacetsofretailing,frombusiness planning,financing,andmarketresearchtositeselection,permitting,hiring,and marketing.Inadditiontohelpingthestudentsdevelopbusinessplansandmakefinancial projections,advisorsworkwiththemandKimcotohelpfindtherightspacesfortheirretail businesses. Kimcoscommitmenttohelpingthesebusinessesgetofftoastrongstart,the companyoffersqualifiedentrepreneursandfirsttimebusinessownersoneyearoffree rentandotheroperationalandfinancialbenefits. Source:
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CommercialRealEstatePropertyManagement
http://www.kimcorealty.com/corporateresponsibility/smallbusinesssuccessstories.aspx Kimcohasadditionalprogramsinplacetogivebacktoabroadercommunity. Amongthemare: HurricaneSandyRelief BreastCancerWalkandBikeRide ChilliCookoffFundraiser Hammersonmakesgreatinvestmentsinlocalcommunities,ofwhich,63%isforthe longterm.Theseinvestmentscomeintheformofcashdonations,volunteeringandthe useoftheirretaildestinations.In2012,theymadeatotalof1.04MillionEurosintotal communityinvestment.Theyalsosupportentrepreneurshipandsmallbusinessthrough investmentoffundsandexpertiseoftheirretailmanagersinthestartupproposals.They havehelpedtocreate949newcompaniestogeneratejobs,boostlocaleconomiesand keepinvestmentintheregions.Theirimpactonbroadercommunitiescanbeevidencedin theirspecifictimingthestartofprojectsandthenumberofjobsbeingcreatedandthe impactthisgrowthwillhaveonthecommunityandtheregion. Employees CBREunderstandstheimportanceofaninclusiveanddiverseworkforce,andusing itasanopportunitytodefinetheircorporateidentity.Theyhavealongstanding commitmenttoempoweringwomen,LGBTcommunity,AfricanAmericanandHispanic Networks,andrecentlydevelopedanewVeteransEngagementTeam,whichconnects newemployeeswithmilitarybackgroundstootherswithsimilarexperience.Asaresult, CBREhasbeenrecognizedfortheireffortsbyreceivingtheCareHonorRollforthelast sixthconsecutiveyears.Inaddition,theyreceivedan85ratingbytheHumanRights CampaignCorporateEqualityIndexfor2102,theonlycommercialrealestatefirmtodo so. Over98%ofCBREs37,000employeescompletedtheirannualethicscertification, forthelast4years.Thisdemonstratesthecommitmenttointegritythatcreatesthe standardsofconductthatrunsthroughthecompanyculture.Thecultureofintegrity guaranteedthatCBREcontinuedtoinvestinpeople,processesandtraining,thusallowing forcompliancewithlawsandregulationsineachcountrywheretheyhaveoperations.

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CommercialRealEstatePropertyManagement
JLLemploys1,075accreditedstaffmembers,2.5percentofthecompany's42,000 employees,arepresentin29countries.Mostemployeesearnedtheircredentialsthrough theUSGBC'sLEEDAPandLEEDGreenAssociateprograms.JLLemployeeshavealso obtainedBREEAMaccreditationmembershipasanAssociateoftheInstituteof EnvironmentalManagementandAssessmentcertificationasaBuildingCommissioning Professional(CBCP),anEnergyManager(CEM),oraDataCenterEnergyPractitioner (DCEP)andaccreditationthroughprogramsoperatedbyGreenGlobesGoGreenPlus, GreenMarkandtheNationalAustralianBuiltEnvironmentRatingSystem. JLLbelievesitsprofessionalsareresponsibleforthe200buildingsandcommercial interiorsthathaveachievedgreenbuildingcertification,andforinstallingandmanaging 1,400MWofwindandbiomassenergyprojects.JLLssustainabilityprosalsohelped clientssave$128millioninenergycostsandsave563,000metrictonsofgreenhousegas emissions(GHG)in2010. (http://www.greenbiz.com/blog/2012/01/05/jllsstaffcertifiedsustainabilityprosgrowsnearl y1100). AsstatedbyKimcossustainabilitymanager,Kimcoemployeesarethedriving forcebehindthecompany'sphilanthropicefforts.Employeesaremotivatedbyastrong desiretohelpothersandgivesomethingbacktothecommunity.Theytaketheinitiative andactivelysupportmanygrassrootsprogramsthatareclosetotheirhomes,andcloseto theirhearts.Theiroutreacheffortsincludeeverythingfromhelpingneighborsrecoverfrom severestorms,tosupportingmedicalresearchandhealthrelatedcauses,toraisingfunds andactivelyvolunteeringforprogramsthatmakelifebetterforthoseinneed. Kimcosemployeescompanysponsoredhealthbenefitsalsoenjoybenefitthrough aspecialemployeehealthandwellnessprogramwithWeightWatchers.The12week program,whichstartedin2012,broughtmeetingsandweighinsintotheircorporate offices.AsexplainedbyKimcosmanagement,theyhadaWeightWatcherscounselor comeinduringlunchbreakstomeetwithemployeesinterestedinlosingweight,provide guidance,support,andadvice.TwentynineKimcoemployeeslostatotalof305poundsin 2012. In2012,Hammersonhad71%oftheiremployeescompleteCRTraining.Their goalistohave100%by2015.Theyhad3,005hoursofemployeevolunteeringin2012as well.Theyhaveintroducedaleadershipprogramandnewcorporateintroduction programmetopromotecooperationbetweenteams,departmentsandshoppingcentres. Theyencourageemployeesengagementonsustainabilityandsocialresponsibility
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CommercialRealEstatePropertyManagement
through environmentaltraining CommunityDays Personaldevelopmentreviews Andtheyhaveimplementedanemployeesurveyacrossalllevelstogatherfeedbackand helpimproveprocessesandthecompanyingeneral.

FutureofCommercialRealEstateIndustry
Potentialobstacles TheU.S.commercialrealestate(CRE)recovery,althoughslow,hasbeenvisiblein improvedfundamentals,capitalavailability,assetpricingandtransactions....However,the CRErecoveryappearstobeunsteady,withincreasedcautiongiventhenationsstalled economicrecovery,whichisdue,inpart,tosovereigndebtproblemsandeconomic stagnationinEuropeaswellasslowinggrowthinemergingmarketssuchasChinaand India. Demand,whichisdrivenbythevolumeofcommercialrealestatetransactions,is heavilyinfluencedbyrealestatevacancyrates.Averageannualrevenueperworkeris about$250,000forbrokersandagents,butabout$120,000forpropertymanagers, reflectingthemorelaborintensivenatureofpropertymanagement. Thetop10issuesforcommercialrealestateare:

Macroeconomicfundamentals CREfundamentals CRElending Realestateinvestmenttrusts(REITs)andprivateequityrealestate(PERE) CREdealflow Singlefamilyhomes GlobalizationofCRE Sustainability Technology

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CommercialRealEstatePropertyManagement

Analytics

Local,nationalandinternationaleconomy CommercialRealEstateCompaniesarevulnerableduringperiodsofeconomic weakness,risinginterestrates,fiscaluncertainty,declineinemploymentlevels,lower demandforcommercialrealestate,fallingrealestatevalues,changeinthecapitalor creditmarkets,orthepublicperceptionofadecliningmarketcouldnegativelyaffecttheir performance.Theirbusinessislargelyimpactedbyeconomicconditionsinthemajor markets.Thiscanultimatelyaffectacquisitionsofrealestateandleasingactivity.In addition,thedeclineincommercialrealestatevaluesandrents.This,inturn,reduces revenuesfrompropertymanagementfeesandcommissions.Also,politicaloreconomic disruptioncouldimpactinterestratesorliquidity. Constantlychanging(local)demographics ChangesinlocaldemographicscanhaveimpactsfortheCommercialRealEstate Industry.Thingslikeincreasingagesofagingbabyboomersinanareacanaffectthe demandfordifferenttypesofhomesandalsoincreasedemandforcommercialrealestate aswell.CREswillneedtoconsiderthislocaldemographicdatawithmakinginvestments innewpropertiesandalsowhendecidingwhattypeofpropertiestobuildormanageinan area. Technologyinfluence(internetshopping,virtualtoursetc) CommercialRealEstateCompaniescanutilizeinformationtechnologiestodrive improvementsacrosstheenterprise.UseofthingssuchasCloudcomputingtoincrease operationalefficiencyandSocialMediatohelpgatherdataaboutconsumerbehaviorsto increasecompetitiveadvantage.CREsshouldaggressivelyadopttechnologiesto increasegrowthandremaincompetitive. LookingtotheFuture By2017,CBREwillhavethecapabilitytomonitorandmeasureutilityusageintheir 50largestcarbonemittinglocationsbyinstallingseparatemeteringdevices.Inaddition, theywillstrivetolocateatleast70%oftheircorporatefacilitiesover20,000squarefeetin spaceorbuildingsthatarerecognizedforgreenbuildingstandards.Moreimportantly,they
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CommercialRealEstatePropertyManagement
arepledgingtocontinuetheRealGreenResearchChallengewheretheyseektodiscover newandinnovativeprograms,practicesandtoolstoadvanceinnovationandpromotion energyefficiencyandsustainablepractices. Overthenextseveralyears,Kimcowillcontinuetoleverageitsexperiencein renewableenergyandenergyefficiencytoprovidenewenergysolutionstoitsretail tenants.Webelievethatloweringenergycosts,andassociatedenvironmentalimpacts, canbeofmutualbenefittolandlords,tenantsandcommunities,saidWillTeichman, DirectorofSustainabilityatKimcoRealty. HeresaperspectiveonthefutureoftheRealEstateIndustrybyAndrewWeber, whoisanAnalystforFranchiseHelp.comandisagraduateofNewYorkUniversityand NewYorkUniversitySchoolofLaw. Thewholearticlealsocoverswheretheindustryhasbeenandwhereitsheading.. accordingtoMr.Weber,ofcourse. Heresthearticle:RealEstateIndustryAnalysis2013Cost&Trends RealEstateIndustryFuture Potentialobstaclesfortheindustryincludefactorsbeyondthecontrolofthe businessowner,suchasdownturnsinthelocalornationaleconomy,aswellaschanging neighborhooddemographicswhereagenciesarelocated.Alsooutoftheownerscontrol isthebuildingofproperties,andwhatpropertiesintheareaareavailable.For managementcompanies,indoorairqualityliabilityhasbecomeaseriouslegalissuein recentyears.Removalofmoldgrowthinparticularhasbeenincreasinglynecessaryfor propertyownersandmanagers. Theuseoftechnologywillcontinuetotransformthefieldintheyearsahead, enablinghomebuyerstoresearchbothpropertiesandtheareasinwhichtheyarelocated, includinglookingatpicturesandfindingoutabouttheneighborhoodsschools,crimerates andotherstatistics.Marketingovertheinternetwithpicturesofpropertiesandvirtualtours willbeimportantforbrokers.Morethanninetypercentofpeopleusetheinternetbefore purchasingrealestate.UnitedStatespopulationgrowthwillalsobeanimportantdriving factorinthegrowthoftheindustryatlarge.Theworkforceisexpectedtogrowfourteen percentbetween2008and2018.Theinternetarguablymayeliminatetheneedforbrokers
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CommercialRealEstatePropertyManagement
altogetherinthefuture.Banksalsorepresentapotentialcompetitor.Recentlytheyhave beenfreedbyrulechangestoenterthecommercialrealestatefieldinalimitedway,andit ispossibletoseefuturerulechangesallowingthemtoentertheresidentialfield.The biggestgrowthareasareexpectedtobeinthesouthernhalfofthecountry,particularlyin thesouthwest.ArecentsurveyrevealedthehottestbuyersmarkettobeAlbuquerque,New Mexico. Eveninspiteofthepooreconomicconditionsandthestateoftheindustry,analysts areconfidentinthefuturegrowthintheindustry.Brokerscommissionsareexpectedto growatacompoundedrateoffourteenpercentannuallyfrom2010to2015.Theoutputof UnitedStatesrealestatebusinessesisexpectedtogrowatanannuallycompoundedrate ofsixpercentbetween2010and2015.

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WorksCited http://www.cbre.com/EN/Pages/Home.aspx http://marketing.cbre.com/CorpComm/CR_Report/2012/2012_Corporate_Responsibility_ Report_FINAL.pdf http://annualreport.cbre.com/CBRE_AR12.pdf#page=11&zoom=125,0,279 http://www.thedailybeast.com/newsweek/2012/10/22/newsweekgreenrankings2012us 500list.html http://www.investopedia.com/terms/c/corporategovernance.asp "KimcoBusinessBootCamps."KimcoRealty.N.p.,n.d.Web.14June2013. <http://www.kimcorealty.com/corporateresponsibility/kimcobusinessbootcamps.aspx>. "KimcoRealtyCorporationCorporateGovernanceGuidelines."KimcoRealty.N.p.,n.d. Web.14June2013.<http://investors.kimcorealty.com/Cache/1001174082.PDF?Y =&O=PDF&D=&FID=1001174082&T=&IID=102965>. "KimcoRealtyLaunchesCorporateResponsibilitySite."TheWallStreetJournal.The WalltreetJournal,31Jan.2013.Web.14June2013.<http://online.wsj.coarticle/ PRCO20130131910027.html?mod=crnews#http://online.wsj.com/article/PRCO 20130131910027.html?mod=crnews>. "Reporting."KimcoRealty.N.p.,n.d.Web.14June2013. <http://www.kimcorealty.com/corporateresponsibility/responsibilityreportcards.aspx> Teichman,Will."BuildingControls."KimcoRealty.N.p.,n.d.Web.14June2013. <http://www.kimcorealty.com/corporateresponsibility/buildingcontrols.aspx>. Teichman,Will."KimcoRealtyBlog3CorporateResponsibilityTrendstoWatchin 2013Comments."KimcoRealty.N.p.,19Feb.2013.Web.14June2013. <http://blog.kimcorealty.com/2013/02/3corporateresponsibilitytrendstowatchin2013/>. "WasteManagement."KimcoRealty.N.p.,n.d.Web.14June2013.
<http://www.kimcorealty.com/corporateresponsibility/integratedwastemanagement.aspx>. 25

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RealEstateIndustryAnalysis2013Cost&Trends GreenBuildingFeaturesSupportWorkerWellbeingandProductivity.JonesLang LaSalle,JonesLangLaSalle,2013.AccessedJune9,2013. DuoofHealthandSafetyAwardsforJonesLangLaSalle.JonesLangLaSalle,Jones LangLaSalle,2013.AccessedJune11,2013. GlobalHealthandSafetyPolicyandManagementStandards.JonesLangLaSalle,Jones LangLaSalle,2008.AccessedJune11,2013. Wherewestand,Buildingbeyondtomorrow.2010CSRReport.JonesLangLaSalle, JonesLangLaSalle,2010. Guevara, Leslie. JLL's Staff of Certified Sustainability Pros Grows to Nearly 1,100. GreenBiz.com. January 5, 2012. GreenBizGroup, 2013. Web. June 15, 2013.
http://seekingalpha.com/article/1381341alongterminvestorscaseforjoneslanglasalle

http://www.joneslanglasalle.eu/EMEA/ENGB/Pages/Newsitem.aspx?ItemID=20106#.Ubd wqpyKJc8 Indoorairquality,http://www.ap.joneslanglasalle.com "Hammerson."Home.N.p.,n.d.Web.15June2013. Hammerson.CorporateResponsibilityReport:PositivePlaces.London:Hammerson, 2012 "CommercialRealEstateOutlook:TopTenIssuesin2013."Deloitte.N.p.,n.d.Web.15 June2013. "4KeyFactorsThatDriveTheRealEstateMarket."4KeyFactorsThatDriveTheReal EstateMarket.N.p.,n.d.Web.15June2013.

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