the leader - september october 2011.pdf

september / october 11volume 10, issue 5

corporatereal estate

& workplace

Shifting to a Knowledge-Based Economy (page 12)

workplace strategies

in asia(page 20)

barclays’ sustainability enterprise (page 26)

verizon’stanya penny(page 54)

Corporate WorkspaCe solutions

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The Official PublicaTiOn Of cOreneT GlObal

LeadershipThe leader is PrinTed

On recycled PaPer

cOreneT GlObal bOard Of direcTOrsYour leadership makes the difference.

Matthew J. Fanoe, ChairVice President, Real EstateCoca-Cola Refreshments, Inc.

Jim Scannell, Chair-ElectSenior Vice President, Administrative Services The Travelers Companies

Dino S. Piccini, BCCR, TreasurerPresident, Global Corporate ServicesDTZ

Lee R. Utke, MCR, Immediate Past ChairDirector, Global Corporate Real EstateWhirlpool Corporation

Erica Chapman, Esq.Vice President, Real Estate & FacilitiesinVentiv Health

Maureen Ehrenberg Global Director of Facilities Management, Global Corporate ServicesCB Richard Ellis

John Forrest CEO, Corporate Solutions Asia PacificJones Lang LaSalle

Philip Grossberg, LEED APManaging Director, Global Corporate Services CB Richard Ellis

Lydia Jacobs-Horton Director, Global Facilities & Real Estate Procter & Gamble

Mark Nicholls ConsultantCharlotte, NC

Stephanie PaterSenior Managing DirectorCatalyst Group Partners

Tanya PennyVice President, Real EstateVerizon Services Operations

Steven QuickVice President & General Manager EMEAJohnson Controls

Mark SchleyerVice President, CRE Asset Management & TransactionsAT&T Services

Randy Smith, MCRVice President, Real Estate & FacilitiesOracle

Tony Shou Fat Wong, MCRDirector, Workplace Resources, APJCorporate Real EstateCisco Systems

2011 The leader 4 s e P T e m b e r / O c T O b e r

assOciaTe direcTOrsJessica BeersSenior Director, UGL Services

T. Patrick DonnellyPrincipal, BHDP Architecture

Gina RizzoGlobal Client Relations, Herman Miller

Robin RonneManaging Director, CEO CouncilGreater Fort Lauderdale Alliance

leGal cOunsel TO cOreneT GlObalDavid GochWebster, Chamberlain & Bean

ediTOrial adVisOry cOmmiTTeeGeorge Bouri, MCR, SLCRConsultant, New York

Del BoyettePrincipal, Boyette Strategic Advisors

Ian CameronManaging Partner, Intresinc

Barbara Donaldson, CFM, MCRVice President, Global Real Estate & FacilitiesSynopsys

Larry EbertExecutive Vice President, Project ManagementGrubb & Ellis

Scott Foster, MCRSenior Vice President, Corporate WorkplaceBank of America

Roger G. GaudetteDirector, Asset Management, Ford Land

Thomas GlatteCorporate Real Estate Management, BASF Group

David KontraManager, Real Estate Operations, General Electric

Rick KrivaVice President, Global Real EstateHoneywell

Richard M. McBlaineChief Executive, Strategic ConsultingJones Lang LaSalle

Keith PerskePrincipal, eBusiness Solutions

Robin RonneManaging Director, CEO CouncilGreater Fort Lauderdale Alliance

Jim ScannellSenior Vice President, Administrative ServicesThe Travelers Companies

Tony Shou Fat Wong, MCRDirector, Workplace Resources, APJCorporate Real EstateCisco Systems

ediTOrial sTaff Richard KadzisediTOr

Chelsie ButlermanaGinG ediTOr

Bailey WebbseniOr cOnTribuTinG ediTOr

David HeatonseniOr research/ediTOrial assOciaTe

Tim Venable seniOr adVisOr

adVerTisinG & PrOducTiOn sTaff Bonnie HoftocreaTiVe direcTOr

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Michael MooneyadVerTisinG manaGer

Tim AbramsadVerTisinG manaGer

THE LEADER, CoreNet Global’s Official Publication, is published six times a year, as a bi-monthly publication commencing January/February, by CoreNet Global. Subscription rates for non-members (in U.S. dollars): = in the United States, $75; in Canada, $85; outside North America, $95. To order, contact Nicki Williams at 404-589-3241 or [email protected]. Office of Publication: CoreNet Global, 2500 Broadway St, Ste 200; Boulder, CO 80304-4237. The opinions expressed in this publication are not necessarily those of the association. THE LEADER is sent as a benefit of membership to all members of CoreNet Global. Articles published in this magazine may not be re-printed without written permission from the Editor. Editorial inquiries should be addressed to Chelsie Butler at [email protected].

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It’s not surprising that, here in one of the most beautiful areas of the country, we put a high value on

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Green th ings grow in the Valley.

september / october 11volume 10, issue 5

corporatereal estate

& workplace

Shifting to a Knowledge-Based Economy (page 12)

workplace strategies

in asia(page 20)barclay’s

sustainability enterprise (page 26)

verizon’stanya penny(page 54)

THE LEADER Online! Go to www.corenetglobal.org, click THE LEADER link under the Publications and Resources tab, and click on the magazine cover.

2011 the leader 6 s e p t e m b e r / o c t o b e r

septemberoctober

11

executive profiles: tod lickerman, Jones lang lasalle 52 tanya penny, verizon 54 bill dobbs, Georgia dept. of economic development 58

special feature: riding the Green Wave: 60 sustainable practices pay dividends for cities and real estate providers special feature: back to the future: 68 New twists on long-standing industries and emerging technologies shape southeast u.s. economc development special feature: innovation valley: 80 partners for Your business success

Industry Tracker 84outsourcing pioneer bill concannon

Career Development 88 dow chemical’s frank Kayden

Dashboard 89 2nd Quarter 2011

Capital Corner 92 attractive disposition alternative delivers results

departmeNts:leadership 4message from the ceo 8real estate in the News 10members on the move 94

a look ahead 95 In our Next Issue Calendar of Seminars Index of Advertisers

KNoWledGe-based ecoNomic developmeNt: Measuring the Talent Pool for Innovation Capacity

12

buildiNG the fouNdatioN: A Successful Client/Provider Relationship

46

loNdoN bridGe Quarter: A New Business District Will Regenerate Central London

16

embraciNG chaNGe: Workplace Strategies from an Asian Perspective

20

carboN maNaGemeNt: Barclays Takes a Sustainable Journey

26

buildiNG the bridGe: Positioning Real Estate for the New Corporate Metrics

30

the evolutioN of busiNess coNtiNuitY aNd risK maNaGemeNt: What Are the Implications for Corporate Occupiers?

36

corporate real estate best practices: A Methodology to Effectively Benchmark Performance

40

by angela cain, ceo

Message

froM the

ceo

2011 the leader 8 s e p t e M b e r / o c t o b e r

When I became CEO of CoreNet Global a year and a half ago, it became appar-ent to me after spending some time in our former office space and listening to staff members’ concerns that it was time for something different. Thus began our office transformation project, and after many months of hard work, CoreNet Global finally has a new home!

With the help of more than 70 of our Members, who designed and provisioned our new office space in the Georgia-Pacific Center in downtown Atlanta, CoreNet Global is Moving in the Right Direction with an open floor plan that fosters collaboration and productivity so that we can better serve you and reflects the branding, culture and best practices of our members’ companies.

Our new office space prides itself on sustainability with natural daylight, a recycling program, environmentally friendly furnishings and materials, and the building itself has applied for the LEED Silver certification status. We have decreased our footprint by 17 per-cent, and we are spending 33 percent less to do so.

In the November/December issue of THE LEADER, you can read about and see pictures of this glowing transforma-tion we have undergone, which will also include a list of all of the contrib-uting companies. During our November 1-3, Global Summit in Atlanta, we will be hosting an open house in the new space, so you will all get a chance to visit it in person.

While our “Moving in the Right Direction” campaign has certainly kept us busy, we here at CoreNet Global are working hard for you, our members,

with a number of different initiatives, one of which is Corporate Real Estate 2020. This transformational research project is designed to bring together the thought leaders in our profession to analyze the current and future state of corporate real estate through eight key segments, including workplace, enter-prise leadership, location strategy and portfolio optimization.

A work team dedicated to each seg-ment will meet initially at the AT&T offices in Dallas in August and will col-laborate virtually throughout the year, as well as face to face at work sessions and at our various Global Summits. Each team will then present their results at the San Diego Global Summit in April 2012 and will present a written report of their findings for a synthesis report

produced by CoreNet Global. A special 2012 edition of THE LEADER will be dedicated to this comprehensive project.

As always, our goal is to serve your needs in as many ways as we can, and our new office space and the Corporate Real Estate 2020 initiative are two important ways in which we are reflecting that goal.

out with the old, and in with the New: WelcoMe collaboratioN!

a view of coreNet global’s “buzzy” zone on the left and the “Quiet” zone on the right

the breakroom

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real estate

in the news


Atlanta Landmark Restored for Better UseJamestown Properties has purchased Atlanta’s historic City Hall East for $27 million and plans on investing another $180 million to restore the 2.1-million-sq.-ft. (195,096-sq.-m.) property into a mixed-use development called Ponce City Market. The 45-acre (18.2-hectare) prop-erty is the former home of Sears Roebuck & Co.’s Southern Regional Catalog Distribution Center, and almost 236,500 square feet (22,000 square meters) of the space will be retail space and another 21,250 will be restaurants. According to a release from www.prnewswire.com, the landmark project represents a partnership between Jamestown and its sustainable

development subsidiary, Green Street Properties, and will have an emphasis on preservation, sustainability and neigh-borhood connectivity. The project will be open to the public in early 2014, and the team will restore its former charac-ter and adhere to the National Historic Registry through such things as exterior improvement and interior restoration of the original maple floors and steel-framed windows. The project will also include office and residential space.

$2.5-billion Hospital to Open in SwedenThe new 3.5-million-sq.-ft. (325,161-sq.-m.), $2.5-billion Karolinska Solna (NKS) Hospital in Sweden is being developed and contracted by Skanska and is scheduled to

open in 2016. The NKS will feature 600 inpatient beds, 100 outpatient beds, 36 operating rooms and eight radiation bun-kers and will be designed to meet health-care and research demands for up to 100 years with an environment that caters to strengthening interaction among health-care, research and education. Its buildings will be planned so they can be durable and flexible when adding new advances in tech-nology. The hospital is aiming for a gold level from the Swedish certification system Miljoklassad Byggnad and a minimum of LEED Gold and will require roughly half the amount of power a hospital of its size normally uses. At least 98 percent of its energy needs will come from renewable sources with low carbon dioxide emissions, a combination of energy produced in-house and district heating/cooling through a heat pump plant that includes 140 drill holes and solar panels. The work force will be the biggest between 2013 and 2016, with about 3,700 working on the construction.

Louisiana Earns Top Honor as the South’s State of the YearFor the third year in a row, Southern Business & Development (SB&D) maga-zine has recognized Louisiana as State of the Year in the South. Other top-ranked states include Kansas, North Carolina and Tennessee. Several of the state’s com-munities also earned honors from SB&D. Louisiana announced a variety of proj-ects and expansions in 2010, including Nucor’s new iron and steel production facility in St. James Parish, Globalstar

Inc.’s relocation from Silicon Valley to St. Tammany Parish, P&G’s expansion in Rapides Parish, Chase’s processing center expansion in Monroe, the Blade Dynamics project at Michoud Assembly Facility in New Orleans, the expansion of the Aeroframe Services in Lake Charles and the DG Foods project in Bastrop.

The state also recently broke ground on the 94,000-sq.-ft. (8,733-sq.-m.) Louisiana Digital Media Center that will eventually will be home to 600 video game development workers and LSU’s Center for Computation & Technology. The Louisiana Digital Media Center is funded by state capital outlay dollars and Louisiana Economic Development funds and will include instructional space with cutting-edge audio/visual capabili-ties that will support LSU’s academic research efforts related to digital media and software development.

Hong Kong Welcomes Robust Retail MarketAccording to recent research from Savills, Hong Kong’s retail market has had an influx of international high-street brands and a strong expansion in tourist-related trades. Key findings from the report include: The retail leasing market remains a

landlord-biased market; tenants are now facing 25 to 50 percent rental raises upon their lease expirations or renewals. Growth momentum in the retail

leasing market remains strong, with overall prime street shop rents rising by 8.3 percent over the second quarter of 2011, led by growth in the Central and Causeway Bay sub-markets. Buoyed by continued upbeat con-

sumer sentiment and record numbers of tourists, retail sales boomed in May and June 2011. May is also reported the third-highest month on record after December 2010 and January 2011.

photo by white tengbom team

MAYOR PAUL S . LEON I M AYOR PRO T E M DE bR A DORS T-POR A DA I C OUNC IL ME MbE RS I A L A N D . WA PNE R , ShE I L A M AU T z , J IM W. bOW M A N

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ed huante national Manager toyota’s north american Part Center California

REal EstatEManagEMEnt

Knowledge-Based Economic Development:

Measuring the Talent Pool for Innovation Capacity

B Y a n D Y s H a P I R O

2011 tHE lEaDER 12 s E P t E M B E R / O c t O B E R

cOvER stORY

a site’s proximity to core knowledge and information infrastructure (such as universities and research institutes) and suitability for research parks and labora-tory buildings are often more important to innovation-based growth.

The best measure of financial capital was formerly available credit for loans. However, today venture capital, cash in the pockets of angel investors and gov-ernment grants are the preferred source of financing for innovative companies. Similarly, labor once meant people who could lift, turn, push and move products on an assembly line. Today it is increas-ingly their knowledge of science, tech-nology, engineering and math, as well as their skill in bringing new ideas to market, that creates value for a company and its community.

innovation capacity of human capital. This article identifies some commonly employed data standards and points to several nascent innovation indices that could present a more complete profile of a destination’s labor assets.

New Metrics for a New EconomyThe basic principles of economic devel-opment have remained constant for centuries. Improve the inputs of land, labor and capital and reap the benefits of jobs, payrolls, profits and taxes. How the outputs are measured hasn’t changed; though the nature of the inputs cer-tainly has. For example, land was once measured by its natural resources, its proximity to shipping infrastructure and its suitability for industrial produc-tion. While those factors still matter,

With the growing attention to the com-petitive advantages of a knowledge-based economy has come a

renewed focus on innovation as the pro-cess that can transform information into value and thus spur growth and develop-ment. This pursuit of knowledge-based economic development has intensi-fied the focus on localized assets and resources – and in particular the human capital dimensions of innovation.

Those communities able to attract or cultivate a highly educated, technically proficient, motivated and flexible work force will reap the greatest benefits from the global information-based economy. However, a significant obstacle remains the lack of standard measurements of the

Sustainability isn’t just a question of materials, it’s a whole mindset.Union Investment is sustainability.

Sustainability has many aspects, with greenness being just one. It’s a challenge which calls for the kind of holistic view that has shaped our approach to real estate for many years. For us, sustainability is about ensuring a viable future – a strategy that also benefits others, i.e. the environment, society and our partners. Our portfolio already includes 18 properties with sustainability certificates, worth a total of EUR 2.3 billion. We are actively helping to embed sustainability in the real estate sector by practising what we preach. Take advantage of our expertise, and address future questions with confidence.

www.union-investment.com/realestate

#07) UIR Image Nachhaltigkeit Ad 212,73x276,23 GB.indd 1 19.07.2011 17:55:01 Uhr

Sustainability isn’t just a question of materials, it’s a whole mindset.Union Investment is sustainability.

Sustainability has many aspects, with greenness being just one. It’s a challenge which calls for the kind of holistic view that has shaped our approach to real estate for many years. For us, sustainability is about ensuring a viable future – a strategy that also benefits others, i.e. the environment, society and our partners. Our portfolio already includes 18 properties with sustainability certificates, worth a total of EUR 2.3 billion. We are actively helping to embed sustainability in the real estate sector by practising what we preach. Take advantage of our expertise, and address future questions with confidence.

www.union-investment.com/realestate

#07) UIR Image Nachhaltigkeit Ad 212,73x276,23 GB.indd 1 19.07.2011 17:55:01 Uhr

Knowledge-based economic development: measuring the talent pool for innovation capacity


ability of a region to generate new ideas and commercialize new products or ser-vices. Often reported as the number of college students enrolled and graduated, this measure also frequently includes graduate students and post-doctorial fellows in the sciences. While the data are relatively easy to collect, they have several notable shortcomings. First, by an overwhelming number, technol-ogy entrepreneurs are older than recent graduates (typically in their mid-40s) and have worked most of their life for large firms. Second, the focus on techni-cal talent does not address other critical skills needed to bring new discoveries to the market such as finance, regulatory affairs, marketing, intellectual property management, etc. Third, it is a poor predictor of the types of innovation that built non-technology powerhouses like Wal-Mart or Starbucks. Number of persons with college

degrees. Though very general, this met-ric is commonly used because of its ease of extraction from the U.S. Census and other data sources. The attraction of this measure also is premised on the reason-able assumption that workers with more knowledge are the most likely to inno-vate. Other popular indicators include the number and/or share of PhDs, MS and BS degree holders compared to the United States at large. High school performance. Further

down the innovation “gradient” are data describing high school graduation rates and average SAT scores, etc. At first glance such metrics would seem to be plausible indicators of creativity and innovation. After all, a person who has graduated high school with high scores on the scholastic aptitude tests is a more likely entrepreneur than a high school dropout. However, high school graduation rates do not help us understand how many students choose to attend college, if they went to col-lege nearby or where they reside now. Perhaps a better metric would be data describing the number of students hav-ing taken advanced placement or inter-national baccalaureate courses. Number of persons employed in

high-tech industries (using NAICS – the

have been developed and perhaps none so abundantly as those metrics that attempt to assess the contributions of human capital to an area’s innovation economy. A sample of these North American measures and their advan-tages and drawbacks is described below. New Scientists and Engineers. The

objective of this metric is to depict the

What Human Capital Dimensions Are Measured?Over the centuries, standardized meth-ods have been developed to gauge the important aspects of land, capital and labor inputs. However, the evolv-ing nature of innovation often defies measurement by the more traditional standards. Rather, dozens of methods

figure 1: examples of innovation indices that focus on human capital

50 state indices of innovation capacity and commercialization capacity

¡ population age 25-64 years with a bachelor’s degree

¡ population age 25-64 years with some college or associate’s degree

¡ change in middle-aged population (ages 25-44 years)

¡ average small establishments per 1,000 workers

¡ change in high-tech employment share

¡ average high-tech employment share

¡ technology-based knowledge occupation location quotients

massachusetts index of the innovation economy

¡ high school attainment of persons ages 19-24

¡ per pupil spending in K-12

¡ state higher-education appropriations per fte

¡ advanced placement testing

¡ timss mathematics scores

¡ college degrees conferred

¡ science, technology and engineering career choices and degrees

¡ intended major of high school seniors

¡ engineering, computer & information science, health and biological science degrees

¡ Jobs in science, technology, engineering and math fields

¡ information technology professionals in the work force

¡ it professionals as a percent of the work force

¡ it professionals by cluster

¡ migration in and out of state

¡ international and net domestic migration

¡ relocation by college-educated adults

state indices of innovation and commercialization capacity

¡ science & engineering (s&e) doctorates awarded

¡ percentage of the population with a bachelor’s degree or higher

¡ number of s&e postdoctoral fellows

¡ number of full-time s&e graduate students

¡ total number of s&e graduate students

¡ number of persons employed in high-tech naics code industries

1. industrial machinery and equipment

2. electronic and electric equipment

3. instruments and related products

4. chemicals and allied products

5. communications

6. business services

For more information on this topic, please visit CoreNet Global’s Knowledge Center Online.

Attracting and Inspiring the Knowledge Workerhttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11000363

Keeping Pace with a Changing Work Force: The Right Mix of Programs and Incentives Can Attract Top Talenthttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11227371

About the Author

Andrew Shapiro heads Biggins Lacy Shapiro & Company’s location advisory practice, help-ing clients translate their business objectives and strategic vision into

rational, balanced location decisions. His responsibilities include site selection (in partnership with Wadley Donovan Gutshaw Consulting), feasibility analysis and labor market analysis.

2011 the leAder 15 s e p t e m b e r / o c t o b e r

Knowledge-bAsed economic development: meAsuring the tAlent pool for innovAtion cApAcity

North American Industry Classification System codes). These data typically include the codes for industrial machin-ery, electronic equipment, instruments, chemicals, communications, research and development and business services. This metric addresses the reality that most successful technology start-ups are founded by former employees of large corporations. It also accounts for that broader skill set (beyond the sciences) needed to fully realize the potential of new discoveries. However, again, by relying on measures of technology-based employment the economic developer or site selector may be ignoring sources of business model innovation. Number of persons employed in

tech-based occupations (using the U.S. Bureau of Labor Statistics Standard Occupational Classification codes). Metrics based on occupational data are perhaps the best yardstick of specific STEM (science, technology, engineering and mathematics) skill sets in a particu-lar destination. However it’s important that users distinguish between occupa-tions engaged in the social sciences versus those focusing on the physical or natural sciences (e.g., biologists, analyti-cal chemists). Distinction should also be made between the scientists and engi-neers who design and direct much of the actual discovery and development pro-cesses and the various technicians who often lack an advanced degree and whose primary mission is to assist and report the results.

Examples of Innovation IndicesOver the years there have been numer-ous attempts to combine human capital and other variables into general indices of the knowledge capacity of nations, states and regions. For the purposes of this article, it would be insightful to examine three state indices that have garnered national attention, includ-ing The Indiana Business Research Center’s Innovation in American Region, the John Adams Innovation Institute’s Index of the Massachusetts Innovation Economy and Jeremy Hall’s (University of Texas at Dallas) 50 State Indices of Innovation Capacity and

Commercialization Capacity. Each of these tools attempts to quantify the capacity of a region to support turning new ideas into economic growth through the discovery and commercialization of new products and services.

These three indices used different combinations of variables to measure innovativeness. For example, Innovation in American Regions found a high degree of correlation between economic growth and educational attainment; employment by occupation, employment by industry, access to broadband, level of R&D expen-ditures; availability of venture capital funds, numbers of new patents, small businesses per thousand workers and population growth of 25- to 44-year-olds.

The Massachusetts Index of the Innovation Economy (used by the state’s leadership to benchmark against other leading technology hubs) uses 25 such indicators. They are grouped into economic measures (e.g., percent of employment in science-related fields), research (e.g., corporate R&D activity, patents); technology development (e.g., number of Small Business Innovation Awards); business development (e.g., IPOs); capital formation (e.g., venture capital investment per capita) and talent. For this latter category they specifically measure the working population with bachelor’s or higher degrees; high school attainment of 19- to 24-year-olds; public investment in K-16 education; and spe-cific science, IT and engineering degrees. The result is a terrific tool for policy makers that also plays an important role marketing the state.

Hall’s 50-State Indices of Innovation Capacity and Commercialization Capacity is more of an academic rank-ing than the other two indexes dis-cussed, but it does provide practical insights. It comprises six human capital and 13 financial capacity variables. The findings led him to conclude that the effort needed to build the human capi-tal required to achieve an innovation “critical mass” would likely require a massive shift in state spending on behalf of science and engineering education. Hall has argued that those states that lack the financial resources

or talent base are unlikely to ever catch up and thus should continue to focus on more traditional industries.

ConclusionCreativity and the capacity for innova-tion spring first and foremost from the human mind. Coupled with the ongoing shift toward a knowledge-based economy, this emphasis on human capital requires that site selectors and economic develop-ers alike develop new methods to identify and quantify those attributes (education, proficiencies, entrepreneurial skills and spirit) that can distinguish a truly innova-tive work force. The metrics and indices profiled here provide good examples of new standards being developed to measure human capital and the ability to innovate.


London Bridge Quarter: A New Business District Will Regenerate Central London

B Y B a R O n P H I l l I P s a n D M a R K H O l M E s

2011 tHE lEaDER 16 s E P t E M B E R / O c t O B E R

ground link. Today, it is estimated that around 350,000 commuters and travellers pass through the London Bridge transport hub every day. Within five years or so, this is anticipated to grow to more than 500,000, as further improvements to the station’s infrastructure are completed. While London Bridge Station is an above-ground rail terminus in its own right, it is also linked to three other termini and will serve more areas as the new Thames Link service becomes operational, expanding the network to include 150 additional stations.

LBQ and the ShardAlong with the improvements and expansions to London Bridge Station, LBQ is positioned to help breathe new life into the area. LBQ comprises two major buildings: the Shard and The Place, as well as important infrastruc-ture that links the properties to each other and to the adjacent transport links.

The two buildings are being com-pleted during a time when there is an acute shortage of international standard

Over the past decade, Sellar has battled to bring this development to London because of its potential role in helping regenerate one of the last parts of central London that has suffered from a lack of investment. The area surrounding London Bridge Station has changed dra-matically over the last 10 years, and is it becoming vibrant and dynamic, increas-ingly appreciated for both its transport links as well as its proximity to other parts of central London.

The Southbank has rapidly changed as renovation and regeneration have spread eastward toward Tower Bridge and beyond. New cultural projects such as the Tate Modern and the Globe Theatre have done much to increasingly draw people south of the Thames. Near London Bridge, the newly revitalized Borough Market has been transformed into one of London’s gourmet centers, attracting people from all over the city. Part of the regeneration success over the past 10 years has been London Bridge Station’s improved transport links, which include the addition of a key East-West under-

Western Europe’s tallest commercial building – an iconic global landmark that is already the

most talked about new development in London since Wren battled with the city fathers to build St Paul’s Cathedral nearly 500 years ago – will be completed May 2012.

The 1,016-ft. (310-meter) Shard will form the heart of a new district being created adjacent to one of London’s busiest transport hubs, London Bridge Station. Known as London Bridge Quarter (LBQ), this new business district will provide almost 2 million square feet (185,806 square meters) of office, leisure, residential and retail space together with a public piazza and a 21st-century sta-tion and bus concourse.

LBQ has been master planned and designed by one of the world’s leading architects, Renzo Piano, and reflects the vision and drive of developer Irvine Sellar.

Revitalizing London Bridge

Sellar believed that the redevelop-ment of the office building into a seri-ous skyscraper was not only viable but necessary to transform the area. Despite the full backing of the local planning authority and the then London Mayor, Ken Livingstone, Sellar still had to fight a public enquiry before getting the green light to build what would become known as the Shard.

Piano and his team worked closely with key consultants from WSP and Arup to overcome some of the issues presented by the site’s proximity to both London Bridge’s above-ground and underground networks, as well as to ensure a neutral impact on the Shard’s direct environment.

But it has never been plain sailing. Aside from the difficulties in securing planning consent, Sellar was on the verge of finalizing the financing of the project when the financial markets col-lapsed following the demise of Lehman. Within fairly short order he found alter-

to The Place, a 430,000-sq.-ft. (39,948-sq.-m.) corporate headquarters office building also designed by Piano that shares many of the Shard’s character-istics, including triple-glazed glass, which maximizes natural daylight but dramatically reduces solar heating. It is estimated that The Place’s carbon emissions will be 60 percent less than a similar office building.

Project BackgroundIronically, it was London Bridge Station’s status as a key transport hub that was the catalyst behind the LBQ develop-ment. In 1999, the British Government published a white paper that stated that proposed developments of tall buildings on or around major transport hubs would be looked upon favorably in planning terms. A year earlier, Sellar and two partners had acquired Southwark Tower, a 1970s office building adjacent to the station and occupied by international accountancy firm PwC.

Grade-A office buildings available for lease. It is estimated there will be a spike in demand for new accommoda-tion over the next two years, as leases signed over the past 15 to 25 years expire and tenants look for new modern space that fulfils their corporate needs.

The Shard is a mixed-use building comprising approximately 600,000 square feet (55,742 square meters) of office space on its lower levels, three floors of restaurants, a five-star hotel and spa on the mid-levels, luxury residences and the public viewing galleries on the top floors.

The Shard reflects Britain’s ability to create both remarkable architecture and practical infrastructure and is expected to be London’s latest tourist attraction with millions of visitors anticipated to take the high-speed lifts to the public viewing galleries on the top floors. The new Olympic Village is also being built just a few miles away.

A public piazza will link the Shard


london bridge Quarter will feature two major buildings – the shard and the place. (photo provided by sellar property)

London Bridge Quarter: a new Business district wiLL regenerate centraL London

2011 the Leader 18 s e p t e m B e r / o c t o B e r

native backers and finance, as the state of Qatar became his development partner, and Qatar National Bank provided con-struction financing for the entire project.

The relationship between Sellar and the main contractor, Mace, has led to the Shard breaking more records than just height. To achieve critical time and cost savings, Mace used top-down construction, enabling the sub- and super-structures to be worked on simul-taneously, which shaved four months off of the schedule. This process had never been attempted before on a building of this size and scale.

As a result, the Shard has already become a landmark on London’s sky-line, even though practical completion is still 10 months away. While the 244-meter core has been completed and the 72 floors will be finished by early September, there is still a 66-meter spire to be added to the top of the building. At the same time, The Place is also coming out of the ground and will be completed in April 2013.

Without a doubt, LBQ is the larg-est speculative development currently underway in London, and it is being delivered at a time when the capital’s market needs buildings of this quality to serve tenants’ needs well into the 21st century and beyond.


DTZ Property Times Central London Q1 2011http://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11339267

London Discovery Forum 25 May 2011 – Final Summary Findings Reporthttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11527882

about the authors

Baron Phillips is public relations consultant for LBQ Ltd., an inter-national joint venture between the State of Qatar and Sellar Property.

Mark Holmes is Mace’s COO, Consultancy, and has been developing the company’s corporate real estate partnerships and entry into the North American market.

View of the shard at dusk (photo provided by sellar property)

London Bridge station (photo provided by sellar property)

R

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Project Development Details

Typical Cluster Break-up

Clients

Support Services

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EON Free Zone, a 4 million sq. ft. IT & IT-eS 'SPECIAL ECONOMIC ZONE’ with a campus spread of over 45 acres, promises a growth

driven future and dynamics of a free market democracy, enabling the global knowledge economy to grow and scale seamlessly.

EON Free Zone is strategically located within the Eastern IT Corridor of Pune, and is at a distance of only 06 km from city's CBD locale and

08 km from the international airport. Well-developed catchment areas around the project give access to rich talent pool.

Project Development Details

Typical Cluster Break-up

Clients

Support Services

Campus spread : 45 acresTotal built-up area : 4 million sq. ft. across 4 clusters Built-up area delivered : 2 million sq. ft.

Total built-up area : 1 million sq. ft.Wings 1 & 4 : 170,000 sq. ft. each Wings 2 & 3 : 280,000 sq. ft. each Typical floor expanse : 30,000 sq. ft. / 35,000 sq. ft.

Food-Courts managed & operated by ISS, Auditoriums, Amphitheater, Transportation Services, Air Taxi, Fitness, Health Club & Outdoor recreation operated by ABS, Swimming Pool, Medical Facility, Outdoor Cafes, Book Store operated by Odyssey, ATM-Citibank and more.

For more information on EON Free Zone :

: [email protected] / www.panchshil.com

Call : +91 – 90110-13347 / +91 – 98238-02563

Email : [email protected]

: [email protected]

Allscripts, DigiCaptions, EATON Technologies, Euronet, Global Advertisement Services, Global SMS Networks, Honeywell

Automation, Idhasoft, InfoBeans, Maxxton, METRO, Mphasis - An HP Company, Polaris Software Lab, PRISM INFORMATICS,

,QSG Resource Management, SUNGARD, Sears IT & Management Services, Tavisca Solutions, TATA Communications, Tieto,

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Embracing Change: Workplace Strategies from

an Asian Perspective

B Y D E R E k M a c k E n z i E

2011 thE lEaDER 20 s E p t E M B E R / o c t o B E R

While it is easy to generalize, it is quite safe to say that more Asian companies are more conservative in their outlook toward innovations in office occupancy, style and their approach to space plan-ning than their Western counterparts.

There are several reasons why this may be so, and these reasons will resonate with those international office-planning strategists who were promulgating “new-age workplace prac-tices” in Europe and America through-out the 80s/90s.

1. The business has been successful so far, so what’s the point of changing? Change poses risk; why would it be good to expose the company to unnecessary risk?

2. The office is still viewed very much as a necessary cost – not yet as a benefit or an instrument of high productivity, greater collaborative enterprise or cru-cible for innovation.

welcomed. Many Asians join these com-panies, which are nearly always man-aged in the same or similar ways they are in their countries of origin. As far as we have observed in our 30 years of operating in this continent, Asians have little or no problem adapting to the con-temporary ways of doing business in an international workplace.

There are some Asian companies and even government departments that also adopt international principles in their workplace strategies. However, our obser-vations conclude that they would be in the minority amongst their local peers if they fully embraced contemporary attitudes toward workplace planning and design.

This has nothing to do with how suc-cessful the Asian organizations might be, but it is interesting to note the dif-ferences that exist among the work environment types in the Asian context.

Idoubt if there is a person in the developed world who hasn’t heard that Asia is advancing economi-cally and in its quality of life. In parallel with this phenomenon,

the Asian influence internationally seems to be universal.

The effect Asia is having on the global mindset is extraordinary. But as good as it is to have the products and services from developed economies being sold into aspiring Asia, the products and peo-ple of the world’s most populous nations are increasingly finding their ways into European, American and Antipodean homes and businesses, as well.

This two-way traffic is exposing the world to a scale of cultural inter-face never before seen or experienced. Thousands of foreign companies are being introduced into Asian economies every year, and by and large, they are


3. The traditional office structure is very much entrenched in the value perception of management status and hierarchy.

4. New-age workplace practices, pro-cesses and systems are not yet a part of everyday experience, and while labor costs remain relatively low (in comparison to more developed economies), there is no compelling incentive to leverage technol-ogy or innovation in the workplace.

5. The cost is too high in terms of the physical assets required and in terms of productivity loss, downtime, change management and training.

Asia, Before and AfterIn understanding these reasons, it is nec-essary to recognize that Asia, as an eco-nomic force to be reckoned with, is very young. This period of Asian ascendancy began with China’s economic transfor-mation in the 80s. Indeed, China didn’t really pick up steam until after it was welcomed into the WTO in November 2001. And India, with a behemoth popu-lation, started its own growth story about 10 years behind China’s (See Chart 1).

The other tiger economies of Taiwan, South Korea, Indonesia, Malaysia, Thailand and Singapore all benefited from a sensational run, up until the Asian Financial Crisis (1998-2004). With their increased trade, rising numbers of foreign knowledge workers and increas-ing international populations, their economies boomed, particularly through direct foreign investment. Although all have been growing in regional and global importance, this only began about 20-25 years ago.

While Asia’s emerging fortunes are currently (largely) driven by trade, their own resources and low-cost productiv-ity heading for the U.S. and Europe, this will certainly not be the case in the next generation. Asia will sooner, rather than later, become its own best market.

Asia as a Gigantic, Yet Disparate, RegionRelating Asian business or workplace environments is difficult. They are nearly all as different as chalk is to cheese. Even neighbors Singapore and Malaysia cannot be precisely compared. It is much easier to draw similarities between Hong Kong and Singapore,

Internal balconies, also known as brand verandahs, are used for meetings and casual discussions at the new hindustan Unilever campus in India.

Chart 1: GPD Growth in Asia from 1990 to 2014 Projections

source: International monetary Fund, World economic outlook database east asia

billion U.s. dollar

2500

2000

1500

1000

500

0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

east asia

the U.s.

euro-zone

china

Japan

India

aseaN-5

Korea

Embracing changE: WorkplacE StratEgiES from an aSian pErSpEctivE

2011 thE lEadEr 22 S E p t E m b E r / o c t o b E r

The importation of global standards and workplace strategies is laudable from many points of view. One of the most obvious advantages is the pre-dictability of any renovation outcome. Others include the quality and produc-tivity of workplace environments, posi-tive contribution to recruiting efforts and continuity of corporate goals in sus-tainability, communications, flexibility and technical enablement. However, many of the older, more established local and regional businesses would regard them as challenging to adopt from both a personal status and a com-petitive cost standpoint.

Ready for ChangeNevertheless, the landscape is chang-ing in Asia. Workflows and patterns are adapting to better suit a new era of information sharing, and this is provid-ing distinct competitive advantages. The term “collaboration” is no longer restricted to a group of people huddling together over coffee to brainstorm a

where foreign commercial interests have had the most effect over recent decades. Multi-national corporations in these two global cities import best-prac-tice theories and practices, which in turn become benchmark standards for local companies and even governments.

It is notable that many of the coun-tries of Asia have only one major city that is the center of business and poli-tics, despite huge populations. With the exceptions of the obvious titans of inhabitancy, only Japan and Vietnam have more than one. The majority of Southeast Asian countries, while grow-ing, are not known as international leaders, being largely agricultural econ-omies or driven by the value of their natural resources. Exceptions are the larger cities of Kuala Lumpur, Bangkok, Jakarta and Singapore, which compete constantly for potential foreign invest-ment and the establishment of inter-national manufacturers and banking, trade, media, production and engineer-ing service industries.

a series of bridges connects the brand verandahs over the “Street.”

chart 2: growth in mobile technology2011 pc and non-pc Sales

Source: deloitte & touche tohmatsu limited, 2010

pc¢ desktops ¢ laptops ¢ netbooks

non-pc¢ tablets ¢ Smartphones

150

375

50 40

200

new idea. Texts, Twitter and email bring people together in a very informal and personal way without geographic restrictions.

The use of cell phones, smartphones and laptops is accelerating twice as fast in Asia than it is in the U.S., accord-ing to the Economist Intelligence Unit Limited 2011, as Asians bring their per-sonal communication devices into the workplace (See Chart 2).

And the workplace is increasingly about work wherever you are, work when you want to, and work when you need to. As work gravitates into the social life of today’s achievers, social life is also making its presence in the workplace. The lines that used to be clear between the time spent work-ing and the time spent socializing are increasingly fuzzy. As a result, both the workplace and social spaces are adapt-ing, and aspects of each are beginning to look similar.

Case Study: Hindustan UnileverWhen Hindustan Unilever decided to bring all of its Indian operations together, the objective was a singular campus, same values, shared systems and one culture under its new inter-national brand identity. Through the planning and design process, work-space strategies were developed to help Unilever with some glaring issues: Many people within the same orga-

nization didn’t know each other. This was partly because of the physical dis-tance between office locations. Team spirit was not optimized as a

strategic imperative toward collabora-tion and high productivity. There was a high (although unin-

tended) tendency toward disruption when visitors attended internal meetings. The number and location of meet-

ing spaces were leading to a great deal of wasted time in travelling and waiting. Information technology and com-

munication systems were patchy, inconsistent and often out of alignment. A singular approach was needed to

unify everyone and regain confidence in the employer. The restrictive nature of the old

offices offered little, if any, room for “collaboration by collision” (instances of corridor conferences, interaction on-the-go, ad-hoc conversations or infor-mal information/opinion sharing).

By bringing Unilever’s national work force together into one campus, the chance to resolve some of these issues was taken; more so that Unilever was intent on taking advantage of this occasion to create a single culture of shared values and an integrated spirit of mutual support and endeavor.

Through a unified team effort and strong appreciation of what the client wanted to achieve from the architect, space planner and interior designer, the entire Unilever campus became a single

Embracing changE: WorkplacE StratEgiES from an aSian pErSpEctivE

2011 thE lEadEr 23 S E p t E m b E r / o c t o b E r


community. The campus being regarded as a “community” and not an office had serious implications for the designers in their approach to spatial concepts and connectivity. Every opportunity was exploited as a chance to spontaneously com-municate and develop relationships.

Furthermore, all internal meeting rooms were brought out of their traditional location to balconies outside the office area. These balconies were termed “Brand Verandahs,” and they became a key element of the design; promoting con-stant business and social discussion.

The bridges crossing the atrium were positioned in vari-ous angles to promote visibility, and each ends at a Brand Verandah where a variety of meeting or lounging opportuni-ties is provided. As a consequence, these office spaces tend to be quieter. Even The Street, an area sprinkled with coffee shops, ice-cream stands, a pharmacy, bookshop, food court and media center, is set up for meetings, seminars and infor-mal workshops.

Moving ForwardWorkplace strategies must take into consideration the changes taking place in the work force, as well as those issues that are imbued during the implementation process (sustainability, technology, communications, security, mobility, flexibility, etc.).

To emphasize this point, I will use the following personal anecdote. While waiting for a taxi last month, I was fasci-nated to overhear a casual conversation taking place among five young men. Their discussion was focused on their employers’ attitudes toward sustainability and the challenges the companies for which they worked were experiencing with waste disposal and pollution. These issues affected these young people and how they felt about their jobs and even themselves as employees.

It is clear that the relationship between the employer and the employee is undergoing profound change. The world’s Baby-Boom professionals are not just having to cope with the new tools and techniques of every business day, but also the nature of each company’s response to today’s hyper-competi-tive market. Listening to clients talk about productivity and workplace efficiency, it is obvious there is a compelling need to collaborate for mutual success.

The workplace needs to respond to these relationships. Organization structures are flatter, and there is a waning desire for complex hierarchical structures. More creative reward systems for success and achievement are replacing private offices, and office planning, design and furniture have changed radically.

In addition, many long-held beliefs that support value systems related to workplace design are being challenged. A far greater degree of openness and egalitarianism in layouts, scale, desk provisions and even décor is the result of new attitudes toward what stimulates team spirit/loyalty, encour-ages energetic activity and provides job satisfaction.

In Asia, it can be awkward or even difficult for the designer

The right people.

The right connections.

The right place.

City of Oshawa, Economic Development Services 1-800-667-4292 I [email protected] I www.oshawa.ca

An educated and skilled work force, direct access to various transportation modes, attractive real estate, leading edge technology and home to four post-secondary institutions all combine to make Oshawa an excellent location for a

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Leveraging a Talented Workforce Across Asiahttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11117102 The Dynamic Society: Our Cities, Our Businesses, Our Lives Part 1: Globalscape: The Future of Corporations, Cities and Regions in a Global Erahttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11232301

About the Author

Derek Mackenzie is the Managing Director at Designphase DBA.

to confront these issues and vigorously champion contemporary thinking. Powerful individuals can still influence corporate attitudes, so it is even more necessary to have the owner’s accep-tance or even the desire to drive the need for change.

In Asia, much of the initial suc-cess experienced by these emerging economies is attributed to the efforts, entrepreneurialism, risk and drive of individuals, families and a few govern-ment-linked companies. As a conse-quence, the business communities are not as flush with corporations as they tend to be in the U.S. and Europe. Also, many Asian nations still carry strong patriarchal characteristics and can be very conservative in their outlook.

Now that Asia is positioned for ascendancy on the world stage with an immense, low-cost work force and a wealth of resources, the sons and daughters of Asian families are (or have

already been) educated on the respon-sibilities of a newly globalized world economy in which Asia is very much a focal point and agent of change.

EmbrAcing chAngE: WorkplAcE StrAtEgiES from An ASiAn pErSpEctivE

2011 thE lEAdEr 25 S E p t E m b E r / o c t o b E r

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Carbon Management: Barclays Takes a Sustainable Journey

B Y n o R a P o P E s c u - K i R B Y

2011 thE lEadER 26 s E P t E M B E R / o c t o B E R

center in Absa Towers, which provides lower carbon energy as well as security of supply. This was a key contributor toward stable carbon emissions in South Africa in 2010.

A significant proportion of our energy consumption comes from technology. We are actively working to reduce this impact through a number of initiatives, including consolidation of data centers, virtualiza-tion of servers, maximizing free cooling, managing operating temperatures and improving the efficiency of desktops. In 2010 we managed to achieve an absolute reduction in energy consumption across data centers globally. A key success was achieving a LEED Platinum rating for our new 322,971-sq.-ft. (30,000-sq.-m.) Slough Data Centre, one of very few of its kind in the world to achieve the standard and the first in the U.K. The site has also been cer-tified with a top-rated BREEAM Excellent. We also obtained LEED Gold Certification for our space in Roppongi Hills Mori Tower in Tokyo, which features high-effi-ciency air conditioning units and low-flow water devices.

By developing a better understanding of the factors that influence our carbon footprint and improving the data report-ing protocols, we managed to stabilize the

nents. Our top 60 buildings (by energy con-sumption) account for just under half of all our building-related carbon emissions. The investment bank and retail bank contribute in almost equal shares to our carbon emis-sions (29 and 30 percent), while our South African subsidiary – ABSA – has a higher percentage (41 percent).

Our Carbon Footprint around the WorldThe regional distribution of our property portfolio is an influencing factor for our carbon footprint, as emissions are directly linked to the local energy supplies. For example, in France our carbon emis-sions are significantly reduced because of lower emissions associated with nuclear energy. At the other end of the scale, our African operations contribute in a larger proportion to our carbon foot-print (46 percent) despite having energy consumption similar to the U.K., which contributes only around 30 percent to our carbon emissions. This is because of the use of carbon-intensive fossil fuels in that region. To address these issues, we are constantly looking for opportunities to reduce the negative impact of regional energy sources. One such example is the installation of a new gas-powered energy

The impact we have on the communities in which we operate around the world is a key performance area for Barclays and has been so

for many years. Citizenship, as we call it today, ranks alongside our highest strate-gic priorities. Our citizenship performance is measured in three ways: the approach we take to doing business, the contribu-tion we make to economic growth and the support we give to communities.

A key element of the positive contribu-tion we want to make is to reduce the environmental impact of our operations. This will be achieved in three ways: By developing products and services

that enable the transition to a low carbon economy By collaborating with stakeholders

to manage the risks of climate change to our operations, customers and clients and society at large By reducing our carbon emissions. Managing and reducing our carbon

footprint has been by far the biggest chal-lenge for the past few years. Our carbon emissions derive primarily from buildings (88 percent) and travel (12 percent). The building portfolio includes almost 6,000 buildings in 55 countries across five conti-

Data centres37%

Mixed buildings38%

Offices/other25%

Retail network/other

Top 60 buildings 44% Rest of the buildings 56%

Chart 1: Barclays’ Carbon Footprint around the World

Barclays Carbon Map (2010)

dard for our firm-wide Environmental Management System, and in 2010 we extended coverage to include the Barclays Capital and Wealth operations in Birmingham in the U.K., Moscow, Singapore and the key New York/New Jersey operations in the U.S. We are now working on integrating various ISO 14001 initiatives across our operations.

Another important factor in achieving results has been the establishment of a strong structure to manage the environ-mental impact of our global operations. The firm-wide Built Environment and Sustainability Steering Committee has been a key component of this. It was set

Dow Jones Sustainability Index. Our performance in 2010 was relatively flat across economic, environmental and social dimensions of the index, reflecting strong performance against increasingly strict performance criteria.

Our strategy for carbon neutrality is based on first reducing the carbon emis-sions from our operations and then offset-ting the remaining emissions through the purchase of carbon credits. We have been offsetting emissions in stages, first from our U.K. operations (2006), all European emissions (2007), followed by global car-bon neutrality in 2009.

We are certified to the ISO14001 stan-

total emissions in 2010, which remained similar to 2009 levels. We also achieved a reduction of 1.81percent/FTE, which was in line our target to reduce emissions per employee by 2 percent.

CRC Energy Efficiency SchemeRecent years have seen an increase in energy and carbon regulations around the world. This has had a positive impact on our environmental work, as it required us to tighten our processes and procedures to ensure data accuracy, correct reporting and compliance. The introduction of the CRC (Carbon Reduction Commitment) Energy Efficiency Scheme in the United Kingdom has had the most significant impact, as the scheme covers about a third of our global carbon emissions. The CRC scheme is akin to a carbon levy rather than an emis-sions trading scheme, and therefore has a financial implication.

The mandatory CRC scheme has been a complicated exercise to prepare for, as it required detailed investigation of our entire U.K. energy consumption. In preparation for the CRC, we accelerated the roll out of automated metering across our U.K. retail branch portfolio. In addi-tion, we achieved Carbon Trust Standard Certification for major sites, including the Barclays Group headquarters in London. The standard covers about two thirds of our U.K. carbon emissions and helps us meet the requirements of the legislation.

To assess our performance, we partici-pate in a number of performance indices; benchmarks; and environmental, social and governance research initiatives, including: Carbon Disclosure Project. In 2010

we ranked 6th in the global financial sec-tor in the Global 500 Carbon Disclosure Performance Leadership Index and received an A rating in the Inaugural Carbon Performance Leadership Index. The 2010 score of 87 out of 100 was an increase of 13 points on our 2009 score. This was driven by improved disclosure of the management and reporting of climate change risks and opportunities. Newsweek Green Rankings. We

ranked second in the financial services sector and number 12 overall in this initiative among Newsweek and three research institutions that developed com-prehensive data-driven rankings for the world’s largest firms.

2011 The leaDeR 27 s e p T e M B e R / O C T O B e R

Chart 2: Barclays’ CRC energy-efficiency scheme

C02 (1,103,000 tonnes)

Buildings 88% Travel 12%

Geography

Building Type

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ste

rsRest of the World 24%UK 30%africa 46%

Inve

stm

en

t B

an

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Carbon ManageMent: barClays takes a sustainable Journey

2011 the leader 28 s e p t e M b e r / o C t o b e r

Giving more focus to other perfor-mance areas like water, paper, waste Extending best practices and pro-

cesses across our global portfolioBy managing our environmental

footprint, we support our wider corpo-rate citizenship objectives, and we can demonstrate in a measurable way the contribution we make to the climate change agenda while delivering energy efficiency and cost benefits to our property portfolio.

up in March 2010 with representatives from across Barclays with a remit to meet our global sustainability objectives and to continually improve the energy and carbon performance.

Looking back at our performance over the past few years, we have seen a mate-rial improvement in our ability to control environmental performance. There is still a significant amount of work to do to achieve our ambitions, but we think we are establishing a good platform from which to build into the future.

Some of the key topics for us over the next few years include: Meeting our current (absolute) emis-

sions reduction targets of 4 percent by end of 2013 Building momentum for ongoing

reductions into the longer term Improving our ability to control

outcomes Improving our management of

energy cost and security risks


Carbon Disclosure Project: Global Report on C40 Citieshttp://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=11638948

Discovery Forum - Oct 2010 - Twin Cities - Target Presentation: Targeting Carbon Management in Corporate Real Estatehttp://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=10385477

about the author

Nora Popescu-Kirby is responsible for sustain-ability within the overall Barclays property man-date, which involves the development of group-wide sustainability

performance; progressing a development agenda; and managing group-wide policies, standards, controls, systems and processes.

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Reactive? Proactive?Which are you going to be?

ü Will you be ready well in advance for the anticipated - and fast approaching -FASB lease accounting changes?

ü Have you captured and validated all required information for real estate leases and non-real estate leases such as offi ce and manufacturing equipment, computers, fl eets of cars and trucks, etc.?

ü Do you have resources and processes in place to handle the staggering amount of work the new policies will require now and in the future?

INTELLIGENT REAL ESTATE MANAGEMENT. MADE EASY.


For more information, visit www.virtualpremise.com to download our latest whitepaper and to view our FASB video.

For more information, visit www.virtualpremise.com our latest whitepaper and to view our FASB video.



WHITE PAPER

If you are feeling ill prepared for the coming Financial Accounting Standards Board (FASB) lease

accounting changes, you are not alone. In a recent “Trends in Real Estate Information Management”

survey conducted by Virtual Premise, two-thirds of respondents admitted to being unprepared for the

pending FASB changes. While a great deal of uncertainty remains around the ultimate outcome of the new

standards, one thing is certain — FASB changes are coming, ready or not.

And that means making sure your lease management house is in order before the changes hit. Although

details about how it will all work remain cloudy, the relevant question at this point is: how do you get ready

for the inevitable? Virtual Premise recommends focus in two primary areas: first, get your business ready

and second, get your lease data ready. This focus will help ensure that your response to the coming FASB

lease accounting changes will be proactive, rather than reactive.

Readiness is the

Best Game Plan

Get your lease management house in order to prepare

for the anticipated FASB lease accounting changes

by Tanya Nebo, Esquire, Lead Senior Analyst and John Seckman, Product Manager

BUSINESS

DATA

Let Virtual Premise help you proactively prepare for the prospective new policies.

As the expert in SaaS-based real estate information management solutions, Virtual Premise utilizes industry best practices to help you manage the data required for compliance with the anticipated policies.

Contact Jim Dooley today to learn more about the anticipated leaseaccounting changes at 404.969.1278 or [email protected]

Corporate Real Estate Executives

VP The Leader Ad 07-28-11.indd 1 7/29/11 11:35 AM

Reactive? Proactive?Which are you going to be?

ü Will you be ready well in advance for the anticipated - and fast approaching -FASB lease accounting changes?

ü Have you captured and validated all required information for real estate leases and non-real estate leases such as offi ce and manufacturing equipment, computers, fl eets of cars and trucks, etc.?

ü Do you have resources and processes in place to handle the staggering amount of work the new policies will require now and in the future?



For more information, visit www.virtualpremise.com to download our latest whitepaper and to view our FASB video.

For more information, visit www.virtualpremise.com our latest whitepaper and to view our FASB video.



WHITE PAPER

If you are feeling ill prepared for the coming Financial Accounting Standards Board (FASB) lease

accounting changes, you are not alone. In a recent “Trends in Real Estate Information Management”

survey conducted by Virtual Premise, two-thirds of respondents admitted to being unprepared for the

pending FASB changes. While a great deal of uncertainty remains around the ultimate outcome of the new

standards, one thing is certain — FASB changes are coming, ready or not.

And that means making sure your lease management house is in order before the changes hit. Although

details about how it will all work remain cloudy, the relevant question at this point is: how do you get ready

for the inevitable? Virtual Premise recommends focus in two primary areas: first, get your business ready

and second, get your lease data ready. This focus will help ensure that your response to the coming FASB

lease accounting changes will be proactive, rather than reactive.

Readiness is the

Best Game Plan

Get your lease management house in order to prepare

for the anticipated FASB lease accounting changes

by Tanya Nebo, Esquire, Lead Senior Analyst and John Seckman, Product Manager

BUSINESS

DATA

Let Virtual Premise help you proactively prepare for the prospective new policies.

As the expert in SaaS-based real estate information management solutions, Virtual Premise utilizes industry best practices to help you manage the data required for compliance with the anticipated policies.

Contact Jim Dooley today to learn more about the anticipated leaseaccounting changes at 404.969.1278 or [email protected]

Corporate Real Estate Executives

VP The Leader Ad 07-28-11.indd 1 7/29/11 11:35 AM


Building the Bridge: Positioning Real Estate for the

New Corporate Metrics

B Y J a n i c E B a R n E s , c a R o l Y n R o o s E a n d K E i t h P E R s K E

2011 thE lEadER 30 s E P t E M B E R / o c t o B E R

development and ongoing maintenance and measurement of an organization’s performance reports.

Whether drawing on Ceres, the Global Reporting Initiative or a more basic ESG reporting structure, CRE holds a growing responsibility in many key indicators addressing the built environment. CRE leaders often assume that these indicators are addressed in green-building rating systems such as LEED, BREEAM or Estidama. In fact, these frameworks fail to address a num-ber of the broader indicators such as employee transport, employee health/well-being and community involve-ment. Herein is the opportunity. If CRE seeks a stronger position in overall organizational decision making and strategy, CRE simply must engage CSR proactively in co-creating strategies that support occupancy while meeting over-all CSR performance goals. This reduces risks while improving performance.

ronmental, social and governance (ESG) factors to company performance. When assessing organizations that had social responsibility as a part of their business plans, analysts Bloomberg and Jantzi-Sustainalytics also linked CSR to a clear pattern of improved performance and reduced risks.

This attention in the marketplace may have a direct impact the value of a company’s stock. With an immediate strategy position to consider, organi-zations are shifting their attention to CSR and its value proposition. It’s more than reporting; corporate leaders now seek alignment throughout their com-panies to ensure that reporting is not de-facto but instead focused on perfor-mance targets that contribute to indus-try evaluation. This shift increases pressure on CRE decision-making. As a result, CRE leaders are now tapped to contribute to the overall CSR posi-tion of an organization, including the

Meeting the needs of the companies we support in an envi-ronmentally sustain-able way is a key

goal for corporate real estate (CRE), but it is much more than striving for LEED certification. Sustainability is a part of a larger corporate social responsibil-ity (CSR) agenda that is increasingly shaping decisions at many companies. Recent studies have shown that when CSR was an integral part of business planning, companies performed better and reduced their risk profiles, and this performance bump now has the atten-tion of investors and customers. But what is CSR and how is it measured and reported? And most importantly, what role do CRE professionals play?

CSR gained significant market pres-ence when investors, non-profits and networks, such as the UN Principles for Responsible Investment, connected envi-

Creating inspirational workplaces that enhance productivity and deliver bottom line results

Companies with an eye to the future search for workplace solutions that not only address multiple challenges, but also deliver tangible results.

Nokia China and Sodexo formed a strategic partnership with the goal of designing a workplace that positioned Nokia as a best-in-class employer. To achieve this goal, Sodexo created an innovative service architecture that enhanced collaboration, drove employee retention, and increased overall workplace satisfaction.

Our service architecture delivers solutions that foster teamwork through innovative workspace design and service delivery. Further, the seamless incorporation of business and retail centers drive productivity and balance the disparate needs of work and home. These solutions are holistically improving the quality of daily life for the Nokia employee.

With the rapidly changing face of today’s workplace, including an unprecedented multi-generational mix of employees, Sodexo remains agile in its approach to addressing Nokia’s strategic imperatives. Using our exclusive Personix™ methodology, we are able to create solutions that are aligned with end user expectations.

Efficiencies continue to produce year over year savings. Satisfaction and productivity remain high.

Sodexo provides comprehensive and integrated solutions that align workplace strategy with your core business principles to create an exemplary work-life experience for your employees... improving your company’s bottom line.

Making space

for innovation

Visit www.tolive.com to learn more about how we can help you create a workplace designed for the future of your company. Call 888.Sodexo7 or e-mail us at [email protected].

© Sodexo 2011

Sodexo_CoreNet-Leader_Aug-Sept11g.indd 1 7/26/11 4:43 PM

Creating inspirational workplaces that enhance productivity and deliver bottom line results

Companies with an eye to the future search for workplace solutions that not only address multiple challenges, but also deliver tangible results.

Nokia China and Sodexo formed a strategic partnership with the goal of designing a workplace that positioned Nokia as a best-in-class employer. To achieve this goal, Sodexo created an innovative service architecture that enhanced collaboration, drove employee retention, and increased overall workplace satisfaction.

Our service architecture delivers solutions that foster teamwork through innovative workspace design and service delivery. Further, the seamless incorporation of business and retail centers drive productivity and balance the disparate needs of work and home. These solutions are holistically improving the quality of daily life for the Nokia employee.

With the rapidly changing face of today’s workplace, including an unprecedented multi-generational mix of employees, Sodexo remains agile in its approach to addressing Nokia’s strategic imperatives. Using our exclusive Personix™ methodology, we are able to create solutions that are aligned with end user expectations.

Efficiencies continue to produce year over year savings. Satisfaction and productivity remain high.

Sodexo provides comprehensive and integrated solutions that align workplace strategy with your core business principles to create an exemplary work-life experience for your employees... improving your company’s bottom line.

Making space

for innovation

Visit www.tolive.com to learn more about how we can help you create a workplace designed for the future of your company. Call 888.Sodexo7 or e-mail us at [email protected].

© Sodexo 2011

Sodexo_CoreNet-Leader_Aug-Sept11g.indd 1 7/26/11 4:43 PM

Building the Bridge: Positioning real estate for the new CorPorate MetriCs

2011 the leader 32 s e P t e M B e r / o C t o B e r

be measured, reported and potentially influence corporate decision making.

CSR Reporting Components1. Employee Transport. This refers to how employees get to and from work and any commutes among facilities within the company or to client sites. While many organizations do monitor and report on transport, none of the top CSR reports published in 2010 specifi-cally identified employee transport as an area of positive practice. Mobility programs, trip reduction programs and flex work schedules all contribute to a reduced environmental load from employee transport.

Commonly used metrics make it relatively straightforward to report on reductions in transport impact, but in fact few organizations actually do so. In a recent example, GSA attempted to define the carbon footprint reduc-tion from its pilot mobility programs. Key metrics included carbon tons reduced from employee commutes and

able practices, CRE’s influence in an organization’s strategy grows. To create a meaningful CSR report, an organiza-tion must engage stakeholders (i.e. customers, employees, investors) in a process to identify the critical links between its activities and its impacts.

The key is to link CSR reporting with the activities CRE influences. Critical to this is the creation of a common language for CRE/CSR that provides new insights into ways of measuring impact as related to com-pany performance. As a way of under-standing these implications, consider the CSR levers that are controlled or influenced through the practical and familiar CRE lens of mobility/alternative workplace strategy (AWS). Although the number of mobility pro-grams has grown significantly in recent years, it is rare to see the connection made between mobility and CSR. Specifically, three CSR components: employee transport, health/wellbe-ing and community involvement can

How Does CRE Increase Influence in CSR? Traditionally, CRE executives have focused on drivers such as asset value and tenant satisfaction. As CRE execu-tives begin to understand the broader implications of enterprise-level sustain-

what is a gri?

Many are joining the conversation using

the global reporting initiative (gri)

framework. the gri is a network-based

organization that pioneered the world’s

most widely used sustainability report-

ing framework. its reporting framework

sets out the principles and performance

indicators that organizations can use

to measure and report their economic,

environmental and social performance.

as the world’s most widely used

framework, the gri increasingly dem-

onstrates a stronghold on the market

share of those reporting.

of a day. Finally, because of challeng-ing weather and unexpected transpor-tation delays, employees sometimes struggle to make it to the office at all. AWS offers employees the ability to work remotely, reducing the stress of attempting commutes when these chal-lenges interfere. CRE could easily work in collaboration with human resources to identify commuter stressors, rates of absenteeism and increased resilience as part of the reporting process.

3. Community Involvement. This addresses programs that assess and manage the impacts of operations on communities, including entering, oper-ating in and exiting. Typically, CRE does not report on community involve-ment/volunteerism, but AWS offers the opportunity to do so. CRE again could use the reporting for vehicle miles traveled as a means to describe reduced travel and the positive impact of reduced emissions in communities.

As CRE typically conducts employee location studies to evaluate site loca-tions, these same studies could be leveraged to confirm reduced vehicle miles traveled aligned with AWS par-ticipation rates by community. These impacts provide a positive net effect across many CSR components and in turn offer an extended material issue

further reductions from building opera-tions. (See GSA PBC White Paper 4, Leveraging Mobility, Managing Place.)

CRE has the opportunity to directly connect its advocacy of AWS to the employee transport component. In doing so, CRE could easily report on reductions in vehicle miles traveled. As a result of AWS participation, CRE could further report on avoidances in terms of new tenant build outs or new construction. These, in turn, result in less waste and less resource use. Given the prevalence of AWS programs in many organizations and their increas-ing enrollments, this is an easy and obvious area of influence that offers both short- and long-term returns.

2. Health/Well-Being. This refers to both employees’ ability to balance stressors in work and life and reduce absenteeism because of the flexibility inherent in mobile work. This is truly a transformational story to share. Again, through AWS, CRE offers employees reductions in commute time per year, a direct stressor reflected in com-muter stress measures. Reductions in absenteeism tied to unexpected family events are often remedied through the ability to support remote work. So in lieu of losing an entire day, employees are enabled to work at least a portion

Mobility Contribution to CSR Reporting - 6/29/11

Employee Transport Health/Well being Community Involvement

ESG Component Environmental Reporting Labor Practices & Product Responsibility Society

Area of Influence Howemployeesgettoandfromworkandamong

facilitieswithinthecompany

Thedegreetowhichemployeesareenabledtobalancetheir

workandpersonallives,reducedabsenteeism,business

continuity

Practicesthatassessandmanagetheimpactsofoperationson

communities,includingentering,operatingandexiting;thedegreeto

whichemployeesareabletoprovidetimeandenergytosocialprojects

outsideofwork

Mobility Program Impact Mobilityprograms1)enableworkfromhomethat

eliminatescommutesentirelyonetofivedaysaweek,2)

offerflexiblehoursthatenabletravelatlesscongested

timesoftheday,shorteningcommutes,3)reduce

constructiondemand.

Mobilityprograms1)provideflexiblehourstoallowemployees

tomakechoicesaboutwhentheywork,enablingthemtomake

choicestomoreeffectivelybalancetheirworkandpersonallives

and2)enableemployeestoworkremotelywhenweatheror

transportinterruptscommutes.

Mobilityprograms1)reducevehicularemissionsfromcommuting,2)

enableemployeeswhosavetimeoncommutingtochoosetodedicate

someofthattimetosocialprojects,3)useflexiblehourstodedicate

timetosocialprojectsduringtraditionalworkhoursandcompletework

assignmentsduringnon‐traditionaltimes.

Metrics Used Now Vehiclemilestraveled(NOX,VOCs,CO2),CO2grams/mile,

SF/personrequired,operationscosts/SF,windshieldtime,

cost/persontelecommuting,parkingspace/SF

Commutecostsperyear(hoursand$),absenteeismdays/hours,

resilience/lostdays,commuterstressmeasures

Vehiclemilestraveled(NOX,VOCs,CO2),CO2grams/mile,volunteer

hours

CRE should Report to CSR 1)Thenumberandlengthoftripsthatarebeing

shortenedoreliminated,2)thereductioninnumberof

milestraveledbymonth,3)theconstructionavoided

Employeesatisfactionsurveyresponsesmeasuringtheimpactof

1)mobileworkandflexiblehours,2)absenteeism,3)lostdays,

4)commuterstress

1)Thenumberandlengthoftripsthatarebeingshortenedor

eliminated,2)employeeinvolvementincommunityprogramsand

relationshiptomobilityandflexiblework.

CSR Reports and Mobility MostESGreportsdonotaddressemployeemobility

programsintermsofCO2reductions,reduced

constructionrequirementsorlosttimebecauseoftravel.

MostESGreportsdonotaddresslaborpracticesandproduct

responsibilityrelatedtomobilityorissuesofresilienceincaseof

stormsorothertransportrisks.Thesereportsalsodonotreflect

recruitment/retentiontiedtoemployeesatisfactionandoverall

healthaspectsofmobility.

MostESGreportsdonotaddressemployeetravelemissionsor

volunteerism.

Message CRE Needs to Send to

CSR

Mobilityprograms1)reducevehicularemissionsfrom

commuting,2)enhanceothercompanysustainability

effortsandreporting,3)areleveragedinexternal

marketing/messaging,4)canbeusedasaboostto

recruitmentandretention,5)reduceconstruction

demand.

Mobilityprograms1)reducecommute‐relatedstressin

employees,2)reducevehicularemissionsfromcommuting,3)

enableemployeestobetterbalancetheirworkandpersonal

livesbymakingchoicesabouthow,whenandwheretheycan

contributeandbeproductive,thusreducingjob‐relatedstress,

4)bolsterbusinesscontinuityplans.

Mobilityprograms1)reducevehicularemissionsfromcommutingand

2)providescheduleflexibilitytoallowemployeestocontributetimeto

theircommunityduringhoursthatmakesense.

Building the BRidge: PoSitioning Real eState foR the new CoRPoRate MetRiCS

2011 the leadeR 33 S e P t e M B e R / o C t o B e R

what iS a CSR RePoRt?

a Corporate Social Responsibility

(CSR) report is an increasingly

integral component of an organiza-

tion’s relationship with its stakehold-

ers. a common definition of a CSR

report or an integrated report is a

form of value reporting where an

organization publicly communicates

its economic, environmental and

social performance. organizations

report for several reasons, includ-

ing marketplace pressure, brand

value and risk management. Some

organizations create reports based

on internally developed indicators,

and others rely on third-party frame-

works, such as gRi. in a joint report

by Craib design & Communication

and Pricewaterhouse Coopers llP

– CSR trends 2010: Staking up the

Results – the authors note that “[CSR

reports], addressing issues that once

took a back seat to financial results –

if they had a seat at all – has become

critical to a company’s credibility,

transparency and endurance.” this

is not a fringe interest. in fact, 81

percent of all companies have CSR

information on their websites.

Building the Bridge: Positioning real estate for the new CorPorate MetriCs

2011 the leader 34 s e P t e M B e r / o C t o B e r

for commuting for a number of small mobility projects throughout its portfolio. These metrics roll into the company-wide sustainability reporting that is leveraged largely for marketing purposes. The competitive financial environment in Canada magnifies the impact of slight marketing advan-tages, and the bank is keen to leverage these as much as possible to 1) drive increased market share and 2) attract and hire a younger demographic.

Other leading companies like Cisco, Oracle, HP and the U.S. General Services Administration have re-cast their telecommuting/mobility pro-grams to include a greater emphasis on sustainability and are beginning to col-lect data to support these CSR metrics.

Linking the impact of CRE-driven mobility/AWS programs to CSR goals benefits both initiatives. This is an emerging bridge that CRE profes-sionals need to help build through accurately capturing the right data and vigorously engaging those at their company who are responsible for CSR. CRE leaders in a few organizations in North America are actively build-ing this bridge to the benefit of the company’s external perception and increased emphasis and resourcing of their mobility programs. By being ahead of this curve – possibly driving it – CRE professionals can continu-ally elevate their good work toward strategy (vs. tactical), bolster their own mobility/AWS efforts and create stronger strategic partnerships within their organizations.

of an organization’s impact in the com-munities in which its employees reside (See Figure 1).

Lessons from Leading CompaniesA survey by AT&T of their 12,000+ tele-commuters showed that the company’s mobility program contributed signifi-cantly and positively to achieving the three CSR measures outlined previously. Regarding health and well being, 92 per-cent of respondents said telecommuting helps them achieve a healthy work/life balance, and 63 percent reported that they worked a more flexible schedule on the days they telecommuted. With average round-trip commute times at 54 minutes, 94 percent of the employ-ees who telecommute said they used some of that saved time for personal/family activities and gave some of it back to AT&T as additional productive time. Regarding employee transport and community involvement, AT&T uses a detailed set of measures including car type, carpooling status, commute length, number of days working from home, etc., to determine that their telecommuting program avoided 175 million commute miles per year, with annual fuel savings of approximately 8 million gallons and a net reduction of 76,273 metric tons of CO2-equivalents emissions per year.

In another example, a major Canadian financial institution links its telecommuting/mobility program to their corporate sustainability pro-gram to the advantage of both. The bank currently estimates reductions in carbon emissions and fuel used


CSR and the Cityhttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=10959954

Employee Commuting - Capturing and Reporting Greenhouse Gas Emissionshttp://www2.corenet-global.org/dotCMS/kcoAsset?assetInode=11221492

about the authors

Janice Barnes is the Global Discipline Leader for Planning + Strategies at Perkins+Will. She leads organizations in developing and align-

ing workplace strategy to better support business goals and sustainable practices.

Carolyn Roose, LEED Green Associate, is a Planning + Strategies consultant at Perkins+Will, where she plays an active role in the firm’s Sustainable Advisory Services.

Keith Perske is the Mobility Practice Leader at eBusiness Strategies, where he and a team of seasoned professionals help orga-nizations align their

workplace designs, technology and work practices with the way people work now.

“sustainability is a part of a larger

corporate social responsibility (Csr) agenda

that is increasingly shaping decisions at

many companies.”

SOCIETY OF INDUSTRIAL AND OFFICE REALTORS

www.sior.com202-449-8200

The most experienced and qualified professionals.

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in Brokerage Performance

**9445 SIOR-1100 gold 7x10 1/24/11 12:02 PM Page 1


The Evolution of Business Continuity And Risk Management:

What Are the Implications for Corporate Occupiers?

B Y J I M R O s E n B l U t H

2011 tHE lEadER 36 s E p t E M B E R / O c t O B E R

the primary system. In the data center world, this became known as N+1 and N+2 redundancy. This move from disaster recovery to system resilience was a major step in the evolutionary process.

The Game ChangerThe September 11, 2001, terrorist attacks on the United States proved a watershed event in the evolution of BC and propelled it far beyond the realm of IT and into every facet of corporate operations. When global financial services firms were forced to sus-pend operations in New York’s financial district following the attacks, companies quickly realized that their ability to operate during exigent circumstances depended on far more than ensuring resilient IT infra-structure. They became painfully aware that they were dependent on: Availability of their work force Availability of capital Viability of their vendors Ability to communicate (to cli-

ents, employees, vendors, the public and government)

uninterrupted availability and operation of IT systems and telecommunications networks became increasingly vital as com-puters grew faster and world commerce became more interconnected. Whereas in the 1970s and 80s companies set availabil-ity rates for technical systems of “two 9s” (99.x percent availability), rates of three and four 9s became the desired goal as inter-national commerce and finance became increasingly dependent on these systems. Today’s Tier 4 data centers, the most resil-ient and fully redundant facilities, operate at availability rates of 99.995 percent. In other words, there is a 0.005 percent prob-ability that adverse circumstances will interrupt the operation of the facility.

This greater reliance on automation required that systems be designed to be as failure free as possible and that all of their critical components and support-ing systems be backed up by at least one fully operational system to automati-cally take over in the event the primary failed. For especially critical systems, two completely redundant systems back up

Business continuity has evolved from an IT-centric process to a holistic risk man-agement paradigm to ensure the continued operational

or commercial viability of corporations, institutions and government agencies alike. No longer the sole purview of IT managers and technicians, business conti-nuity (BC) has migrated into the C-suites of the world’s largest corporations and from there has filtered down through all aspects of corporate activity. It encom-passes everything from IT systems, HR, R&D and production processes to finance, marketing and corporate reputation. In that all of these activities are conducted in corporate real property assets, the evolu-tion of BC has enormous implications for corporate real estate (CRE) managers.

The IT Roots of Business ContinuityIt is useful to trace the evolution of busi-ness continuity from an IT concept to a key tenet of good corporate governance. The

dent such as occurred at the Fukushima Daichi nuclear power plant in Japan.

Key Components of a CRE BC PlanThe unique circumstances of the prop-erty – the surrounding risk environment, the business functions performed on site and the characteristics of the prop-erty – dictate the content of the BC plan. Four basic documents can capture all of the necessary protocols and procedures: an Emergency Response Plan (ERP); an

Emergency Communications Plan (ECP); an Emergency Operations Manual; and a Mission-Critical Inventory or Business Impact Analysis.

The ERP explains the roles, responsibilities and procedures to be followed during all emer-gency situations that could affect the property. It should include materials for tenants and visitors as well as for prop-erty management personnel (security, engineering, office staff, etc.) and cover the full range of scenarios assessed to potentially affect the site. At a minimum it must include all response measures required by local code but should go beyond those requirements to include all potential emergen-cies confronting the property.

In addition to tenant emer-gency response instructions, the ERP should include step-by-step instructions for all property personnel on what to do in situations that may not directly imperil tenants but that are of priority concern to

building operations. These might include such emergencies as loss of commercial power, telecommunications connectivity or other essential utilities; loss of heat-ing ventilation and air conditioning sys-tems; failure of the automated Building Management System; bomb threats; ele-vator entrapments; medical emergencies; unauthorized entry into the property; protests; etc.

The ECP provides emergency contact information for all persons associated with the property, including emergency services and first responders, staff, ownership, key

ness and disaster recovery. At the most basic level, a BC plan is designed to pro-tect the property’s ability to remain open, accessible to its occupants and functional regardless of any adverse situation.

BC today operates on an “all-hazards” basis – the plan must be able to respond effectively to any type of natural disaster, technological failure or man-made incident that could disrupt operations at the prop-erty. This requires a comprehensive assess-ment of the physical environment in which

the property is located to identify potential natural-hazard risks that typically fall into three categories: geological, meteorological and biological, including infectious disease and epidemic/pandemic hazards.

But technological failures such as the prolonged loss of commercial power, tele-communications connectivity or critical utilities must be considered, as should man-made incidents such as fire, hazard-ous material release inside or outside the property, transportation accidents affecting the property, crime, terrorism, civil unrest, workplace violence or even a nuclear acci-

Access to their CREIn short, the loss of any of these critical

elements potentially poses an existential risk to the firm.

Today, 10 years after the 9/11 attacks, the generally accepted definition of busi-ness continuity is: the process by which companies mitigate, to the greatest extent possible, unacceptable risks to their com-mercial viability, taking all reasonable and prudent measures to ensure that the company’s critical operations will continue to function throughout any emergency and, in the unlikely event that they are unable to do so, that they can be restored to operational capacity as quickly and seamlessly as possible.

What Does Business Continuity Mean in the Context of CRE?Any piece of CRE, whether a single-tenant office building or a small office suite in a multi-tenant building, an R&D lab, warehouse or stand-alone data center, may be mission criti-cal depending on the business operations conducted or per-sonnel housed at the site. If the operational availability of the property is impaired or if access to it is denied, the company’s commercial viability may be at risk. Not all properties are mis-sion critical, so one must have a clear understanding of which are essential to a company’s operations and which are not.

Business continuity as it applies to CRE is an opera-tional philosophy based on two principles: Unacceptable risks to a property’s

operational availability during a variety of adverse situations must be identified and, if possible, mitigated. Plans, procedures and protocols must

be established to enable the property man-agement team to react immediately and effectively to any emergency situation to ensure the continued operational avail-ability of the property and, in a worst case scenario, to bring the property back to operational status as soon as possible.

This translates to emergency prepared-


Doing

Wha

tItTakes

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The evoluTion of Business ConTinuiTy And Risk MAnAgeMenT: WhAT ARe The iMpliCATions foR CoRpoRATe oCCupieRs?

2011 The leAdeR 38 s e p T e M B e R / o C T o B e R

employees with similar skills and experi-ence for cross-training so they can fill in for the incumbent in the event he or she is incapacitated. This ensures resilience across all property operations.

Most large corporations have well-developed business continuity programs that encompass CRE, but some may not. CRE managers should ensure that their assets are integrated into the corporate BC plan if one exists. In the absence of one, they should develop their own BC plan to ensure that the company’s mission-critical real property assets remain operational and available during adverse circum-stances. For those who rely on third par-ties to manage their real property assets, their real estate services provider should be able to help them develop a detailed BC plan that is tailored to the company’s busi-ness model and property portfolio.

schematics, HVAC system configurations in the event of hazmat releases and loca-tion and inventory of hazardous materials at the property.

The final essential piece is a Mission-Critical Inventory, an assessment of which property operations are essential to keep the building open, accessible and functioning and those that can be suspended or provided at a reduced level for a period of time before they begin to impact overall operations. The Mission-Critical Inventory, also known as a Business Impact Analysis, enables you to set Recovery Time Objectives (RTOs) for each function, indicating when you must restore or resume that operation. RTOs can range from a couple of hours to days or weeks and serve as a valuable guide in prioritizing your recovery efforts. They also enables you to identify those employees responsible for performing the mission-critical functions and to designate

vendors, as well as service providers, ten-ants and insurers. It should include mul-tiple means of contact, including office and cell telephone numbers, professional and personal email accounts, pagers, etc., in the event that some communications systems are inoperable. An incident-specific crisis communications tree should indicate who should be contacted, in what order and what information they should be provided or should be obtained from them for each emergency scenario in the ERP.

The Emergency Operations Manual focuses on engineering procedures and should provide a competent engineer who is unfamiliar with the property the basic information necessary to shut down and restart plant operations in the event the engineering staff is incapacitated or unavailable. Among other things, it should include utility shutoff locations, building systems shutdown and restart sequences, BMS remote access procedures, system


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figure 1: Corporate Real estate Business Continuity plan

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Corporate Real Estate Best Practices: A Methodology to Effectively

Benchmark Performance

B Y D a V I D M U s I C , a l a n n a g E R a n D a n n t U C K E R

2011 thE lEaDER 40 s E p t E M B E R / o C t o B E R

marking is defining what to measure. Because external benchmarking is broad in nature, external metrics tend to become overly simplistic and therefore difficult to draw conclusions from. In our experience, best-in-class measure-ment systems are not shared in the public forum or general surveys because they are specific to the operational goals and objectives of an individual company or industry vertical.

The best benchmarking processes and measurement systems integrate the sup-ply of space with the demand for space. Supply is typically well documented by the real estate organization with metrics focused on cost, amount of space per per-son or seat and vacancy.

Demand data is operational in nature. Many organizations view revenue growth; labor quantity, quality and cost; and external customer service as primary business concerns and often

data want to understand and justify why their organization does not align with “industry standards” or “best practices,” but most of the time, comparisons from these external studies are not apples-to-apples. Meaningful benchmarks must look at similar datasets, not just from an industry perspective, but also from a geographical, functional and facility-type viewpoint. Benchmarking square feet (SF) per person seems acceptable on the surface until you realize the data contains corporate office space in New York, shared services in Dallas and a call center in Sioux Falls. In addition, as we adopt new ways of working that impact more than just real estate, alternative work environments and occupancy mod-els significantly influence traditional benchmark standards.

Identifying Key MetricsThe starting point for meaningful bench-

Benchmarking is a core activ-ity for most real estate organizations. To improve performance, external benchmarking studies are

often initiated to identify areas of oppor-tunity related to cost and quality of ser-vice, as well as to gauge how effectively a portfolio is managed. Organizations such as CoreNet Global, IFMA and BOMA, among others, have created stan-dards for consistency of external report-ing and benchmarking to aid occupiers in analyzing their own portfolios.

While well-intentioned, the unfortu-nate reality is that external benchmark information rarely provides information that is detailed and specific enough for performance comparisons and guidance on improvement. Moreover, the issue with typical external benchmarking studies is that context is generally lack-ing. Managers looking at benchmark

should have different requirements in technology, security, workplace utiliza-tion, quality and location of space, and collaborate requirements within and outside their departments. Therefore, comparison should be focused on similar organizational functions. Facility Type. Supply-oriented met-

rics are valid only within a facility type assuming that geographic differences can be filtered. For example, retail space, call centers, distribution cen-ters and data centers can be compared only within their own facility type. However, many facilities are mixed-use (for example, regional branch office and distribution center or corporate office with a customer service call center), which can make accurate benchmark-ing problematic.

This separation of metrics allows for valid comparisons but also raises a fundamental question: Where can one obtain valid external data? Where busi-ness function, organization and facility type overlap, data is sometimes available

Revenue per square foot or total occu-pancy cost per unit are valid business-to-business benchmarks because they account for strategic decisions, such as business process insource vs. outsource, creation of shared services, investment in efficient facilities, alternative work-space, etc. Organizational (Departmental)

Functions. These metrics compare individual groups, such as accounting, software development, engineering, customer service, sales, etc., within an organization. As companies are look-ing to improve efficiencies, lower costs and retain a skilled work force, it is important to look at how independent functions within a larger organiza-tion perform and measure against best practices for like functions within the company (usually in different loca-tions) and with competitors. These best practices include not only office and workstation size but also headcount and cost to perform their service. Specific to space itself, each of these functions

exclude real estate metrics. The opera-tional metric that impacts real estate the most is planned and actual occupancy (employees, visitors, contractors, etc.). High swings in occupancy create the need for increased flexibility in the sup-ply of space and impact supply-oriented metrics like target vacancy and cost per person. To accurately benchmark perfor-mance, we need to measure our corpo-rate real estate (CRE) function relative to similar demand-side requirements.

Performance BenchmarksTo begin, we recommend separating metrics into three categories before benchmarking performance. This allows us to take demand-side variability into account. The categories are: Business Function. These metrics

are comparable among businesses that produce similar goods and services. Ratios, including demand metrics such as revenue and production volume, can be correlated to supply metrics, such as total occupancy cost and total space.


As we further develop the benchmarking services available to CoreNet Global members, we have partnered with FM BENCHMARKING, offering discounts up to 40% for our members, to provide comparisons of similar buildings using filters to select the characteristics of the facility you want to compare. Through FM BENCHMARKING members can compare building metrics and benchmark best practices to improve building performance.

For more information please contact: Melissa Securda Director, Knowledge and Research, CoreNet Global Off ice: +1.404.589.3252

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Corporate real estate Best praCtiCes: a Methodology to effeCtively BenChMark perforManCe

2011 the leader 42 s e p t e M B e r / o C t o B e r

Internal BenchmarksWhether or not external benchmarks are valid, we recommend focusing benchmarking activities first within the enterprise. In our experience, this form of benchmarking produces far greater results because data is more read-ily available and results can be more thoroughly analyzed, understood and adjusted for variations in demand. There are two types of internal benchmarks that should be produced: First, benchmark the trend of a

single facility over time. This is a straightforward task of understand-ing how or if a facility is improving. Typical metrics such as cost per SF, SF per person or seat, utilization and vacancy can provide valuable insight into how a facility is being man-aged relative to demand for goods and services placed on that facility. More importantly, the percentage of

ing into account differences by function, facility type and geography, how can it conceivably compare itself to competi-tors or industry standards?

Understanding the limits of the inter-nal datasets is a critical step in analyz-ing and benchmarking the organization. Many businesses have a good grasp on their physical real estate assets in total: SF by region, total costs, number of buildings owned vs. leased, building location and type, etc. However, opera-tional information, especially in decen-tralized portfolios, is often non-existent, insufficient or is maintained by the busi-ness units and has not been aggregated. Accurate headcount by facility and func-tion, operating costs by spend category, space utilization and vacancy rates are critical to improvement. There are many low-cost and effective business processes and technologies available to collect and aggregate this data.

from industry groups and trade organi-zations. Retailers, law and accounting firms, automotive manufacturing plants, software R&D groups and other similar function and facility sets are regularly benchmarked within their peer groups. Benchmark metrics such as revenue per SF, attorneys per SF, facility cost per unit produced and cost per call produce meaningful results that link supply and demand. This list, however, covers only a fraction of the assets managed by real estate departments.

The Need for DataIt is important to emphasize the impact of accurate data on the ability of an organization to track metrics and benchmark. Without the right data, it is impossible to begin down the road to full-scale benchmarking that is previ-ously described. If an enterprise cannot accurately measure itself over time, tak-

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Corporate real estate Best praCtiCes: a Methodology to effeCtively BenChMark perforManCe

2011 the leader 44 s e p t e M B e r / o C t o B e r

nies) are valid data points and serve two purposes. First, as noted previ-ously, they normalize data across geographies. This is valuable for cost metrics such as rents, labor, energy and construction. It is more important to know whether an office in Chicago is above or below what is market value in Chicago than it is to know if Chicago is paying more than Richmond. Second, geographic and market bench-marks provide opportunities for improvement when supply-side market information can be integrated with demand-side analysis. This may pro-vide companies the ability to reduce space and/or cost when metrics can be integrated with real estate strategy.

Benchmarks are applicable for any given enterprise, but comparisons are only valid where business unit and function, facility types and geographies align. Benchmarking begins with well-defined metrics (what is important to measure) using accurate supply and demand data. The most effective place to start is tracking how a single facility performs over time. Internal benchmarking across like facilities and, finally, valid external benchmarking within an industry and facility type are logical extensions of organizing enter-prise information around valid metrics.

improvement offers a meaningful mea-sure to normalize differences in facili-ties costs, geography and other factors that skew benchmarking. Second, benchmark equivalent

facility types or functions within a business unit. Similar to external benchmarking, internal benchmark-ing within the company is not valid across different business units. For a bank, consumer retail branches cannot be compared to commercial office and operations centers. Again, the tradi-tional CRE metrics are generally valid within a facility type. Space per person or seat, space per unit of volume, etc., should be compared and contrasted. Where geographic differences apply, the values for labor cost, rental rates, etc., can easily be adjusted. For example, rental cost per SF in New York will be higher than Atlanta for comparable mid-town office space. However, under-standing the market rates between the two cities can allow the cost for New York space to be adjusted down for valid benchmarking.

Geographic and Market BenchmarksExternal benchmarks that compare facility performance to the market in general (as opposed to other compa-


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about the authors

Alan Nager is the Executive Managing Director of Newmark Knight Frank’s Global Corporate Services con-sulting and technology team. He specializes in

facility master planning, workflow and business process improvement, work-place strategy and financial analyses.

Ann Tucker is a Founding Member of Newmark Knight Frank’s Global Corporate Services con-sulting team. Her focus is integrated operations

and portfolio strategy, specializing in developing portfolio business solutions from strategy to implementation.

David Music is a Managing Director in Newmark Knight Frank’s Global Corporate Services consulting team. He specializes in using

business intelligence to better under-stand operational processes, facility master planning and developing location strategies for global organizations.

Chart 2: Rental Rate vs. Market Comparable in the Americas (By Rate Differential)

knowifChicagoispayingmorethanRichmond.Second,geographicand

marketbenchmarksprovideopportunitiesforimprovementwhensupply‐

sidemarketinformationcanbeintegratedwithdemand‐sideanalysis.This

mayprovidecompaniestheabilitytoreducespaceand/orcostwhen

metricscanbeintegratedwithrealestatestrategy.

RentalRatevs.MarketComparable

Americas(ByRateDifferential)

Benchmarksareapplicableforanygivenenterprise,butcomparisonsare

onlyvalidwherebusinessunitandfunction,facilitytypesandgeographies

align.Benchmarkingbeginswithwell‐definedmetrics(whatisimportantto

measure)usingaccuratesupplyanddemanddata.Themosteffectiveplace

tostartistrackinghowasinglefacilityperformsovertime.Internal

benchmarkingacrosslikefacilitiesand,finally,validexternalbenchmarking

withinanindustryandfacilitytypearelogicalextensionsoforganizing

enterpriseinformationaroundvalidmetrics.

About the Authors

AlanNager istheExecutiveManagingDirectorofNewmarkKnightFrank’s

GlobalCorporateServicesconsultingandtechnologyteam.Hespecializesin

facility master planning, workflow and business process improvement,

workplacestrategyandfinancialanalyses.

Ann Tucker is a Founding Member of Newmark Knight Frank’s Global

CorporateServicesconsultingteam.Herfocusisintegratedoperationsand

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Building the Foundation: A Successful Client/Provider

Relationship

B Y C H R I s C O O P E R

2011 tHE lEadER 46 s E P t E M B E R / O C t O B E R

is important to understand the CRE outsourcing evolution over the past decade. Historically, corporates pur-chased real estate services through a Service Provider model, whereby the vendor provided a discrete, contract-based service (such as transactions, lease administration or project man-agement) on an as-needed basis. The CRE market then became more sophis-ticated and realized that through a Preferred Provider model, corporates could outsource one or more repetitive services based on more favorable con-tract terms to one of several preferred providers. As account relationships became more complex and required integrated global coverage, service pro-viders made larger investments into their globally integrated platforms.

ship with their provider; one that can deliver a fully integrated, on-site team that espouses the same corporate culture; shares the same or similar monetary and professional goals; and operates under a governance model of collaboration, accountability and trust.

Today, the CRE outsourced partner has become the provider of turnkey or one-stop-shop CRE services. This further pushes the definition of “fully-integrated outsourced partner” to the point where many large corporates have asked the provider to hold third-party contracts – such as facilities manage-ment and general contractor agree-ments – as principals, resulting in a mutual and competitive advantage of sharing risks and rewards.

But, stepping back for a moment, it

Today’s corporate real estate (CRE) outsourcing model is very different than what we saw 10 to 15 years ago. (See Industry

Tracker, page 84.) Simply put, it was a much simpler model. Corporate cli-ents back then were looking for cover-age, technology, pricing and depth. Today, the CRE outsourced partner has become a fully integrated extension of CRE department, sharing not only roles and responsibilities, but corporate culture, office space, 360 reviews and mutual goals as well.

To that end, CRE executives are looking well beyond the delivery of bundled services around the globe. Rather, they are fashioning a strate-gic alliance relationship or partner-

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Building the Foundation: a SucceSSFul client/Provider relationShiP

2011 the leader 48 S e P t e m B e r / o c t o B e r

tives. Each corporate account possesses its own unique challenges and pains. Whether it is speed to market, attraction and retention of talent, growth, contrac-tion, efficiencies, unions, geopolitical challenges, access to capital, M&A or driving shareholder value, the account

team, structure, approach and strategy must be aligned with those unique challenges and pains. To that end, the partnership of cli-ent, consultant and provider must take a design-build approach.

Each client organi-zation is unique with unique attributes requiring a service provider that is able to affect change in a positive and col-laborative manner, while working within the constraints of the company’s corporate governance, industry and culture. Taking a zero-based approach using real estate solu-tions to solve business challenges fosters the much-needed partner-ship or collaborative strategy to bring the desired value to the client’s initiatives. I have often suggested that the first order of business for any real estate services provider is to read the CEO’s or Chairman’s letter to shareholders. There you will typically find the executive’s three primary objectives. You now have the road map to success!

Secondly, there must be behavior alignment. The client and provider should jointly establish a performance-based compensation model that ties compensation directly back to perfor-

so-called truism is that one size does not fit all. Seems pretty basic, how-ever, we continue to see the “canned” RFP and, even worse, the “tried and true” RFP response. Not to be out-done, the bidder’s conference ques-tions, the yellow-pad sessions and the

presentations are indiscernible among the providers and clients alike. Client requirements are increasingly more complex and are tied to the C-suite’s overall corporate goals and objec-

They requested an Exclusive Provider relationship to deliver one or more repetitive services, thereby excluding other providers and creating an annuity income stream.

Veterans of this third-party outsourc-ing evolution are today’s war heroes of the incessant focus on pricing, key per-formance indicators (KPIs), metrics and voluminous RFPs – much of which had little or no relation-ship to the client’s challenges, goals and objectives. It’s as if – notwithstanding state-of-the-art integrated global platforms, technology, seasoned veterans, unique strat-egies and global cover-age – the outsourcing process has turned a blind eye on the cli-ent’s pain and reason for outsourcing. No wonder many account relationships end like a bad marriage.

Where Lies the Disconnect? Are we all destined to corporate account management therapy? The test of time has proven that while it is essential to understand your client’s business drivers and overall corporate strategy, it is equally important to establish, grow and maintain a strong personal relationship with your client. To that end, there are two “truisms” that stand as the foundation to a successful client-provider marriage, both of which are often overlooked by the client and pro-vider alike.

1. Design-Build Approach. The first

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mance through predetermined KPIs. While most providers have a standard bank of KPIs, the best way to develop effective and valuable KPIs is through collabora-tion with the client. To be effective, a KPI must be tied directly to the real estate goals and environment of the client.

Lastly, as outsourced service providers take on more responsibil-ity from their clients, the design-build pro-cess becomes more of a change manage-ment phenomenon, addressing areas such as protocols, business ethics, dispute resolu-tions, planning, risk mitigation, tools and performance metrics. This is especially true for corporates dealing with company-wide ini-tiatives which involve the integration of new partners. The more extensive the outsourc-ing model, the greater the need for governance to keep the client and provider aligned.

2. Chemistry. The second truism is as common as the first: People like to do busi-ness with people they like. Specifically, matching the right account team members with the client’s cul-ture, personality, gov-ernance, industry and goals can be challeng-ing, but is an absolute necessity. It is the first step in establishing a healthy, long-term relationship – one that holds up not just dur-ing the good times but the bad times as well.

The provider’s account management approach, style and demeanor must take into consideration the client’s

current state of transformation, cul-ture, goals, processes and procedures to create a customized and flexible approach – one that does not dictate change but rather enhances in a con-structive and collaborative fashion, supported by a thorough communica-

tion plan that promotes employee sup-port and measurable results.

As an example, many facilities man-agement account assignments are faced with internal client union issues. The

provider might consider an account HR lead who has significant union experience with a positive track record. Those relationships will ensure a col-laborative approach to the assignment.

While consistency and stability are important to any account relation-

ship, the shifting of account personnel is common practice. If the chemistry is not right between a cli-ent and provider, it may be appropriate to replace the team mem-ber with an individual who may be a better fit on that particular account. This does not mean the individual is underperforming or unsuccessful, it may just not be the right match. In fact, the replaced member may be a valuable asset on an alternative account, as their chemistry may be more compatible with a different client.

As mentioned before, in any relation-ship, there are going to be good times and challenging times. To not only survive the challenging times but to thrive as well, a relationship of equal dignity and mutual respect must exist. Just as we all expect and demand respect and dignity in the work-place and in each of our own offices, the same must be true between client and provider. There must be a contractual and

emotional commitment to solve chal-lenges and/or disputes respectfully and through appropriate channels and protocol. That said, equal dignity and mutuality do not come easy. They are



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earned through relationship building and endure through personal chemistry.

Understanding your client’s business drivers and overall corporate strategy is essential. However, it is also impor-tant that the provider and client share compatible personalities, approaches, interests and corporate cultures. The evolution of the relationship from vendor to provider to partner and, ulti-mately, to trusted advisor, is achieved through trust, performance and per-sonal relationships. The stronger the relationship is, the greater the trust will be. If the client is not happy with an aspect of the service delivery, they will trust the provider to resolve the problem and are likely to be more toler-ant than they would be otherwise.

Every corporate occupier is a unique company with unique attributes that requires a service provider able to affect change in a positive and collab-orative manner while working within


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about the author

Chris Cooper is Chief Executive Officer for Charles Dunn Company. Prior to joining Charles Dunn Company, he served as Senior Managing Director at

Cushman & Wakefield and as Executive Vice President at Jones Lang LaSalle.

the constraints of the client’s culture, governance and industry. Implementing a design-build approach, coupled with a keen sensitivity to client-provider chemistry, will foster an enduring part-nership of alignment, transformation and trust. Don’t get me wrong; let us not diminish the importance of cover-age, technology, pricing and depth. Just don’t forget some of the basic yet cru-cial tried and truisms.

executiveprofile

Jones Lang LaSalle’s Tod Lickerman: Matching Great Talent with Great Clients

B Y c h e l s i e B u t l e r

2011 the leader 52 s e p t e m B e r / o c t o B e r

few years, he has led the Commercial Solutions Group, specializing in incu-bating the firm’s specialty businesses, including health care, mobile engineering and energy and sustainability.

Last May, Lickerman was appointed CEO of Jones Lang LaSalle’s Corporate Solutions business, where he is in charge of delivering integrated real estate services for the firm’s major corporate clients – what he describes as “bringing together the right mix of capabilities to meet and serve our largest clients’ needs.”

New Title, New RolesLickerman’s main responsibilities in his new role can be broken down into three main areas, which include developing tal-ent, operations and client development.

“We have 7,000 employees in our Corporate Solutions business, so we spend a lot of time on talent development – put-ting the right people in the right roles, recruiting people and giving them career opportunities,” he says. “We care about positioning them for success.”

Lickerman also focuses on business oper-ations – checking in on investments and where they need to add to their platform.

Tod Lickerman’s career at Jones Lang LaSalle is a great example of the wide range of career experiences available in our industry.

Having been with Jones Lang LaSalle since 1985 (then called LaSalle Partners), he started out in the firm’s construction business as a field superintendent, and then moved on from a project manager to a program manager – moving up the chain in search of a bigger impact.

He has been the President of the firm’s Project and Development Services business and also the President of the Integrated Facility Management function, helping grow both to among the largest of their kind in the world. Lickerman also worked on the global integration merger between LaSalle Partners and Jones Lang Wootton from 1999 to 2001, helping create the firm’s global platform and transform it from a partnership structure to a global public company.

As a client executive, he has worked with the likes of Motorola, United Health Group, Honeywell, Merck, Pfizer and Amgen, creating customized integrated facility management and real estate solu-tions for those major companies. The last

The last area under his accountability is client development.

“We have 10 strategic clients on our Client Advisory Board, and we meet regularly to understand how we can bet-ter craft our platform to fit their needs,” he says. “We’re also talking to new potential clients – understanding where their business is moving and how we can help them.”

What Makes Jones Lang LaSalle Tick?The firm prides itself on being a people business first and foremost, recruiting and retaining the best people in the industry. According to Lickerman, his firm offers a high-performance environment where the best people can do great work for out-standing clients. Jones Lang LaSalle is also protective of its brand, ensuring it is at the top of the market by cultivating great employees and clients.

He cites the firm’s deep specialty capa-bilities and broad geographic presence as pathways to its success, as well as its open system and culture.

“At Jones Lang LaSalle, you can have a great career, doing what you do best – whether you are a project manager, broker


or a portfolio planner,” he adds. “People are open with each other, and you can navigate across the firm to help solve your client’s challenges and really get what you need to do your best work.”

Sustainability is another huge priority for the firm and its Global CEO Colin Dyer. According to Lickerman, Dyer plays a valuable role raising sustainability as a global issue and encouraging the corporate real estate (CRE) industry to contribute.

Sustainability is also a top issue among the firm’s employees, as 400 of them are currently going through the LEED certification process at their own request. Lickerman says the target is for the firm to have 1,000 LEED-certified professionals by the end of this year, which most definitely will be achieved.

“We have progressed from just talking about it to making it a part of how we do business,” he says. “Whether it is calculat-ing the relative carbon footprint of various real estate options to energy management in operating buildings for sustainable proj-ect delivery, sustainability has become how we do business and how we will always do it moving forward.”

Overcoming Industry ChallengesWhile Lickerman admits CRE has some challenges to overcome, he also sees those challenges as goals to be achieved. One such challenge is that he feels more rela-tionships need to be based on value and not just cost.

“We’re often in a commodity selling and buying process, and we end up overly focused and grinding on a small portion of the cost, versus focusing on how we

We have 7,000 employees in our corporate solutions

business, so we spend a lot of time on talent development – putting the right people in the right roles, recruiting people and managing their careers.

together can drive value across the entire portfolio,” he says.

Lickerman cites a goal among service providers should be to improve diversity throughout their organizations, stating that CRE has a long way to go to reflect the diversity of the rest of the country and ensuring it has a wide range of back-grounds and ideas.

“At Jones Lang LaSalle, we have a strong internal diversity program, and we’re making a lot of progress,” he says, “It’s a big deal to us, but there is a lot more progress that needs to be made in the industry in general.”

CRE Trends Today and Going ForwardAccording to Lickerman, five to 10 years ago, CRE was all about getting a seat at the table, and by being proactive the industry has achieved that goal. He adds that CRE has had the exposure inside cor-porations showing that it genuinely under-stands the importance of real estate and how it contributes to the bottom line.

“That was a big goal for the industry 10 years ago, and it’s good to see the progress that has been made by our clients, hope-fully with a little help from their service provider partners,” he says.

Lickerman also feels that end user and service provider relationships have advanced significantly.

“Today, CRE regularly uses providers as an extension of their delivery chain,” he says. “And in most cases, you can’t tell who is an employee for the end user company and who belongs to the service provider – and I think that’s a good thing.”

As for future trends, Lickerman says we’ve been through a large period of cost cutting and cost control, which is fine, but going forward, he feels it will be a balance of that as well as enabling growth and productivity.

“I think the language of how CRE enables the business will be a big focus,” he says, “because in the future, the ser-vices we provide to our clients may not necessarily always be about real estate.”

Connection with CoreNet GlobalLickerman has been involved in the orga-nization since the IDRC days, and his firm has participated at all levels, including Board membership, Silver Partner status, speaking roles at Summits and Discovery Forums and participation at Chapter events. He adds that CoreNet Global is one of the mediums through which Jones Lang LaSalle connects with its clients around the world.

“I think CoreNet Global is important to our firm because it helps our people understand the business and what is important to our clients and where they are going,” he says. “Their participa-tion helps them develop their skill set through interaction with other Members and industry experts, and it helps us con-tribute to the conversation of where the industry is going.”

On his rare day off and when the weather is good, you will find Lickerman, a licensed skydiver since 2002, sky diving over a local drop zone.

“I am just hooked on that sport,” he adds. “At 14,000 feet, it’s very peaceful, and it’s the best view you can get.”

executiveprofile

Tanya Penny: Keeping the Real Estate

Communication Flowing at Verizon

B Y c h e l s i e B u t l e r


a customer service survey after each task is performed to determine how well it was done. On a more strategic level, the team performs walk-through inspections with the owners in all 5,600 buildings in the company’s portfolio, which results in an action plan to better support the condition of the building. The team also performs quarterly reviews with cus-tomers as an opportunity to assess the state of the building and share long-term growth plans.

Real Estate StrategyIn 2010, Verizon shed seven million square feet (650,321 square meters) of real estate, the largest reduction the company has ever made in a single year. Verizon now owns or leases 113 million square feet (10.5 million square meters) of real estate; five million of which is outside the U.S. Corporate real estate’s responsibilities include administrative buildings, call centers, many network buildings and data centers.

Tanya Penny has worked in the telecommunications industry for almost 30 years, most of which was spent with MCI, which

became part of Verizon in 2006. Now, as Vice President of Real Estate for Verizon Services Operations, she and her team are a key part of several strategic initia-tives the company has underway.

Verizon has an important credo dedi-cated to strong customer support: We focus outward on the customer, not inward. We make it easy for customers to do business with us, by listening, antici-pating and responding to their needs.

“In almost every conversation I have as a leader, we discuss customer service and accountability,” says Penny. “Ours is a real culture of accountability, driven by our goals and objectives – high integ-rity is expected.”

To ensure it is staying in touch with the needs of its customers, on a tactical level Verizon’s real estate team employs

“As a global leader in delivering broad-band and various other wireless and wireline communications services,” says Penny, “our large network and data cen-ters constitute the largest portion of our owned facilities.”

In terms of a real estate strategy, Penny says there is a challenge as she tries to align with various company objectives, including right-sizing the portfolio. She says that one of the big-gest challenges is to resize the portfolio so that the dollars spent allow for better building conditions. Since Verizon’s vast network has been built up over many years and it can’t simply be relo-cated, many of the buildings housing that network equipment are 30 to 50 years old and have challenging conditions.

“We believe that portfolio right-sizing is really the key to creating a productive, enhanced workplace because it consoli-dates facilities and operations,” she adds. “It drives portfolio reduction and produc-tivity by bringing teams together and has a


We believe that portfolio right-sizing is really the key

to creating a productive, enhanced workplace

because it consolidates facilities and operations. It drives portfolio reduction

and productivity by bringing teams together and has a huge impact on our ability to improve our customer

service and our bottom line.

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services to facilities management to generator maintenance – services that have all been managed on a task-by-task basis. As part of the company’s strategy, the idea is to consolidate those services under a few select vendors, or best-in-class suppliers, as Penny calls them.

Sustainability and Workplace InitiativesPenny says the company goal year-over-year is to save $50 million in energy. Verizon is in the process of rolling out what she believes to be one of the most complex smart-building programs in the United States. The smart-building roll out will eventually include more than 200 network and administrative build-ings that will have meters installed to send information, such as which tem-perature controls need adjusting, to a centralized operations center to track and manage energy usage in real time.

“It’s a leading-edge strategy, and we are rolling it out in a very aggressive way,” she says. “We already have 18 buildings up and running, and we have seen a sav-ings of between five and 10 percent.”

Verizon has been taking advantage of various alternative workplace strate-

huge impact on our ability to improve our customer service and our bottom line.”

Verizon has designated about 50 build-ings as part of a new magnet program to provide workspace for a majority of its administrative employees. These locations offer the most potential for consolidation.

“This program really supports employee consolidation, improves employee productivity and allows us to take advantage of a denser work environ-ment,” says Penny, “which obviously results in improved shareholder value.”

Another part of Verizon’s real estate strategy focuses on the standardization of various processes.

“Like many companies, we are a result of many mergers and acquisitions, and if you start to look at our portfolio, there are stan-dardization opportunities that will result in a more efficient building portfolio and improved customer interface,” she adds.

Integrated Vendor ManagementAbout 70 percent of Verizon’s real estate work is performed by vendors, and another priority for the real estate team is to do this more strategically. Verizon currently has some 850 vendors perform-ing various services ranging from food

gies for several years, and a year ago, the company rolled out a customized work solutions strategy. These solutions offer alternative remote and mobile work arrangements that benefit the employee, increase productivity for its customers and are good for the environment.

“We moved more than 25,000 employ-ees last year, and what we try to do is tailor these workplace solutions to departmental operational requirements, which include things like telecommut-ing, desk sharing and hoteling, but it’s not a one-size-fits-all answer,” says Penny. “We are pushing for broader adop-tion of this strategy, and because we have the support of senior leadership, we have made good progress over the past year.”

CoreNet Global ConnectionPenny was recently elected to CoreNet Global’s Board of Directors, and as Verizon gets more involved with the organization on a regional basis, its high-est-achieving employees are awarded with the educational and networking opportunities CoreNet Global offers.

“It has really been a valuable relation-ship in terms of benchmarking and strat-egy development,” she adds.

tanya penny: Keeping the real estate communication Flowing at Verizon

Verizon center, basking ridge, n.J.

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executiveprofile

Sea, Air and Land: Bill Dobbs Leads Georgia’s Aerospace, Defense and Advanced Manufacturing

Economic Development Team

B Y B A i l e Y W e B B

2011 the leAder 58 s e p t e m B e r / o c t o B e r

Technology’s Guggenheim School of Aerospace Engineering is the second-ranked school of its kind in the U.S., and a Cleveland State University study rated Georgia aerospace workers at the top in valued-added output per employee. Lockheed Martin continues to produce the venerable C-130 cargo plane and cutting-edge F-22 fighter in Marietta, while Boeing makes parts for C-17 cargo and A-10 attack aircraft in Macon. With Boeing’s production of the Dreamliner passenger aircraft in Charleston, S.C., Vought Aircraft has announced plans to add 300 workers in Milledgeville, Ga., and U.K.-based Firth Rixson has announced a $250-million expansion of its metal forging facilities in Liberty County near the Georgia coast. Also near the Georgia coast, Gulfstream, which was already on pace to exceed 2010 sales, recently picked up a $2.5-bil-lion order for 50 high-end business jets from a Chinese aviation leasing company, according to the Savannah Morning News.

The state benefits from its proximity

Bill Dobbs has flown around the block a few times. He joined Georgia’s economic development team in 1987 and, five governors later, now

leads the state’s aerospace, defense and advanced manufacturing efforts, which are part of the Global Commerce Division at the Georgia Department of Economic Development. In Dobbs’ purview – and despite recession – the state has worked with companies like Korean automotive giant Kia Motors and Savannah, Ga.-based Gulfstream Aerospace to launch major economic development projects and expansive growth.

Of course, Georgia’s aerospace history is nearly as lengthy as the history of manned flight, dating back to 1907 and the state’s first pilot, Ben Epps. Charles Lindbergh made his first solo flight in 1923, taking off from Americus, Ga., and Lockheed Martin and the U.S. Air Force have had a major impact on manufacturing and aero-space jobs in metro Atlanta and through-out the state since World War II.

These days, The Georgia Institute of

to the Marshall Space Flight Center in Huntsville, Ala., as well as NASA’s oper-ations in Central Florida. Dobbs, him-self, is an avid pilot – or he was when he had the time – and enjoyed taking to the skies in a Maule Inc. plane built in Colquitt County, Ga.

“I doubt (Ben Epps) had any idea 104 years ago that today we’d have 80,000-plus aerospace employees in Georgia,” says Dobbs. “The entire Southeast has a strong aerospace environment, and Georgia’s the crossroads of the region. We fall right between Huntsville and Canaveral.”

With a new governor in 2010 – Republican Nathan Deal – came a new economic development focus, the Georgia Competitive Initiative, a statewide economic development and job-creation strategy bringing state gov-ernment and the business community together to stimulate growth. Under the new program, the Georgia Department of Economic Development and Georgia Chamber of Commerce this year are working to benchmark the state’s infrastructure, innovation, educational


systems and work force development programs with the ultimate goal of increasing competitiveness, especially in manufacturing and technology, health-care and agriculture.

In every state, a new administration means new priorities and new faces, but one program is likely to remain a cor-nerstone of Georgia economic develop-ment, Quick Start. Originating in 1967, Quick Start provides customized work force training free-of-charge to quali-fied businesses in Georgia and includes classroom, three-dimensional animation and simulation and hands-on guidance. Quick Start also will travel within the U.S. or abroad to build training programs if a company is cloning a facility. As of fiscal year 2010, Quick Start covered 6,065 projects, training 877,521 stu-dents, including 2,716 aerospace and automotive employees last year alone. Similarly, the Georgia Work Ready pro-gram aims to improve workers’ global competitiveness using ACT Systems’ work force evaluations, which measure core skills and work habits. Companies meeting minimum hiring requirements can access the database of Work Ready-certified employees, which total more than 148,000 since 2007.

Kia Motors began production of its Sorrento CUV in 2009 – and announced in April it will begin producing the Optima sedan later this year– all with the assistance of a dedicated, onsite Quick Start training center. Similarly, NCR, which relocated its corporate headquarters to metro Atlanta in 2009, utilized Quick Start in training employ-ees at its ATM manufacturing facilities in Columbus and began production in July 2009 with zero defects.

“Probably the finest – and most widely emulated – discretionary program we have is the Quick Start program. It’s so employees can hit the ground running upon opening. That’s why it’s such a strong incentive,” says Dobbs. “It’s a long-term benefit and not just for the company. The state looks at training like this as a means to improve quality of life for Georgia citizens.”

Kia’s Georgia operations are one more piston in the Southeast automo-tive engine that has developed over the past 15 years, with BMW in South

the hundreds of thousands of

military personnel based in Georgia

tend to remain in the state and

prove to be a great resource and

draw for potential employers as well.

We’re fortunate, too, that when these

soldiers leave the service, employers really want them.

employers definitely look at this. It’s a real opportunity

for them.

Carolina, Hyundai and Mercedes Benz in Alabama, Nissan and Toyota in Mississippi and Nissan and Volkswagen in Tennessee. Parts suppliers and manu-facturers abound in the region as well, all attracted to its young work force, right-to-work status and flexible work force, which makes a huge difference, says Dobbs. Wages in the Southeast’s automotive sector are comparable with any other part of the U.S., but the big difference is that employers don’t want to hear, “That’s not my job.”

“It’s not so much that it’s anti-union, but it’s the flexibility of the work force,” he says. “Also, the work force around this country averages a much higher age than we do in Georgia.”

As well as automotive, Georgia also has benefited from a burgeoning defense sector, another historically key compo-nent of the state’s economy.

The U.S. Army is relocating its armor center to Fort Benning in Columbus, increasing the base’s total economic impact from more than $4.3 billion to an estimated $5.8 billion. In southeast Georgia, Fort Stewart hopes to gain an additional combat brigade and 4,000 soldiers. Warner Robins Air Logistics Center in Middle Georgia, the larg-est industrial complex in the state, is one of only three such facilities in the U.S., supporting the Air Force’s giant cargo planes and their maintenance. King’s Bay Naval Base on the Georgia coast also has drawn Lockheed Martin, General Dynamics and other high-tech companies to the area to support subma-rine operations. All of the state’s DoD logistics and maintenance operations also position the state well for defense-related manufacturing, says Dobbs.

“Georgia is poised to take advantage of that because our cost of doing business is so much lower than many traditional areas with high concentrations of DoD manufacturing,” he says.

“The hundreds of thousands of mili-tary personnel based in Georgia tend to remain in the state and prove to be a great resource and draw for potential employers as well,” he adds. “We’re fortunate, too, that when these soldiers leave the service, employers really want them. Employers definitely look at this. It’s a real opportunity for them.”

specialfeature

Riding the Green Wave:Sustainable Practices Pay Dividends for Cities and Real Estate Providers

B Y s t e V e W e B B


nesses to the city. “We’re leveraging the clean energy opportunity to create eco-nomic development opportunities and hundreds of new jobs.”

Green Becomes More RoutineAs LEED has become the industry stan-dard for sustainable development for new construction and existing buildings, the certification process has become more manageable and less costly.

“I think one of the trends that has helped U.S. companies achieve LEED certification is the elimination of the construction-cost premium,” said Rick Smith, Senior Managing Director responsible for global platform services, including sustainability, within project management for CB Richard Ellis. “It’s not just architects but general contrac-tors and subcontractors that have incor-porated LEED standards. It’s become part of their business.”

CB Richard Ellis, the world’s largest real estate services firm, helps clients

U.S. Green Building Council’s (USGBC) LEED-certification program.

While real estate companies are increasingly recognizing the value of sustainability initiatives, so are cit-ies. San Antonio, the third-largest city in Texas with a metro population of 2.1 million, has launched an initiative called Mission Verde, which includes an emphasis on renewable energy and job creation through green infrastructure. In June, the city announced that five clean-energy companies will partner with CPS Energy, the municipally owned utility, on projects that will curb energy use while bringing 230 technical and profes-sional jobs to the city. San Antonio is also making a major push to boost its solar power-generating capabilities.

“We’re determined that San Antonio will be a focal point of the new energy economy,” said Mario Hernandez, President of the San Antonio Economic Development Foundation, a private organization that works to attract busi-

Economic development departments and real estate companies across the globe are realizing that it pays to be on the leading edge

of green technology. Sustainable prac-tices reduce energy consumption and contribute to a healthier environment. At the same time, green practices pro-vide cities an opportunity to create jobs through clean-energy projects and enable real estate companies to realize a greater return on their investments.

According to a 2010 study by CB Richard Ellis – “Do Green Buildings Make Dollars and Sense?” – green office build-ings financially outperform their less sustainable counterparts. Office buildings with LEED certification generate a 4 per-cent higher return on investment and a 5 percent increase in building value, along with an 8 percent reduction in operating costs and higher average rental rates.

Due largely to those benefits, 40,000 projects are now participating in the

For more information contact the Rancho Cucamonga Redevelopment Agency 909.477.2700 • [email protected] • www.RCRDA.us

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Educated. Happy. Affordable.Bachelors, masters, doctorates, professional degrees. More than 63% of Rancho Cucamonga residents attended college. That’s higher than all Southern California counties, and growing—41% of the City’s labor force growth since 2000 has been professionals, scientists, and executives. It’s an affordable workforce tailor made to power technology firms, large professional organizations, and regional corporate headquarters. To avoid commuting to coastal counties, they’ll take approximately 8% less than the L.A./Orange County average. Your workforce is already here.

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Based on the in-depth interviews con-ducted in the first few months, there are already some key conclusions.

“The majority of workers want their company to go well beyond environ-mental compliance with sustainabil-ity,” said Marie Puybaraud, Director of Johnson Controls’ research arm, Global WorkPlace Innovation.

The findings of the study will be pre-sented September 23 to October 5, at the London Design Festival. Ultimately, Johnson Controls will use the findings to create e-learning and other product offerings for its clients.

“With this guide, we can map out the different stages that organizations need to go through to reach the level of basic environmental compliance and then beyond,” said Puybaraud. “The goal is to help clients be more strategic about sustainability.”

In addition to conducting sustain-ability research and implementing green solutions for its clients, Johnson Controls is leading by example. In September 2010, the company achieved LEED Platinum certification for the

environmental quality and innovation. Projects are eligible to receive basic certi-fication or the higher levels of Silver, Gold or Platinum. For the new office space it occupies, CB Richard Ellis has a minimum standard of LEED Silver certification.

“The common question I ask all clients is, ‘What does success look like when you’re done with a project?’” said Smith.

Measuring Green SuccessOne way to define the success of sus-tainability efforts is to get input from space users. Johnson Controls, which offers clients property management and other services through its Global WorkPlace platform, is conducting a study with the Royal College of Art in the U.K. to determine what workers of different ages are looking for in a sus-tainable workplace. Studies have shown that workers prefer green office space and are more interested in working for companies that are environmentally responsible. The study, “Sustainable for All,” will provide guidance to corporate real estate (CRE) operations on how best to implement green initiatives.

implement energy-efficiency programs and sustainability initiatives. The company recently received its 100th LEED for Existing Buildings certifi-cation and expects to increase that total to 200 by the end of this year. The LEED projects range in size from 3,000 square feet (279 square meters) to 1.8 million square feet (167,225 square meters). The company’s LEED certifications for New Construction and Commercial Interior projects exceed 75 projects, including USGBC’s 75,446-sq.-ft. (7,009-sq.-m.) headquar-ters facility in Washington, D.C.

“Larger corporations in particular are becoming more advanced and are look-ing in their rear-view mirrors to see what other companies are doing,” said Smith. “And there are clients that are not necessarily interested in the LEED plaque on the wall but want to real-ize sustainability benefits in building design, energy efficiency and materials.”

The LEED certification system awards points for projects in several categories, including materials and resources, water efficiency, energy and atmosphere, indoor

riding the green Wave: sustainable practices pay dividends for cities and real estate providers

the frontier project in rancho cucamonga aims to inspire residents and builders to adopt sustainable practices.

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306,359-sq.-ft. (28,462-sq.-m.) renova-tion and expansion of its headquarters campus in Glendale, Wisc. The green design features include 1,452 solar pan-els that produce electricity for two new buildings of 114,599 square feet (10,643 square meters) and 31,700 square feet (2,945 square meters), a 30,000-gal-lon cistern that captures rainwater to reduce water usage and energy efficient glass and skylights that limit the need for electrical lighting.

The company’s highest-profile project, which it is undertaking with Jones Lang LaSalle and other service providers, is the $500-million green retrofit of the Empire State Building. Infrastructure and design upgrades will eventually place the world-famous, Great Depression-era skyscraper among the top 10 percent of U.S. office build-ings in energy efficiency.

London-based Regus is another com-pany going beyond the basics when it comes to sustainable business practices. In May 2010, the provider of flexible office space achieved the Carbon Trust Standard, which certifies organizations that demonstrate a reduction in carbon emissions. To maintain the certification, organizations must continually measure their carbon footprint and renew the certification every two years. As the com-pany demonstrates its commitment to sustainability, it hopes to win the loyalty of environmentally conscious clients.

“More people are interested in com-ing to a building if it’s environmen-tally sound,” said Celia Donne, a U.K. Director for Regus. “While at the same time clients are asking us about our green practices, we are asking our land-lords to address sustainability.”

At 154 of its business centers across the U.K., Regus is implementing green practices, such as installing light sen-sors, implementing automatic meters for accurate electric and gas readings and educating tenants about energy-saving practices and recycling programs. Next, Regus will extend these measures to 1,200 office centers in Europe, North America and Asia. The company has also established a goal of reducing its carbon footprint by 50 percent by 2020.


the neW World of carpet design

you’d probably be surprised to learn

about the types of materials being

used to make flooring these days.

how about carpeting made from sal-

vaged fishing nets? or that new line

of carpeting containing fiber derived

from renewable plant sugars?

interfaceflor and tandus

flooring are developing sustainable

flooring systems that incorporate

those unusual materials.

as more building owners and ten-

ants are becoming environmentally

conscious, there is a growing market for products made from renewable and

reclaimed materials. the leed certification program, which awards points for

renewable building materials and innovation in design, is helping increase demand

for sustainable flooring systems.

interfaceflor recently unveiled its striation brand of carpeting made from

100-percent non-virgin yarn, combining reclaimed carpet fiber with salvaged

fishing nets to deliver a minimum total recycled content of 79 percent when

incorporated with the company’s glasbac backing system. all of the company’s

carpet lines incorporate sustainable design elements, including its smithfield

stripe and finsbury square modular carpeting lines, which feature a recycled

content of 48 percent.

“tenants are asking for these types of products, and owners are realizing they

can woo tenants by incorporating design elements with these types of attributes,”

said erin meezan, vice president of sustainability at interfaceflor.

the company’s green practices extend across its business operations. in fact,

interfaceflor has established a goal of becoming a “closed-loop” operation –

eliminating all waste and pollutants by 2020.

“our company has risen to the challenge that our chairman and founder [ray

anderson] set for us 15 years ago,” said meezan. “We are looking at all aspects of

our business to accomplish that.”

tandus flooring, which operates five manufacturing facilities in georgia, also is

providing innovative sustainable products. the company’s genesis flooring uses

a biopolymer derived from renewable plant sugars, which is encapsulated by a

nylon sheath for durability.

the company has made a major commitment to recycling. since 1994, tandus

has recycled 175 million pounds of flooring and manufacturing waste. sixty per-

cent of the materials the company reclaims and recycles is derived from its com-

petitors’ waste stream, and the carpeting produced through that system is part of

the company’s er3 line of sustainable products.

in another example of reclaimed materials, tandus’ research and development

team has produced ethos, a high-performance polymer that is recycled from the

film contained in disposed windshields and safety glass. ethos modular carpeting

contains 26 to 50 percent recycled content and is 100 percent recyclable.

“the change in the commercial real estate industry since 2001 has been phe-

nomenal,” said ross leonard, director of marketing for tandus. “every rfp we

get from every corporate end user includes sustainability as a significant part of

the process.”

as building owners and tenants become more environmentally conscious, flooring manufacturers such as interfaceflor are offering additional product lines made with reclaimed or renewable materials.


“It’s an ongoing process to look at all areas where we can be more environ-mentally friendly,” said Donne.

Cities Demonstrate Green CommitmentDallas and Houston are the economic powerhouses in Texas, but San Antonio is becoming a national leader in clean energy and is in the process of generat-ing employment opportunities for its residents. As part of the city’s Mission Verde, San Antonio is committed to growing its renewable energy sector. CPS Energy, the largest municipally owned electric and natural gas utility, is about to dramatically boost its solar power generation. CPS Energy’s only current solar generation facility is the 14-megawatt Blue Wing Solar Project.

CPS Energy is seeking bids for 400 megawatts of solar power, which will be generated by photovoltaic cells that the winning bidder will install in the

region. The utility had originally sought bids for 50 megawatts of solar power, but decided to ratchet up its original commitment because of declining solar energy prices. The 400 megawatts of solar energy will supply power to an estimated 80,000 homes in the city. Thanks to CPS Energy’s diverse mix of energy sources, San Antonio residents have the lowest utility bills of any of the top 20 U.S. cities.

The project will also benefit the city economically. According to Mario Hernandez of the San Antonio Economic Development Foundation, “The bid requires them to bring manu-facturing jobs here.”

CPR Energy is turning to renewable energy to reduce the region’s reliance on carbon-emitting energy sources. The solar energy project is one of the initiatives that will enable the utility to close down coal-fired energy plants. Although it will cost the utility more

per kilowatt hours to provide solar power than power it generates from its nuclear, coal and natural gas plants, the project is part of the utility’s mission to increase its investment in renew-able energy. However, even with the major boost provided by the upcoming 400-megawatt project, solar energy will represent only a fraction of the utility’s total energy capacity.

As San Antonio is about to become a leader in solar energy, CPS Energy already ranks as the top producer of wind energy among municipally owned U.S. utilities. Several energy projects announced by the city in June will fur-ther cement San Antonio’s reputation as a hub of clean energy.

Consert, a company that produces sophisticated energy management soft-ware designed to reduce energy usage, will relocate its headquarters from Raleigh, N.C., to San Antonio, estab-lishing 50 jobs by first-quarter 2012.




Johnson controls received platinum leed certification for its renovated and expanded campus in glendale, Wisc.

We’re giving you the green light.

602 E. Commerce St. • San Antonio, TX 78205Visit sanantonioedf.com • E-mail [email protected] or call for a free DVD. Toll-free: 800-552-3333 • Local: 210-226-1394 • Fax: 210-223-3386

©2011 SA Economic Development Foundation

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The company will expand an existing pilot program and eventually install its software in as many as 140,000 homes and businesses by 2015. GreenStar will create another 35 jobs by relocating from Boerne, Texas. The company will replace 25,000 street lights in San Antonio with high-effi-ciency light-emitting diode (LED) technology.

Other businesses that will set up shop in San Antonio include ColdCar USA, which will create up to 45 jobs and transition the refrigerated trucks it assembles to electric or hybrid trucks, and SunEdison, which will locate a 30-mega-watt solar generation project in the city. In addition, Summit Power will construct a clean-coal plant that will supply power to CPS Energy in a 25-year agreement and establish its customer services offices in the city.

In California, the city of Rancho Cucamonga’s dedication to sustainability is visible in a state-of-the art green demon-stration building. The 14,000-sq.-ft. (1,301-sq.-m.) Frontier Project is a showcase of sustainable building that aims to inspire commercial and residential builders to incorporate green systems into their own projects.

The Frontier Project, which received Silver LEED certifi-cation in May 2010, features sustainable innovations, such as a photovoltaic solar array that provides 40 percent of the building’s energy, a passive cooling system, an onsite water retention system, a green roof and reclaimed redwood from a local winery used as a shade structure. The Rancho Cucamonga Water District developed the project and raised funds through the non-profit Frontier Project Foundation, which received capital contributions from area businesses and the city of Rancho Cucamonga.

“We embraced the project because it falls in line with what the city is doing to create a more sustainable community,” said Mike Nelson, Economic Development Manager of the Rancho Cucamonga Redevelopment Agency. “It’s become an ecotourism stop in the community.”

The city has an ongoing Sustainability Action Plan that has incorporated a variety of green measures and it is in the process of updating its development code to encourage sustainable construction. The city is also doing its part to reduce its carbon footprint through a variety of green prac-tices. For instance, a local fire station installed 14,000 square feet (1,301 square meters) of artificial turf to reduce water usage. The city has also installed a computerized monitor-ing system to manage irrigation at parks, retrofitted traffic lights with energy-efficient LED lights and enacted a waste ordinance requiring construction and demolition projects to divert 50 percent of waste to recycling centers.

Rancho Cucamonga also encourages residents to adopt a healthy and sustainable lifestyle through its Healthy RC ini-tiative launched in 2008. Healthy RC offers a wide range of programs and policies focused on building “healthy minds, healthy bodies and a clean and sustainable earth.”

“It’s important that the city sets an example for the com-munity,” said Nelson. “We can’t encourage our residents and businesses to embrace sustainability and healthy community initiatives unless we, as a city, are willing to make the effort.”

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specialfeature

Back to the Future:New Twists on Long-Standing Industries

and Emerging Technologies Shape Southeast U.S. Economic Development

B Y B a i l e Y W e B B


plex near Lake Charles, La., prepare for Panama Canal expansion and the gigan-tic cargo ships that come with it.

“In today’s economy, companies are looking for high-quality, low-cost locations, and more often than not, you’re going to find those in the Southeast U.S.,” said Whit Hughes, Deputy Director of the Mississippi Development Authority.

Politically, some things have remained the same – Governors Haley Barbour and Bobby Jindal in Mississippi and Louisiana, respectively, while new governors in Georgia and Florida – Nathan Deal and Rick Scott, respec-tively – bring renewed focus on their state’s economic development and job creation. A new speaker in the Georgia General Assembly, David Ralston, and new Atlanta Mayor Kasim Reed, elected in 2009, also play a role in the Peach State’s sea change.

The Gulf Coast and Louisiana con-tinue to serve as one of the country’s energy and oil production centers, but also claims a first-of-its-kind facility to manufacture modular nuclear energy plants. Similarly, the region’s natural resources, such as timber and switch grasses and solar, are yielding a nascent alternative energy industry as well. The Southeast’s aerospace industry dates back to the Wright Brothers and remains a vital, dynamic economic cog, with Gulfstream in Savannah, Ga.; Boeing in Charleston, S.C.; Northrup Grumman and Aeroframe Ventures in Southwest Louisiana; and Kaman Aerospace Corp. and Flightstar Aircraft Services in Jacksonville all fueling job and economic growth.

Along the Atlantic and Gulf coasts, venerable ports like Charleston, Savannah, Jacksonville, Port Everglades and the Miami port in Florida; Gulf Port, Miss.; and the industrial com-

As the U.S. economy recovers from recession, the Southeast and Gulf Coast find new, transfor-mational opportunities

while relying on a few bedrocks that generated decades of consistent growth. It’s no longer business as usual for the Southeast, or any other part of the country or world, so states, counties and their economic development part-ners have found ways to adapt and look to the future.

The automotive industry has long been stalwart in the Southeast, dat-ing back to Ford’s Jacksonville, Fla., operations originating in the 1920s and Ford and GM’s Atlanta plants in the 1940s. New faces like Kia and Volkswagen continue to shape the face of auto manufacturing in the region, as Mercedes Benz, BMW, Nissan and Hyundai have in the more recent past.


next three years, the CEO Council and Broward Alliance focused on what pros-pects and existing companies needed to run corporate and regional headquarters and then followed with economic devel-opment fundamentals and efforts to increase the area’s visibility.

The efforts certainly have paid off over the past year and in 2011 espe-cially. In June, tobacco company Altadis USA announced plans to retain and expand its Fort Lauderdale headquar-ters rather than relocate to another Southeastern location. State and local incentives totaled $625,000 and con-sisted of $330,000 from the Qualified Target Industries Tax Refund program, $236,000 from the governor’s Quick Action Closing Fund and $59,000 in direct tax incentives from the city of Fort Lauderdale. Altadis added 55 jobs paying 150 percent above Broward County’s average salary – $62,448 – and retained 84 employees in the city that have averages wages above $100,000. Also in June, Wendy’s International

“We can’t be more excited about where we are, looking forward not just to the next year but years to come,” said Robin Ronne, Managing Director of the Greater Fort Lauderdale Alliance’s CEO Council. “We’re building the business center of the Americas. We’re seeing a lot of municipalities and the step up to facilitate economic development.”

Sunshine CEOsRonne and the Greater Fort Lauderdale Alliance started the CEO Council three years ago with the goal of attract-ing more headquarters operations to Broward County. The measure involved local and global business, education and political heavyweights such as Wayne Huizenga; Ray Ferrero, President of Nova Southeastern University; Mike Jackson, CEO of AutoNation; and Terry Stiles, CEO of Stiles Corp. The 20-member CEO Council first exam-ined existing resources and found that the region already had 150 corporate and/or regional headquarters. Over the

“For once in quite a while, the gen-eral assembly, governor, lieutenant gov-ernor and mayor of the city of Atlanta are aligned to make the city and state more competitive,” said Hans Gant, Senior Vice President of Economic Development at the Metro Atlanta Chamber of Commerce. “There’s a strong sense of urgency and partnership focused on creating quality new jobs.”

In Florida, Gov. Scott has committed to creating 700,000 new jobs over seven years and brought in Gray Swoope, former Executive Director of the Mississippi Development Authority, to lead Enterprise Florida, the Sunshine State’s economic development agency.

“What we needed most was a governor who understood and is an advocate for economic development, and we now have that,” said Jerry Mallot, President of the Jacksonville USA Partnership, a regional economic development agency serving Duval County and northeast Florida.

South Florida economic developers echo similar sentiment.

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Quality of life and low taxes make broward county and greater Fort lauderdale an easy sale.






tant part of the growth of our region,” Mallot said. “There’s a concerted effort at the state and local level.”

Local officials are working with the Corps of Engineers and the region’s congressional delegation to approve

funding for and dredg-ing of the St. John’s River to accommodate the giant container ships. With dredging secured, international shipping firm Hanjin Shipping has commit-ted to build a $300-mil-lion terminal, and Hanjin is not the only company with big plans for northeast Florida.

Though in its early stages, Fort Myers, Fla.-based Keystone Industries has indi-cated plans to build a 1,000-acre (405-hect-are) “superport” on the north side of Jacksonville. Keystone has entered into an agreement to develop the property with its long-time owner and create a center for cargo shipment and manu-facturing, all served by CSX. The development is expected to cost hundreds of millions of dollars and create thou-sands of jobs, according to reports in the Florida Times Union.

With Panama Canal expansion and its three deep-water ports, air-port and proximity to three interstates – I-75, I-95 and I-10 – Jacksonville is posi-

tioned for gains with logistics and inter-national trade, Mallot said.

“International business is really important to us, not only trade but attracting companies as well,” he added. “It’s all part of our effort to make

adding 100 employees with a capital investment of $23.5 million in Sunrise. Additionally, Broward’s Port Everglades, the largest container port in Florida and one of the biggest cruise ports in the world, is working with the U.S. Army

Corps of Engineers to expand facilities for Post Panamax ships.

North on the Atlantic Coast, Jacksonville, too, is preparing and hun-gry for a piece of the Post Panamax pie.

“We intend for it to be an impor-

announced plans to relocate its Latin America and South Florida headquar-ters and executive training center to Sunrise, Fla.,

Sunrise gained another corporate resident in July when St. Louis-based Emerson announced plans to locate its Latin American headquarters in Broward County. With the move, Emerson is bringing 51 jobs with average wages above $80,000 and keeping 25 exist-ing jobs in Florida. The company also plans to invest $2.2 mil-lion in its office build out and technology at LakeShore Plaza II, where its lease and option total approxi-mately 29,000 square feet (2,694 square meters).

“It’s a process that doesn’t happen over-night, but we’re really seeing the results now,” Ronne said. “The retention and expansion of a head-quarters’ operation speaks volumes to what the Headquarters Council is all about. We’re also seeing some great results with growth and expansion beyond our headquar-ters’ recruiting efforts. We’re seeing good indi-cations that companies are looking to expand, whether to serve North American or Latin American operations.”

Outside of the Broward Alliance’s headquarters initia-tive, the organization and its local and state partners have worked to secure expansions with Great Healthworks, which is adding 346 new jobs in Hollywood, Fla., and Eyecast, which is


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tion the county from bedroom commu-nity to business center.

Pasco’s Economic Development Council worked with the Urban Land Institute to streamline permitting and fees, and this summer the county revamped transportation impact fees for office and industrial development to essentially zero. The county’s new mobility fee structure includes funds for mass transit, sidewalks and trails and also utilizes tax-increment financing. Pasco’s also in the process of rewriting

land development codes to create consistent, clear regu-lations that incentivize devel-opment where infrastructure already exists to support it.

Pasco cut other impact fees for businesses on a case-by-case basis and focused local incentives on job creation. New and existing companies that create jobs with at least 115 percent of the county’s average wage, $31,000, earn direct cash payouts from $2,000 to $5,000, depending on new hires’ salaries.

“The future growth of the Tampa Bay region comes through Pasco County,” said John Hagen, President of the Pasco Economic Development Council (PEDC). “We’re positioning the county to come out of the box first as the economy rebounds and capture the momentum of early adopters. It’s clear growth is coming this way.”

As with the Jacksonville region, Central Florida and

Tampa Bay have made enormous strides in the financial services sector over the past 10 to 15 years. Though the sector and both regions were dinged by reces-sion, T. Rowe Price acquired 94 acres (38 hectares) for $13.5 million in July 2009 – and arranged $30 million in state and local incentives. The company maintains its plans to bring 1,600 jobs to Pasco County in the next decade.

PEDC also is working with local,

Florida exemplifies one of its competi-tive advantages in business recruitment and retention: no personal income taxes and a 5.5 percent corporate tax rate. The state recently was recognized for having the fifth-best business tax climate in the U.S., according to the Tax Foundation.

“Florida has a tremendous advantage in terms of its tax structure,” Ronne said. “We’re very focused on targeting areas that have high personal tax conse-quences. If you look at private or public companies, they’re very, very cognizant

of the costs, not only operation and facilities costs but personal as well.”

In Central Florida, Pasco County also is rewriting land-use codes and fees. Historically pastoral and still 90 percent unincorporated, Pasco is at the northern edge of the Tampa Bay region and regu-larly grew 30 percent per year in the run up to the recession. Now, with 470,000 residents and a county budget of $1.1 billion, county leaders want to transi-

Jacksonville America’s logistics center.”Jacksonville will bear the fruit of its

efforts to attract international busi-ness in the third quarter of this year when French battery maker Saft opens a lithium-ion battery manufacturing facility and finalizes the relocation of its U.S. headquarters to the city. Saft received a $95-million grant from the U.S. Department of Energy and plans to invest $200 million, itself, to pro-duce lithium-ion batteries for heavy industry that can store energy from wind and solar operations. Saft’s operations dovetail with JEA’s under-construction solar farm in Jacksonville that will serve as a test case for the local util-ity and its efforts to increase alternative energy production.

Even though Jacksonville suffered job losses in the financial services indus-try, the area subsequently rebounded when the remain-ing institutions began con-solidating operations and seeking areas with abun-dant, experienced labor at a reasonable cost, Mallot said. EverBank has added 200 employees for a total of approximately 1,500 to its back-office operation, while PNC Bank has added 200. Bank of America (BofA) and subsidiary Merrill Lynch have added 1,000 new jobs, bringing BofA’s total to 7,000 employees in Jacksonville. Deutsche Bank is fully staffed with more than 1,000 new employees, and Digital Risk, a mortgage research and analysis firm, has added 300 new jobs.

“Our current prospects include 80 percent that would be new to the region and 20 percent expansion and consolida-tion,” Mallot said. “I look at the major-ity of our projects over the past year, and it’s primarily expansions and winning competitions for consolidation. Going forward, we’re expecting more new com-panies interested in the region.”

Financial services growth throughout


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Westinghouse’s nuclear reactor technology to build modular nuclear power plants; Shaw’s operation employs 1,400.

The emergence of the Haynesville Shale natural gas deposit nearby also has transformed the port into a liquefied nat-ural gas (LNG) export platform. Cheniere Energy Partners has received federal approval to convert its LNG terminal for export and plans to invest $6 billion on the retrofit, creating 148 new jobs and 3,000 construction jobs. The state and region’s agriculture and timber resources are creating alternative energy oppor-tunities as well. Last year, BP acquired Verenium Corp.’s cellulosic biofuels pilot plant and testing facilities in Jennings, La.

“We’re all for alternative fuels and alternative energy, but’s going to take this nation a long time to convert,” said George Swift, President and CEO of the Southwest Louisiana Economic Development Alliance. “It’s going to take a combination of all of it, but in the meantime, we’re providing energy that the nation needs. The fact is, our nation needs energy, and that’s what Southwest Louisiana provides.”

“We’re now going to export (liquefied natural) gas to the world, and it’s going to have a huge impact on the state’s economy,” he added.

With Chennault International Air Park, its 10,000-foot runway and other resources, Southwest Louisiana’s aero-space sector is thriving, too. Northrup Grumman’s operations at Chennault have exceeded the company and state’s job-creation expectations. For its part, Aeroframe Services’ Chennault facili-ties are the largest Airbus maintenance and repair operation in North America. The airpark and region also are a hub for training and maintenance for flight oper-ations serving the offshore oil industry.

“Our aviation sector is really getting strong, and we have the infrastructure to grow the industry even more,” Swift said.

It’s not all business, all the time, though, in Southwest Louisiana. The region is home to four casinos, and a fifth, Mojito Pointe, is under construc-tion with the last of Louisiana’s 15 riv-erboat licenses. It will employ 2,000.

“We have a very diversified economy

and how they’re shaping economic development along the Gulf Coast and southeast U.S.

Offshore oil production and petro-chemicals have been the region’s big-gest employer since World War II and now employ more than 6,500, including operations by Citgo, ConocoPhillips and 21 other petrochemical companies.

The region’s also hedging its future with alternative energy and natural gas, as well as an innovative method for nuclear energy plant construction. Baton Rouge, La.-based Shaw Group has built a facil-ity on 300 acres (121 hectares) at the Port of Lake Charles that combines Shaw’s metal and pipe fabrication expertise with

entrepreneurial companies such as Freightcenter.com, PharmaWorks and Dais Analytic Corp. to build a base of innovation and the work force brain power that comes with it.

“We have these small companies that are scaling up and hopefully are the next big business success story,” Hagen said. “We’d like to hit a homerun once a week, but we also realized that our existing base was somewhat neglected and we wanted to make an aggressive effort to assist and retain them.”

Energy Old and NewSouthwest Louisiana also exemplifies a mix of established and new industries

companies such as porsche N.a., sony ericsson and Novelis have added and expanded corporate or regional headquarters in atlanta in the past 18 months, joining stalwarts such as georgia-pacific, the coca-cola co. and home depot.



competitive advantage for our state. Items like land and buildings and equip-ment are always a part of it, but our team values human capital and connec-tivity as key drivers as well.”

That manufacturing and engi-neering expertise also translates to emerging technologies and alterna-tive energy-focused firms such as Denbury Resources, which is develop-ing carbon capture and sequestration technologies; solar panel producers Twin Creek Technologies and Stion; biomass-derived fuel producer Kior; and Soladigm, which makes glass prod-ucts that can be tinted on demand. The emerging industries complement the state’s existing energy producers such as Chevron’s refinery in Pascagoula, where the oil giant is investing $1.4 billion to produce premium base oil, the primary ingredient in synthetic motor oil.

“You move from traditional energy centers into the world of renewables,”

facturing plant that will employ 500 in Tunica County.

Additionally, Mississippi has emerged as an automotive manufacturing center over the past decade with Toyota in Blue Springs, diesel engine builder Paccar in Columbus and Nissan in Canton.

Every state increasingly relies on its technical schools and junior col-leges to provide work force train-ing, but a big part of Mississippi’s manufacturing gains also stems from efforts at state research universities such as Mississippi State University’s Raspet Flight Research Laboratory, the University of Mississippi’s Center for Manufacturing Excellence and the University of Southern Mississippi’s Lean Enterprise Center.

“That’s significant because you’re taking the research and development activity and translating it into innova-tion and production,” Hughes said. “We see the ability to facilitate that as a real

with aviation, petrochemicals and tour-ism,” Swift said.

Next door to Louisiana, Mississippi has enjoyed a manufacturing renais-sance over the past decade, especially in automotive and aerospace. In late July, GE Aviation announced its sec-ond jet engine manufacturing plant in Mississippi in Ellisville, following the 2008 opening of its initial production in Batesville, which now employs 300. The new facility is slated to begin production in 2013 and employ 250. Combined, the Batesville and Ellisville plants represent a $150-million investment.

The same day as the Ellisville announcement, Grand Rapids, Mich.-based Dennen Steel Corp. announced plans to build a $7.4-million, 50,000-sq.-ft. (4,645-sq.-m.) manufactur-ing facility at Yellow Creek Port in Iuka that will create 50 new jobs. Similarly, Wilh. Schulz GMBH began construction last year of a $300-million pipe manu-

chennault international air park, part of southwest louisiana’s thriving air sector, has a 10,000-ft. runway.



Hughes said “We want to focus on tra-ditional and nontraditional opportuni-ties but to the extent that we move our state toward advanced technology and materials,” Hughes said. “These are the high-quality, high-paying jobs of the future that we continue to pursue.”

Georgia’s on Their MindGeorgia’s recovery from the recession has been a bit of a roller coaster ride, but that doesn’t mean the Peach State hasn’t had its share of success.

Companies such as Novelis, First Data Corp. and NCR have relocated or expanded headquarters opera-tions in metro Atlanta in the past few years, while Sony Ericsson moved its Americas headquarters to Atlanta’s Buckhead submarket last year, all of them joining the likes of The Coca-Cola Co., Home Depot, Georgia-Pacific and Delta Airlines. NCR also cre-ated approximately 870 new jobs in Columbus at its ATM manufacturing facility. Seattle-based pharmaceuti-cals firm Dendreon located R&D and pharma manufacturing operations south of Atlanta, while ThyssenKrupp consolidated its North American IT operations and 110 new jobs in sub-urban Alpharetta. Metro Atlanta and Georgia hit another homerun when GE announced its plan to create 400 new jobs at its Smart Grid Center of Excellence in Cobb County.

“It begins to make Atlanta something of a Silicon Valley for the smart grid industry,” Gant said.

Perhaps the glitziest announcement of the past year, though, involves Porsche North America and its plans to relocate its headquarters within metro Atlanta – from suburban Sandy Springs to Aerotropolis, the rede-velopment of the former Ford plant near Hartsfield-Jackson International Airport. Porsche’s $100-million com-plex includes an office build-to-suit and “experience center” test track on 19 acres (7.7 hectares). Porsche received approximately $14 million in state and local incentives as well as a high-profile location visible from Atlanta’s I-75/85 connector and the

thousands of flights that take off and land at Hartsfield-Jackson every year.

Atlanta and Georgia experienced significant job loss during the reces-sion, but the 28-county metro area is on track to create 20,000 net new jobs in 2011 and 50,000 in 2012 and for the next few years, according to Gant. It’s not the 100,000 new jobs per year the metro area was accustomed to creating pre and post Olympics in the late 1990s and between the recessions that started 2000 and 2008.

“In the past two-and-a-half years we’ve recruited somewhere in the neighborhood of 170 companies to the Atlanta area, and those 170 companies will create approximately 15,000 to 20,000 direct new jobs,” Gant said. “It’s not the huge annual gains we were accustomed to seeing prior to the reces-sion, but it is a slow comeback.”

The Metro Atlanta Chamber and business and political leaders across the state also are concentrating on four major infrastructure projects. First, Hartsfield-Jackson’s new international

terminal is scheduled to open in April 2012, which greatly expands the air-port’s international cache and frees up more gates for domestic flights.

Near the Georgia coast, political and business leaders throughout the state are aligned in the effort to deepen the Port of Savannah to accommodate post Panamax ships. Savannah’s seaport set a record for cargo throughput in its past fiscal year, handling 2.9 million containers, an 11 percent increase over fiscal 2010, the Georgia Ports Authority reported. With the Panama Canal’s expansion, East Coast ports are expected to gain 20 to 25 percent at the expense of West Coast ports, which will ben-efit not only Savannah but ports such as Jacksonville; Charleston, S.C.; Port Everglades and Miami; Norfolk, Va.; and Gulf Coast Ports at Lake Charles and Gulf Port, Miss. The port gains also impact the region’s industrial/logistics markets, especially the metro Atlanta’s giant logistics cluster.

“That is a huge business opportunity for Georgia, and we’re preparing for it,” Gant said.

Two other infrastructure projects represent significant hurdles for metro Atlanta and the state, though. The Metro Atlanta Chamber and a number of other business groups are working on marketing and public-awareness cam-paigns supporting passage of a penny sales tax to fund a litany of transporta-tion projects. The 2012 ballot initiative gives voters in each region of Georgia the opportunity to approve the measure, so one region’s rejection will not affect another’s passage. The chamber esti-mates that it may raise from $8 to $10 billion that can be leveraged for trans-portation funding.

Equally if not more important, Gov. Deal and the state legislature have funded the first phase of North Georgia projects to increase metro Atlanta’s water capacity and plan new reservoirs, an effort that may take a decade to bring to fruition.

“We have plenty of water for our existing needs and short-term growth, but we’ll need to add capacity for future growth,” Gant said.

“it’s no longer business

as usual for the

southeast, or any other

part of the country

or world, so states,

counties and their

economic development

partners have found

ways to adapt and look

to the future.”

engagementprofile


Business recruitment, retention and expansion are being encouraged in 13 industry sectors in the region. To make the region stronger for each sec-tor, Innovation Valley focuses on pro-gram areas in education and work force development, technology and entrepre-neurship, global marketing, business retention and expansion, public policy and quality of life enhancement. The sectors that Innovation Valley is focused on recruiting to its region include cor-porate headquarters, shared-service facilities, distribution, automotive com-ponent manufacturing, media technolo-gies and renewable energy components.

Six economic development agen-cies in this east Tennessee area are teamed up in the Innovation Valley effort, working with a broad range of partners. This partnership for economic development provides “a substantial unity of the various partners in start-ing a new entity or recruiting a new entity to the area – a willingness to

Innovation Valley: Partners for Your Business

Success

b Y s a r a h - m a r t h a t o d d

The Knoxville-Oak Ridge, Tenn., region is unusually rich in science, education and technology assets. A partnership of business,

education, science and technology in the area has effectively leveraged these assets to create a powerful economic development engine. Called Knoxville-Oak Ridge Innovation Valley, the part-nership coordinates a regional approach to economic development.

Rhonda Rice, Executive Vice President at the Knoxville Chamber of Commerce, talks about the advantages of the Innovation Valley partnership.

“The Knoxville Oak Ridge Innovation Valley region offers a location unmatched with technology resources, central location, quality of life, an aggressive business tax structure and an intense focus on education and work force development initiatives that set us apart from our competing regions throughout the U.S.,” she says.

2011 the leader 81 s e p t e m b e r / O c t O b e r

InnovatIon valley: Partners for your BusIness success

2011 the leader 82 s e P t e m B e r / o c t o B e r

advises other fledgling companies. Since its opening, the Anderson Center has had 30 new business starts.

Another key research center is the Oak Ridge National Laboratory, which is the world’s largest multi-disciplinary research lab and is a cen-ter of basic and applied research in energy, environmental sciences and national security. On its campus is the Halcyon Commercialization Center, and its 20,000 square feet (1,858 square meters) of offices and laboratories are available for rent. Shepherded by Innovation Valley’s ED staff, busi-nesses at the Halcyon Center may interact with the Oak Ridge Lab’s researchers to identify a technology with commercial applications and get help developing a prototype.

Andrew Wilhelm, President of LED North America, tells his company’s

entities, and I and others at UT con-nected our regional ED folks to the appropriate expertise in the university when a business had a need.”

A key component of UT’s technol-ogy strategy is the development of a new 188-acre (76-hectare) research and development park called Cherokee Farms. The UT Research Foundation’s annual report is filled with examples of successful projects that received a transfer of intellectual property from UT research.

UT also offers training and coach-ing in entrepreneurship. The College of Engineering has an entrepreneur-ship emphasis, and the College of Business has the Anderson Center for Entrepreneurship and Innovation. The Anderson Center supports the efforts of students in the MBA program to start businesses. It also coaches, mentors and

share to do the greater good for the greater neighborhood,” says University of Tennessee (UT) Distinguished Professor Fred Tompkins. Tompkins is a Distinguished Professor in UT’s department of biosystems engineering and is former President and CEO of the University of Tennessee Research Foundation. He has been involved with Innovation Valley since its inception.

The UT Research Foundation both encourages entrepreneurship and pro-motes the commercialization of UT intellectual property, says Tompkins.

“UT’s high level of research activ-ity has earned it classification as a Carnegie Foundation Research Institute, and its more than $250 mil-lion in external research funding is among the highest in the country,” he adds. ”We discovered how we can turn university discovery into commercial

the oak ridge national laboratory is the world’s largest multidisciplinary research lab and is acenter of basic and applied research in energy, environment and national security.

success story with Halcyon Center and Oak Ridge National Lab. Wilhelm wanted LED North America’s larger commercial lighting application to have a 10-year warrantee. However, the heat generated by larger LEDs was causing them to fail much earlier. Wilhelm was introduced by the Knoxville Chamber to researchers in the Oak Ridge Lab. His company walked away with an exclusive license for carbon foam that will trans-form the LED industry by allowing LEDs to be made smaller, brighter and longer lasting. Because of the foams’ superior thermal management, these luminaires will carry a 10-year warranty. The car-bon foam license has enabled the com-pany to increase its manufacturing and expand into other counties.

Nearby community colleges and high schools are Innovation Valley partners and support the needs of busi-ness through applied programs. Roane State Community College’s Advanced Materials Training Education Center (AMTEC) has a 14-week, entry-level industrial technician program and 40 hours of advanced training in carbon fiber composite materials or solar energy. AMTEC’s business and industry partners helped design the curriculum when the Department of Labor awarded Roane a three-year grant for the program. Two other community colleges offer business and industrial training: Pellissippi State and Walters State. Knoxville also has a new Science, Technology, Engineering and Mathematics (STEM) Academy, a $2-million capital investment that will provide even more technology-based education to Innovation Valley. This new STEM academy opened in August 2011.

Carl Durham, President & General Manager of American Centrifuge Manufacturing, has benefitted from the Innovation Valley education programs. Currently with 100 employees, his firm is expanding to 600 locally with the help of Innovation Valley partners.

“Considering the activities of the

technical schools with our company plus state and local incentives, I’d say $100 million is being spent to get us to where we need to be,” says Durham.

Jennifer Evans, Vice President of Workforce Development and Education with the Knoxville Chamber of Commerce, describes the visioning process for work force education in Innovation Valley.

“Economic development agencies participating in the Innovation Valley initiative asked themselves what was needed to grow their current businesses and the future businesses they need to attract. We have a wealth of STEM companies here and wanted to grow the work force they need,” says Evans. “Doing that meant making an impact on both teacher quality and work force quality. In Tennessee, we have increased our standards to help our local teachers in Innovation Valley ramp up their skills very quickly so they can quickly impart needed work force skills and knowledge to their students at the level of applica-tion, not just theory.”

Six Tennessee Technology Centers in the Innovation Valley region pro-vide skills training on campus or at an employer’s site. Other work force

help includes the state’s FastTrack Job Training Assistance Program, which provides customized training to manu-facturing and service sector businesses as an incentive for creating new jobs. The Tennessee Department of Labor and Workforce Development also offers training through the statewide Career Center System in 13 Local Workforce Investment Areas and provides grant funding for customized training for existing businesses through the Incumbent Worker Training Program.

For businesses and entrepreneurs wanting to take advantage of a robust array of science, technology and educa-tion resources and partnerships, the Knoxville-Oak Ridge Corridor has much to offer.

“I’d encourage businesses that are in the mode of exploring either a reloca-tion or expansion on their operations to make sure that our region is on their site-selection radar,” says Rice. “Our Innovation Valley team will work hard to recruit you to our region, but perhaps more importantly, we’ll be with your company every step of the way through-out the start-up process and maintain that relationship upon transition from recruit to existing business.”


InnOvatIOn valley: partners fOr yOur busIness success

For more information on Innovation Valley, please visit www.knoxvilleoakridge.com. This company profile was prepared by THE LEADER magazine under the sponsorship of Innovation Valley.

“the Knoxville Oak ridge Innovation valley

region offers a location unmatched with

technology resources, central location,

quality of life, an aggressive business tax

structure and an intense focus on education

and work force development initiatives that

set us apart from our competing regions

throughout the u.s.”

industry

tracker

Outsourcing Pioneer Bill concannon: navigating cOmPlex cOnvergence in tOday’s kaleidOscOPic WOrld

2011 the leader 84 s e P t e m B e r / O c t O B e r

We were somewhere in the middle of the 1990s when Bill Concannon called me from his office at Trammell Crow’s Stamford, Conn.-based corporate ser-vices headquarters. The firm had just acquired the corporate services side of Europe-based Savills, and a reporter from the Stamford Advocate newspaper asked me if the deal signified a shift to more corporate real estate (CRE) outsourcing.

As someone who hadn’t “seen the light” yet – that outsourcing was about to

become the defining force for CRE change – I said, “Probably not.” I had just heard from the senior-most CRE person inside a major telecom that her company had begun to insource again, which proved to be a momentary anomaly.

Concannon disputed my statement, which was really the view of what we could have called the “industry tradition-alists” at the time. His insistence that out-sourcing would predominate the future of global services delivery was on target.

The International Association of Outsourcing Professionals (www.IAOP.org) thought so, too. IAOP made Concannon the first real estate executive elected to its Hall of Fame this year.

Another Form of ValidationThere was another key validation before that happened. By late 2006, about a decade after my first conversation with Concannon, Trammell Crow’s corpo-rate services practice would become a key part of the CB Richard Ellis (CBRE) business portfolio.

Viewing the consolidation of both companies through the rear-view mir-ror but still looking ahead, he says now that, “It was very prescient for CBRE to acquire Trammell Crow Company…It solidified CBRE’s position as the leading provider of real estate services for cor-porate occupier clients just a few years before the (2009) recession hit.”

CBRE is today rated as the world’s larg-

est CRE service provider by total revenue, according to several industry trade out-lets. The addition of corporate services to its broad menu of business lines helped fuel that standing. Other major provid-ers like Johnson Controls, Jones Lang LaSalle, Cushman & Wakefield, DTZ, Grubb & Ellis, CresaPartners, UGL and Colliers found out the same thing.

They were better positioned for growth in a contractual revenue sense after the recession blew up the industry’s commis-sion-based compensation model.

The impact of this diversification move can’t be underestimated. For CBRE, outsourcing accounts for as much as 40 percent of revenue for the publicly-traded company.

“We’ve been looking at the evolution of the real estate outsourcing industry through the lens of the evolution of other outsourcing industries like IT and BPO,” Concannon relates, pointing to major M&As like HP’s acquisition of EDS. “Listen and learn” from other industries is the guideline he follows as our industry’s strategic alliance model matures. The same approach enables CBRE to apply its Fortune 1000 client experience to help mid-cap companies.

Scale MattersSmaller client companies are enter-ing the picture more for the globally integrated service providers - and so are smaller service provider partners -

Bill concannon

by richard kadzis

industry

tracker


whether growth is happening organically or from a steady stream of major mergers like CBRE did with Insignia or that JLL finalized with Staubach.

“One interesting theme is that clients need to be served consistently no mat-ter where they are or where they want to go,” Concannon observes. “In order to do this, service providers will have to fill their gaps one way or another. Still, it’s increasingly difficult for small- to mid-size service providers to build organically, especially when it comes to international capabilities.”

Why will supply-side industry consoli-dation continue then, even in the face of uncertain economic conditions?

“While there will always be a place for local providers, when it comes to serving the largest global (client) firms, scale mat-ters,” says Concannon. “That speaks to the continued consolidation of service pro-viders in the real estate services space.”

In fact, CBRE has an acquisition pending with ING’s real estate invest-ment businesses in Europe and Asia to consolidate that extensive portfolio into CBRE’s Real Estate Investment Management line of business, showing that the supply-side M&A beat goes on.

A Compelling Message to the C-SuiteWhile it’s not a corporate services deal, the thought occurs that “a rolling stone gathers no moss.” Even with an uncertain economic backdrop painted by nagging, high unemployment, ris-ing gasoline prices, Mideast discords, natural disasters and EU Sovereign-debt woes, there’s some confidence in the real estate capital markets again.

It also represents another opportunity

for service providers like CBRE to lever-age an integrated line of support services with multinational client companies.

“Now more than ever,” Concannon injects, “our clients are looking to us to be a thinking partner and sounding board for developing a medium to long-term strategic agenda for corporate real estate.”

Incorporating key pieces like brokerage, valuation, capital markets or strategic consulting into service delivery is the key outcome. Not only is this approach win-ning CRE clients more C-Suite attention, it’s resonating with the business units inside those same corporations.

The result today is that the CRE cli-ent is working with the service provider partner to craft what Concannon calls “a

compelling message our clients are eager to share with the C-Suite.” He admits that only five years ago, the notion of service provider “face time” with the CRE client C-Suite was seen as more of a threat to the client’s internal job secu-rity and less of a strategic value-add play.

“The recession forced companies to really ensure that they were getting the most out of all their service providers,” Concannon observes.

The growing emphasis on procure-ment management and RFPs – created by Sarbanes-Oxley – is now a manifesta-tion of the intense scrutiny placed on real estate assets by CEOs, CFOs, COOs and business lines.

The CRE function and outsourced

industry

tracker


strategic partners like CBRE are subject to the same scrutiny. One prime example is lease accounting standards and FASB 13, in which CFOs are relying heavily on CRE people and their partners to navigate the maze of data-gathering and technol-ogy challenges that await once FASB 13’s implementation actually happens.

These are all reasons why “there will continue to be more scrutiny along with the need for professional management.” It also means with the increased com-plexity of today’s environment, it’s cru-cial “to stay focused on things that drive performance,” according to Concannon.

“We’ve found more and more clients are open to a concept we call ‘Total Outcome Key Performance Indicators.’”

A Spaceless RecoveryThese higher-level types of KPIs target operating expense reductions but also account for business drivers like reduc-tions in retail store construction time, increased uptake of alternative workplace practices or leasing flexibility through early termination and contraction clauses.

Like others, Concannon sees real estate currently as being in a demand-driven recovery mode. One way this translates is even though corporate prof-its are way up and a lot of companies are sitting on hoarded cash, “corporate occu-piers will continue to look inward before taking on more space,” he says.

It’s become what Concannon terms “a spaceless recovery,” because corporations aren’t hiring to previous levels yet again, and they’re working with what they have – stressing the transformation of existing space along with flexibility. We’re see-ing how flexible workplace practices are now intersecting with leasing strategies and essentially redefining the meaning of portfolio optimization in that sense.

“There won’t be an ‘either-or’ direc-tive from the C-Suite regarding a focus on value protection vs. value creation,” Concannon predicts. “It will be a bal-ance of both,” harkening directly back to the classic ‘efficiency vs. effectiveness’ paradox. “The way to address this is by creating different layers of flexibility within the portfolio: flexibility in lease terms, flexibility in space utilization and flexibility in the way that facilities sup-port the working environment.”

On the other side of the downturn, companies are looking at the workplace as a way to improve productivity, as well as employee attraction, retention

and satisfaction. Yet things like accurate headcount forecasting or future space demand are “very, very hard to predict,” as Concannon advises. “While this infor-mation is still important, we’ve turned our focus to the supply side of the equa-tion, where flexibility in the workplace can really add the most benefit in a highly variable staffing environment.”

Focus Matters, TooChanging the standard metric of square feet per seat to FTEs per seat is another example of how the measurement of these changes is being linked more to the enterprise and to the needs of the business. It’s also a reason why CBRE places emphasis along with its clients on non-CRE skill sets like internal client relationship management (CRM).

It’s safe to describe the current dynamic as a sort of complex conver-gence; and that to be effective, we need to navigate through a kaleidoscopic world where multiple pieces and parts are constantly shifting.

After all, forces like social media and bottom-up consumerism can now impact a brand overnight. Real estate and the workplace are extensions of the brand, just as they are representations of corporate social responsibility.

“The more complex things get, the more focus matters,” Concannon asserts. “Our job is to help our clients make things as simple as possible by establish-ing priorities, executing flawlessly and highlighting our accomplishments in executive-level communication.”

To think that the blurring of all these lines includes today’s much more strategic positioning of service providers as trusted advisors is to also say that the supply side has evolved in step with the changing needs of the globally networked enterprise.

Will it ever end? Probably not!

corenet Global helped set context for Global service delivery model

see related content: the leader

magazine special edition, september-

october 2006: the evolving service

provider industry; Global service

delivery comes of age. this in-depth

analysis of the supply side’s growing

influence shows how the global ser-

vice delivery model we forecasted in

corporate real estate 2010 in 2004 was

actually achieved two years later.

“a big reason for the improvement

in the level of understanding of the

service provider value proposition

can be attributed to corenet Global

and the great job it’s done facilitat-

ing the dialogue between the service

provider and end user communities,”

comments cbre’s bill concannon.

knowledge center story link: http://

www2.corenetglobal.org/dotcms/

kcoasset?assetinode=853675

PARISCoreNet Global Summit18-20 September 2011

SOCIAL DYNAMICSCONNeCtIvItY : CReAtIvItY : ReLAtIONShIPS

Register Now at www.corenetglobal.org

Featuring General Session speaker euan Semple, Social Media expertCulture Connect: Social Media, the World of Work and You

Join Euan Semple as he shares how the world's largest and most successful organisations are integrating social media into their own environments. To learn more about speakers and breakout sessions, visit www.corenetglobal.org.

by megan mccann

career

development

Frank Kayden: His alternative road led Him to real estate

2011 tHe leader 88 s e p t e m b e r / o c t o b e r

Frank Kayden did not take the path of least resistance when it came to the world of corporate real estate (CRE) – specifically portfolio and facilities management – given that his career includes more than 20 years in information technology (IT).

“I definitely have a non-traditional real estate background considering the majority of my career has been in IT,” says Kayden. “My start in real estate came when Dow Chemical decided to consolidate its data centers into a cen-tralized model in the 1990s. I developed portfolio strategies and economic evalua-tions centered around that consolidation and provided a cost analysis of the situa-tion to the CRE team.”

Kayden adds that his process and IT background has been a great enabler for his current position as Director of Strategic Facilities Portfolio Management for the Dow Chemical Company.

“My function directly controls roughly 11 million square feet (1.02 million square meters) of Dow Chemical’s lab and office space,” he says. “My back-ground provided me with a good founda-tion for making appropriate business decisions, which is the key entry point into how I’ve become successful in my current position.”

Everlasting KaydenKayden received his undergraduate degree from Miami University in Ohio and his MBA from the University of Cincinnati. He’s been with Dow Chemical for more than 27 years, and has more than 20 years of experience in business case develop-ment and implementation leadership for both facility and information system integration projects.

He’s responsible for the management of corporate strategy for Dow Chemical’s global lab and office real estate portfolio, as well as alignment of facilities with corporate geography, business and func-tion strategies. In addition to his other responsibilities, he is the Director of Real Estate for Dow AgroSciences, a wholly-owned subsidiary of Dow. Kayden has also spent more than 10 years as Facilities Implementation Leader, where he com-pleted facility integrations for some of Dow Chemical’s major corporate acquisi-tions and divestitures.

Kayden adds he was involved in facili-ties management as part of his IT role. In 2004, he was one of three charter members of what was known as Dow Chemical’s Facilities Management Expertise Center. The team was put together to begin evaluating standards and processes and looked at best practices related to facilities, specifically office and laboratory. The creation of the lab and office facilities management function was a result of the efforts of the team and the facilities managers. Kayden was a central figure in creating this function.

Come Together Because of Kayden’s diverse real estate and technology experience, he’s been able to see firsthand how important the rela-tionship with CRE and the various busi-ness groups needs to be, especially as the workplace continues to evolve.

“As the workplace has transformed the past few years, real estate can no longer be seen as an afterthought or a necessary evil but instead a value-add,” says Kayden. “CRE has the opportunity to step up to the plate and not only be a

cost-effective resource, but also be agile and flexible in anticipating the needs of the business groups and adjust as the business adjusts.”

Having a comprehensive understand-ing of a company’s real estate portfolio, including a vision for the future, is most critical. Kayden says it’s good to be in the position to respond and provide a dynamic and cost-effective offering to your company.

He explains that sustainability, work-life balance and alternative workplace strategies all lend themselves toward CRE being able to anticipate those prac-tices and demonstrate to the C-suite that it can make a positive impact on the business versus sometimes being the last group to find out.

Connecting with CoreNet GlobalKayden is very active within CoreNet Global and is part of the Michigan Chapter. He received his MCR desig-nation in less than a year and has also obtained his SLCR designation. He’s an active participant in GlobaI Summits, Discovery Forums and both the Executive Leaders Council and Strategy & Portfolio Planning Community.

“In terms of optimizing a portfolio based on mergers, acquisitions and dives-titures, the key element is knowing what you have and where you want to go,” adds Kayden. “Being part of CoreNet Global has provided the various tools necessary for me to apply my strategy to go above and beyond the needs that have been identified by the business. And where I look to CoreNet Global, for example, is having the various tools at my disposal to help me.”

by david heaton

Frank Kayden, dow chemical


Leasing Rates (USD/SF/year)

Office** Industrial Office Industrial Office

North America

Chicago $25.71 $3.91 19.2% 10.5% 0.37%

Los Angeles $30.04 $6.50 17.6% 7.4% -0.26%

New York $56.70 $6.12 7.9% 10.0% 0.66%

Toronto $35.14 $4.69 8.2% 6.1% 0.45%

Washington D.C $49.63 $8.65 10.0% 16.4% -0.26%

Europe

Amsterdam $45.80 $9.43 17.5% n/a -4.07%Frankfurt $61.40 $9.54 17.6% n/a 0.32%London $148.52 $20.07 4.9% n/a 0.22%Moscow $97.55 $12.08 11.8% n/a 2.19%Paris $111.75 $12.12 6.7% n/a 0.13%

Asia

Beijing $51.90 $5.32 7.6% n/a 4.58%Hong Kong $192.01 $10.18 3.8% n/a -0.45%

Mumbai $80.54 n/a 6.5% n/a 3.44%Shanghai $42.13 $5.07 10.1% n/a 3.68%Singapore $86.02 $15.15 5.4% n/a 0.35%Tokyo $128.43 $21.84 7.6% n/a 0.25%

Australia/New Zealand

Melbourne $48.42 $8.18 6.3% n/a 2.82%Sydney $90.38 $12.50 8.2% n/a 2.40%Auckland $28.81 $9.50 13.3% 4.4% 2.30%

Vacancy Rates Net Absorption (%)*

real estate

dashboard2nd Quarter 2011

source: cb richard ellis Global research and consulting* defined as net absorption over occupied square footage in previous period

** office lease rates are prime; exception is North america (average asking)

and singapore and hong Kong (Grade a)

office lease rates are gross; industrial lease rates are NNN

North america: North america industrial sites reflect availability (not vacancy) rates

all stats reflect overall market (cbd and suburban) unless otherwise noted:

New York office includes midtown and downtown

New York industrial reflects New Jersey Northern stats

(no industrial market in NYc)

Washington, dc industrial reflects maryland suburban and Virginia

Northern markets; Washington, dc office reflects cbd only

International: mumbai office rent and vacancy rate reflects Nariman point cbd

tokyo office rent reflects Grade a office rent in marunouchi/otemachi,

while vacancy rate and net absorption reflect all Grading in tokyo 23 Wards

hong Kong office rent and vacancy rate reflect central cbd

singapore office rent reflects core cbd, while vacancy rate and net

absorption reflect core cbd, Fringe cbd and decentralised markets

australia vacancy is total for all Grades; vacancy and absorption data

is estimate only

auckland office stats reflect cbd only, and auckland industrial rents

reflect Grade a industrial vacancy and net absoprtion rates reflect

overall market

paris, hong Kong, beijing, shanghai, and australia industrial data

reflects Grade a warehouse

tokyo industrial rents and vacancy rate reflect warehouse facilities

singapore industrial rents reflect the average rent of warehouse facilities

Note: analysis provided reflects complexity of data requirements and

divergent country standards/customs and is not standardized within the

industry. please consult with your local real estate services provider for

further interpretation/recommendations.

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.

strategic partners

gold

silver

bronze

ECONOMIC DEVELOPMENT AGENCY

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.

global learning sponsors

asia pacific

north america - silver

by megan mccann

capital

corner

attractive Disposition alternative Delivers results

2011 the leaDer 92 s e p t e m b e r / o c t o b e r

Our team recently completed two large dispositions totaling just over one mil-lion square feet (92,903 square meters) of surplus real estate that delivered excel-lent results for their corporate owners. Both transactions were completed utiliz-ing a charitable method called a bargain sale. Unlike a total property donation, this is where a charity purchases a prop-erty at below the property’s established fair market value, which means the dif-ference between the charity’s purchase price and the established fair market value may be considered a tax deduction for the selling corporation.

Not a bad deal considering both facili-ties were wasting corporate resources financially and taking corporate manage-ment time – time that could have been put to more productive use.

Although both recent transactions were bargain sales, an outright real estate donation can achieve very close to the same result for the corporate owner, sometimes faster. In addition to working well for corporations, bargain sales and donations also work for LLCs, partner-ships, S corporations and individual property owners.

Ease of CompletionThere is a common misconception that donations and bargain sales are compli-cated transactions. This is not the case. Either disposition method is just like packaging any conventional sale, except with the charitable transaction, there are tax benefits available instead of cash. However, tax deductions do mean cash at some point and can be very valuable.

It’s important to remember the donor needs to establish donative intent and establish the property value by obtaining

a fair market value appraisal. The fair market value is the price a buyer would pay a seller, when both parties have rea-sonable knowledge and information per-taining to all facts and issues and while neither party is under any obligation to buy or sell. The property appraisal must demonstrate the highest and best use to which the property would be used in the current marketplace.

Information on how to establish mar-ket value is available in an IRS publica-tion that appraisers need to follow, and timing of the appraisal is somewhat important. A “qualified appraisal” neces-sary to substantiate a charitable contri-bution valued in excess of $5,000 must be made not earlier than 60 days prior to the date of the contribution of the appraised property. The appraisal also must be prepared and received by the donor before the due date of the return on which the charitable deduction is first claimed for the donated property. (See, Treas. Reg. section 1.170A-13(c)(3).)

The donation can give your corpora-tion client a tax deduction that can be used based on their adjusted gross income. The deduction has a limitation of 10 percent of adjusted gross income for corporations and a deduction limit of 30 percent for individuals, limited partnerships and S corporations. If the deduction cannot be used the first year, the unused deduction can be car-ried forward an additional five years. Generally, most of the large corpora-tions can take advantage of the entire deduction in the first year.

Process Works for All Property TypesIt’s true that donation and bargain sale

dispositions work well for harder-to-sell properties or those with special-use limitations, and they can be used for specially facilities, industrial proper-ties, office buildings, retail building and vacant land. Special-use facilities or those that may have a special manu-facturing process can work extremely well. Generally, these types of facilities appraise at high valuations.

It’s important to note that bargain sale transactions can work well for higher-value properties as well. For example, let’s say you have property on the market that appraises for $25 mil-lion, and yet you are receiving offers around $17 million. Why not bridge the gap with $8 million in tax benefits using a bargain sale and make this transaction happen?

The Value AddedThe utilization of a donation or bargain sale can add value to the overall disposi-tion in terms of dollars. When working with the right charity that knows how to package these kinds of sales, the transaction is generally quicker than your lower-value conventional sale. Generally, a bargain sale or donation delivers more after-tax cash to the trans-action. Both can be completed faster, which means considerable corporate sav-ings in terms of holding costs and liabil-ity. The property can be recycled faster and perhaps create jobs faster.

Ronald M. Peters is a real estate con-sultant with Peters & Associates. His primary role is managing donations and bargain sales of corporate surplus real estate for the National Emergency Medicine Association.

by ronald m. peters

SOCIAL DYNAMICSCONNeCtIvItY : CreAtIvItY : reLAtIONShIpS

Register Now at www.corenetglobal.org

AtLANtACoreNet Global Summit

6-8 November 2011

Featuring General Session speaker Andrew Zolli, Futurist and Global trends Consultant on Social Media for Business

Engaged at the intersection of culture, creativity, technology, and futures research, National Geographic Visiting Fellow Andrew Zolli is someone whose opinion Fortune 500 companies, private institutions, and government leaders seek when guessing could be costly.

To learn more about speakers and breakout sessions, visit www.corenetglobal.org.

members

on the

move


• According to www.globest.com, Jones Lang LaSalle (JLL) has won a five-year, up to $10-million contract with the National Aeronautics and Space Administration (NASA) – signed with the Technical Capabilities & Real Property Management division of NASA – to perform services and develop real estate strategies. JLL will focus on such activi-ties as trades, transfers, outgranting or out-leasing and ingranting or in-leasing.

• Ernst & Young has appointed Maureen Welch and Josh Herrenkohl to key leader-ship roles as part of the expansion of its Construction and Real Estate Advisory Services practice. Welch will lead the group’s national corporate real estate program and will focus on a wide range of services for global organizations across multiple industry sectors. Herrenkohl will lead the group’s real estate investor ser-vices team, where he will be involved in business and operational strategy, as well as technology planning.

• The Greater Fort Lauderdale Alliance CEO Council, the office of Governor Scott, Enterprise Florida and

the City of Sunrise worked together to help bring global manufacturing and technology company, Emerson, to Sunrise, Fla. Emerson has selected the city as the site for its Latin American regional headquarters and is initially leasing 18,000 square feet (1,672 square meters) of space in Lake Shore Plaza II, Broward County’s first LEED-certified multi-tenant office building. To receive state and local incentives, the company has committed to bring 51 high-paying jobs to Broward County and will invest about $2.2 million for construction and remodeling of the leased space and for the purchase of equipment.

• Karen League, ASID, LEED AP, has joined Jova/Daniels/Busby as Senior Vice President and Director of Interior Design. League has a background in design and workplace planning rang-ing from the creation of transformative office and education environments to extensive rebranding efforts.

• Savills has appointed John Gallander the new Director of Savills Hanoi. He has more than 27 years of real estate

experience, including five years in Vietnam, and his most recent position was with Newmark Knight Frank as Country Managing Director, Vietnam.

• Qube Global Software recently participated in a day of community ser-vice in the Greater Philadelphia area to promote facility management during World FM Day, which is promoted by Global FM and the International Facility Management Association. Qube part-nered with ACHIEVEability, a non-profit for the empowerment and education of low-income, single-parent families living in homeless shelters. Other participating companies included Haworth, Comcast, Pfizer, PNC Bank and Millicare.

• Jones Lang LaSalle has named 24 of its global colleagues International Directors, who are recognized for deliv-ering exceptional results for clients and driving the firm’s growth. Among those promoted include Michael McCurdy, Philadelphia; Sanjay Dutt, Mumbai; Shelley Frost, London; and Chris Hunt, Sydney.

• In the article “Connecting the Dots: The New Definition of Client for Economic Developers” in the May/June 2011 issue of THE LEADER, the authors discussed Citigroup’s global prototype campus, of which CLW Real Estate Services Group was an integral part. CLW coordinated the transactions for the temporary leases to accommodate the initial business unit relocations from Manhattan, as well as the ulti-mate purchase of the campus property.

connecting with corenet Global: see what members and member companies are doinG around the Globe

michael mccurdy maureen welch John Gallander Josh herrenkohl


coreNet Global’s Workplace transformation

GWs’ success with Johnson control’s Innovative transactional model

cisco’s alternative Workplace campus in bangalore

Ipd’s benchmark performance model for essex Fire & rescue

eXecUtIVe proFIle: John mcbain, pWGsc

eXecUtIVe proFIle: thomas bogle & brandon Forde, studley

In Our Next Issue:

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:

moNtreal, 5-6 october

MCR Seminar:

¡ Creating Value through

Workplace Strategies

toKYo, 6-7 october

MCR Seminar:

¡ Real Estate Transactions: Impact

on Corporate Financial Statements

atlaNta, 5-6 NoVember

MCR Seminars:

¡ Enterprise Alignment

¡ Corporate Real Estate Finance

¡ Real Estate Transactions: Impact on

Corporate Financial Statements

¡ Advanced Lease Analysis

¡ Portfolio Management

¡ Real Estate Outsourcing: Trends & Models

for Service Delivery

¡ Enabling Workforce Mobility: Perspectives

on Technology, Physical Solutions and

Change Management

¡ Sustainable Strategies: Corporate

Real Estate Portfolios

SLCR Seminars:

¡ Change Leadership: Strategy,

Implementation & Best Practices

¡ Positioned for Success: Designing

the Optimal Corporate Real Estate

Organization



¡ Enabling Workforce Mobility:

Perspectives on Technology, Physical

Solutions and Change Management

loNdoN, 9-10 NoVember

MCR Seminar:

¡ Corporate Real Estate Finance

aUcKlaNd, 14-15 NoVember

MCR Seminar:



melboUrNe, 17-18 NoVember

SLCR Seminar:

¡ Leadership & Strategy

baNGalore, 24-25 NoVember

MCR Seminar:

¡ Portfolio Management

INdeX oF adVertIsers

aeroports de montreal 49

arkansas 47

arthur J. rogers 37

atlanta chamber of commerce, metro 51

colliers International 3

coreNet Global (atlanta) 93

coreNet Global (Fm benchmarking) 41

coreNet Global (paris) 87

coreNet Global (thank You pages) 90-91

cornerstone ed 74

cushman & Wakefield 65

ems software by dean evans & associates 28

Fischer 96

Ft. lauderdale alliance, Greater 69

Georgia emc 72

hoosier energy 63

InterfaceFlor 57

Johnson controls, Inc 7

Knoxville-oak ridge Innovation Valley Inc. 5

lubbock eda 50

mississippi development authority 71

Nebraska public power district 67

ocala llc 23

ontario, city of (ca) 11

opus 48

oshawa, city of 24

oswego county, Inc 25

panchshil realty 19

pasco edc 73

rancho cucamonga, city of 61

regus 2

rockefeller Group development 67

san antonio edF 66

san bernardino county, econ dev agency 9

sIor 35

sodexo 31

southwest louisiana eda 77

tandus 45

tulsa metro coc 43

UGl services 39

Union Investment 13

Virtual premise 29

a looK

ahead

the leader - september october 2011.pdf

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