volume 1 0 , issue 5

corporate real estate & workplace

september / octob e r

11

workplace strategies in asia

(page 20)

barclays sustainability enterprise

(page 26)

verizons tanya penny

(page 54)

Shifting to a Knowledge-Based Economy

(page 12)

How do you measure the business benefits of virtual working?

With an increasing adoption of alternative working models, traditional methods of measuring workplace performance in $ per square foot or the ratio of desks to people are becoming irrelevant. organizations need a new way of understanding the costs of doing business as well as demonstrating and monetising the benefits.

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Leadership
ediTOrial sTaff Richard Kadzis ediTOr Chelsie Butler manaGinG ediTOr Bailey Webb seniOr cOnTribuTinG ediTOr David Heaton seniOr research/ediTOrial assOciaTe Tim Venable seniOr adVisOr adVerTisinG & PrOducTiOn sTaff Bonnie Hofto creaTiVe direcTOr Anne Hardy adVerTisinG manaGer Michael Mooney adVerTisinG manaGer Tim Abrams adVerTisinG manaGer THE LEADER, CoreNet Globals Official Publication, is published six times a year, as a bi-monthly publication commencing January/February, by CoreNet Global. Subscription rates for non-members (in U.S. dollars): = in the United States, $75; in Canada, $85; outside North America, $95. To order, contact Nicki Williams at 404589-3241 or nwilliams@corenetglobal.org. Office of Publication: CoreNet Global, 2500 Broadway St, Ste 200; Boulder, CO 80304-4237. The opinions expressed in this publication are not necessarily those of the association. THE LEADER is sent as a benefit of membership to all members of CoreNet Global. Articles published in this magazine may not be re-printed without written permission from the Editor. Editorial inquiries should be addressed to Chelsie Butler at cbutler@corenetglobal.org. POSTMASTER: Send address changes to: THE LEADER; 2500 Broadway St, Ste 200; Boulder, CO 80304 or leader@corenetglobal.org. ediTOrial Offices CoreNet Global 133 Peachtree Street, NE, Suite 3000 Atlanta, GA 30303 Phone: +1.404.589.3219 Fax: +1.404.589.3202 Web: www.corenetglobal.org adVerTisinG & PrOducTiOn Offices CoreNet Global 2430 Broadway, Suite 200 Boulder, CO 80304 Toll Free: 866.362.4181 Phone: +1.303.565.4023 Fax: +1.303.443.6943 E-mail: leader@corenetglobal.org cOreneT GlObal bOard Of direcTOrs Your leadership makes the difference. Matthew J. Fanoe, Chair Vice President, Real Estate Coca-Cola Refreshments, Inc. Jim Scannell, Chair-Elect Senior Vice President, Administrative Services The Travelers Companies Dino S. Piccini, BCCR, Treasurer President, Global Corporate Services DTZ Lee R. Utke, MCR, Immediate Past Chair Director, Global Corporate Real Estate Whirlpool Corporation Erica Chapman, Esq. Vice President, Real Estate & Facilities inVentiv Health Maureen Ehrenberg Global Director of Facilities Management, Global Corporate Services CB Richard Ellis John Forrest CEO, Corporate Solutions Asia Pacific Jones Lang LaSalle Philip Grossberg, LEED AP Managing Director, Global Corporate Services CB Richard Ellis Lydia Jacobs-Horton Director, Global Facilities & Real Estate Procter & Gamble Mark Nicholls Consultant Charlotte, NC Stephanie Pater Senior Managing Director Catalyst Group Partners Tanya Penny Vice President, Real Estate Verizon Services Operations Steven Quick Vice President & General Manager EMEA Johnson Controls Mark Schleyer Vice President, CRE Asset Management & Transactions AT&T Services Randy Smith, MCR Vice President, Real Estate & Facilities Oracle Tony Shou Fat Wong, MCR Director, Workplace Resources, APJ Corporate Real Estate Cisco Systems

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assOciaTe direcTOrs Jessica Beers Senior Director, UGL Services T. Patrick Donnelly Principal, BHDP Architecture Gina Rizzo Global Client Relations, Herman Miller Robin Ronne Managing Director, CEO Council Greater Fort Lauderdale Alliance leGal cOunsel TO cOreneT GlObal David Goch Webster, Chamberlain & Bean ediTOrial adVisOry cOmmiTTee George Bouri, MCR, SLCR Consultant, New York Del Boyette Principal, Boyette Strategic Advisors Ian Cameron Managing Partner, Intresinc Barbara Donaldson, CFM, MCR Vice President, Global Real Estate & Facilities Synopsys Larry Ebert Executive Vice President, Project Management Grubb & Ellis Scott Foster, MCR Senior Vice President, Corporate Workplace Bank of America Roger G. Gaudette Director, Asset Management, Ford Land Thomas Glatte Corporate Real Estate Management, BASF Group David Kontra Manager, Real Estate Operations, General Electric Rick Kriva Vice President, Global Real Estate Honeywell Richard M. McBlaine Chief Executive, Strategic Consulting Jones Lang LaSalle Keith Perske Principal, eBusiness Solutions Robin Ronne Managing Director, CEO Council Greater Fort Lauderdale Alliance Jim Scannell Senior Vice President, Administrative Services The Travelers Companies Tony Shou Fat Wong, MCR Director, Workplace Resources, APJ Corporate Real Estate Cisco Systems

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Green things grow in the Valley.

Its not surprising that, here in one of the most beautiful areas of the country, we put a high value on environmental industries. Tennessee is the leading state east of the Rockies for companies involved in the production of solar panels and systems. And the Department of Energys designation of Knoxville as a Solar City is another step forward. With the resources of Oak Ridge National Laboratory and a pro-business environment, your company is bound to grow. Learn more at knoxvilleoakridge.com

Success. Its in our nature.

se pt em b e r oct ob e r

volume 10, issue 5

corporate real estate & workplace

septem ber / october

11

THE LEADER Online!

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

11

barclays sustainability enterprise

(page 26)

workplace strategies in asia

(page 20)

verizons tanya penny

(page 54)

Shifting to a Knowledge-Based Economy

(page 12)

12

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

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

16

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

special feature: riding the Green Wave:

sustainable practices pay dividends for cities and real estate providers

60

20

embraciNG chaNGe: Workplace Strategies from an Asian Perspective

special feature: back to the future:

New twists on long-standing industries and emerging technologies shape southeast u.s. economc development

68

26

carboN maNaGemeNt: Barclays Takes a Sustainable Journey

special feature: innovation valley:

partners for Your business success

80

Industry Tracker

84

30

outsourcing pioneer bill concannon

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

Career Development
dow chemicals frank Kayden

88

Dashboard

89

36

2nd Quarter 2011

40

the evolutioN of busiNess coNtiNuitY aNd risK maNaGemeNt: What Are the Implications for Corporate Occupiers? corporate real estate best practices: A Methodology to Effectively Benchmark Performance

Capital Corner
attractive disposition alternative delivers results

92

departmeNts:
leadership message from the ceo real estate in the News members on the move a look ahead In our Next Issue Calendar of Seminars Index of Advertisers 4 8 10 94 95

46

buildiNG the fouNdatioN: A Successful Client/Provider Relationship

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Message froM the ceo by angela cain, ceo

out with the old, and in with the New:

WelcoMe collaboratioN!
When I became CEO of CoreNet Global a year and a half ago, it became apparent 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 GeorgiaPacific 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 percent, 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 transformation we have undergone, which will also include a list of all of the contributing 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,

a view of coreNet globals buzzy zone on the left and the Quiet zone on the right

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, enterprise leadership, location strategy and portfolio optimization. A work team dedicated to each segment will meet initially at the AT&T offices in Dallas in August and will collaborate 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

the breakroom

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.

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ECONOMIC DEVELOPMENT AGENCY

Where Americas Future

County of San Bernardino Seize the AdvAntAge

works

1 million strong workforce 12th largest county in the US (population) One of the fastest growing metros in the nation Southern Californias diverse housing options, creating an affordable quality of life Young Population - Median Age 31 Innovation Corridor of 18 Colleges & Universities, many ranked at the top of Americas Best Colleges

The Inland region of Southern California continues to show the most explosive growth in the State, proven once again by recent County San Bernardino is where Americas future lives, shops and works. Located at the heart Census Bureau figures. The County ofof San Bernardino Economic Development Agency of Southern California, the County of San Bernardino has what employers need: accessibility, workforce and quality of life.
385 N. Arrowhead Ave. San Bernardino, CA, 92415 Learn more: www.SBCountyAdvantage.com and www.SBCountyBuzz.com 909.387.4700
Josie Gonzales, Chair, Fifth District Supervisor | Brad Mitzelfelt, Vice Chairman, First District Supervisor Janice Rutherford, Second District Supervisor | Neil Derry, Third District Supervisor Gary Ovitt, Fourth District Supervisor Gregory C. Devereaux, Chief Executive Officer Mary Jane Olhasso, Economic Development Agency Administrator - molhasso@eda.sbcounty.gov County of San Bernardino Economic Development Agency 385 N. Arrowhead Ave., Third Floor San Bernardino, CA 92415 909.387.4700

real estate in the news

Atlanta Landmark Restored for Better Use

Jamestown Properties has purchased Atlantas historic City Hall East for $27 million and plans on investing another $180 million to restore the 2.1-millionsq.-ft. (195,096-sq.-m.) property into a mixed-use development called Ponce City Market. The 45-acre (18.2-hectare) property 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

photo by white tengbom team

development subsidiary, Green Street Properties, and will have an emphasis on preservation, sustainability and neighborhood connectivity. The project will be open to the public in early 2014, and the team will restore its former character 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.

open in 2016. The NKS will feature 600 inpatient beds, 100 outpatient beds, 36 operating rooms and eight radiation bunkers and will be designed to meet healthcare and research demands for up to 100 years with an environment that caters to strengthening interaction among healthcare, research and education. Its buildings will be planned so they can be durable and flexible when adding new advances in technology. 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.

Inc.s relocation from Silicon Valley to St. Tammany Parish, P&Gs expansion in Rapides Parish, Chases 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 LSUs 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 capabilities that will support LSUs academic research efforts related to digital media and software development.

Hong Kong Welcomes Robust Retail Market

According to recent research from Savills, Hong Kongs retail market has had an influx of international high-street brands and a strong expansion in touristrelated 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 consumer sentiment and record numbers of tourists, retail sales boomed in May and June 2011. May is also reported the thirdhighest month on record after December 2010 and January 2011.

Louisiana Earns Top Honor as the Souths State of the Year

For the third year in a row, Southern Business & Development (SB&D) magazine has recognized Louisiana as State of the Year in the South. Other top-ranked states include Kansas, North Carolina and Tennessee. Several of the states communities also earned honors from SB&D. Louisiana announced a variety of projects and expansions in 2010, including Nucors new iron and steel production facility in St. James Parish, Globalstar

$2.5-billion Hospital to Open in Sweden

The 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

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ed huante national Manager toyotas north american Part Center California

OUR ONTARIO LOCATION IS KEY TO OUR SUCCESS

The freeways in Ontario offer ease of access to the ports which is vital to our import of parts from Japan. The proximity to the Ontario International Airport allows us to ship parts overnight for next day delivery to the East Coast. By choosing to locate in Ontario, we are able to provide the highest level of service to our Toyota customers. Improving customer service, while reducing cost - its how Ontario gives us the competitive advantage.

OntariO, CalifOrnia. We think BUSineSS.

www.ontariothinkslogistics.com 909.395.2005

MAYOR PAUL S. LEON I MAYOR PRO TEM DEbRA DORS T-PORADA I COUNCIL MEMbERS I AL AN D. WAPNER, ShE IL A MAU Tz, JIM W. bOWMAN

REal E statE ManagEMEnt

cOv E R

stORY

Knowledge-Based Economic Development: Measuring the Talent Pool for Innovation Capacity
BY anDY sHaPIRO

ith the growing attention to the competitive advantages of a knowledge-based economy has come a renewed focus on innovation as the process that can transform information into value and thus spur growth and development. This pursuit of knowledge-based economic development has intensified 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

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 destinations labor assets.

New Metrics for a New Economy

The basic principles of economic development 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 hasnt changed; though the nature of the inputs certainly has. For example, land was once measured by its natural resources, its proximity to shipping infrastructure and its suitability for industrial production. While those factors still matter,

a sites proximity to core knowledge and information infrastructure (such as universities and research institutes) and suitability for research parks and laboratory 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 government 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 increasingly their knowledge of science, technology, engineering and math, as well as their skill in bringing new ideas to market, that creates value for a company and its community.

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Sustainability isnt just a question of materials, its a whole mindset.

Union Investment is sustainability.
Sustainability has many aspects, with greenness being just one. Its 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

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

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 bachelors degree population age 25-64 years with some college or associates 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 bachelors 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

What Human Capital Dimensions Are Measured?

Over the centuries, standardized methods have been developed to gauge the important aspects of land, capital and labor inputs. However, the evolving nature of innovation often defies measurement by the more traditional standards. Rather, dozens of methods

have been developed and perhaps none so abundantly as those metrics that attempt to assess the contributions of human capital to an areas innovation economy. A sample of these North American measures and their advantages and drawbacks is described below. New Scientists and Engineers. The objective of this metric is to depict the

ability of a region to generate new ideas and commercialize new products or services. 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, technology 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 technical 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 metric 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 reasonable assumption that workers with more knowledge are the most likely to innovate. 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 college nearby or where they reside now. Perhaps a better metric would be data describing the number of students having taken advanced placement or international baccalaureate courses. Number of persons employed in high-tech industries (using NAICS the

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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 machinery, 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 particular destination. However its important that users distinguish between occupations engaged in the social sciences versus those focusing on the physical or natural sciences (e.g., biologists, analytical chemists). Distinction should also be made between the scientists and engineers who design and direct much of the actual discovery and development processes and the various technicians who often lack an advanced degree and whose primary mission is to assist and report the results.

Examples of Innovation Indices

Over the years there have been numerous 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, including The Indiana Business Research Centers Innovation in American Region, the John Adams Innovation Institutes Index of the Massachusetts Innovation Economy and Jeremy Halls (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 expenditures; 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 states 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 bachelors or higher degrees; high school attainment of 19- to 24-year-olds; public investment in K-16 education; and specific science, IT and engineering degrees. The result is a terrific tool for policy makers that also plays an important role marketing the state. Halls 50-State Indices of Innovation Capacity and Commercialization Capacity is more of an academic ranking than the other two indexes discussed, 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 capital 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.

Conclusion
Creativity and the capacity for innovation 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 developers alike develop new methods to identify and quantify those attributes (education, proficiencies, entrepreneurial skills and spirit) that can distinguish a truly innovative 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.

About the Author

Andrew Shapiro heads Biggins Lacy Shapiro & Companys location advisory practice, helping 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.

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. Attracting and Inspiring the Knowledge Worker http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11000363 Keeping Pace with a Changing Work Force: The Right Mix of Programs and Incentives Can Attract Top Talent http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11227371

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REal EstatE ManagEMEnt

London Bridge Quarter: A New Business District Will Regenerate Central London
BY BaROn PHIllIPs anD MaRK HOlMEs

estern Europes 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 Pauls 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 Londons 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 station and bus concourse. LBQ has been master planned and designed by one of the worlds leading architects, Renzo Piano, and reflects the vision and drive of developer Irvine Sellar.

Revitalizing London Bridge

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 dramatically over the last 10 years, and is it becoming vibrant and dynamic, increasingly 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 Londons gourmet centers, attracting people from all over the city. Part of the regeneration success over the past 10 years has been London Bridge Stations improved transport links, which include the addition of a key East-West under-

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 stations infrastructure are completed. While London Bridge Station is an aboveground 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 Shard

Along 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 infrastructure that links the properties to each other and to the adjacent transport links. The two buildings are being completed during a time when there is an acute shortage of international standard

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

Grade-A office buildings available for lease. It is estimated there will be a spike in demand for new accommodation 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 Britains ability to create both remarkable architecture and practical infrastructure and is expected to be Londons 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

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

Sellar believed that the redevelopment of the office building into a serious 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 Project Background Ironically, it was London Bridge Stations Arup to overcome some of the issues presented by the sites proximity to status as a key transport hub that was both London Bridges above-ground and the catalyst behind the LBQ developunderground networks, as well as to ment. In 1999, the British Government ensure a neutral impact on the Shards published a white paper that stated that direct environment. proposed developments of tall buildings But it has never been plain sailing. on or around major transport hubs would Aside from the difficulties in securing be looked upon favorably in planning planning consent, Sellar was on the terms. A year earlier, Sellar and two partners had acquired Southwark Tower, verge of finalizing the financing of the project when the financial markets cola 1970s office building adjacent to the lapsed following the demise of Lehman. station and occupied by international Within fairly short order he found alteraccountancy firm PwC.

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

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

London Bridge station (photo provided by sellar property)

native backers and finance, as the state of Qatar became his development partner, and Qatar National Bank provided construction 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 simultaneously, 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 Londons skyline, 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 largest speculative development currently underway in London, and it is being delivered at a time when the capitals market needs buildings of this quality to serve tenants needs well into the 21st century and beyond.

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. DTZ Property Times Central London Q1 2011 http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11339267

about the authors

Baron Phillips is public relations consultant for LBQ Ltd., an international joint venture between the State of Qatar and Sellar Property. Mark Holmes is Maces COO, Consultancy, and has been developing the companys corporate real estate partnerships and entry into the North American market. London Discovery Forum 25 May 2011 Final Summary Findings Report http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11527882

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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 Campus spread Total built-up area Built-up area delivered Typical Cluster Break-up Total built-up area Wings 1 & 4 Wings 2 & 3 Typical floor expanse Clients

: 45 acres : 4 million sq. ft. across 4 clusters : 2 million sq. ft. : 1 million sq. ft. : 170,000 sq. ft. each : 280,000 sq. ft. each : 30,000 sq. ft. / 35,000 sq. ft.

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, Vodafone India Services, Zensar Technologies.

Support Services 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, ATMCitibank and more.

For more information on EON Free Zone : Call : +91 90110-13347 / +91 98238-02563 Email : nitin.lahoti@ap.cushwake.com : praveen@panchshil.com : info@eonfreezone.com / www.panchshil.com

REal EstatE ManagEMEnt

Embracing Change: Workplace Strategies from an Asian Perspective

BY DEREk MackEnziE

doubt if there is a person in the developed world who hasnt heard that Asia is advancing economically 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 people of the worlds 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 interface never before seen or experienced. Thousands of foreign companies are being introduced into Asian economies every year, and by and large, they are

welcomed. Many Asians join these companies, which are nearly always managed 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 contemporary 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 observations 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 successful the Asian organizations might be, but it is interesting to note the differences that exist among the work environment types in the Asian context.

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 planning 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 practices in Europe and America throughout the 80s/90s. 1. The business has been successful so far, so whats 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 crucible for innovation.

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3. The traditional office structure is very much entrenched in the value perception of management status and hierarchy. 4. New-age workplace practices, processes 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 technology 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 After

In understanding these reasons, it is necessary to recognize that Asia, as an economic force to be reckoned with, is very young. This period of Asian ascendancy began with Chinas economic transformation in the 80s. Indeed, China didnt really pick up steam until after it was welcomed into the WTO in November 2001. And India, with a behemoth population, started its own growth story about 10 years behind Chinas (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 increasing 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 Asias emerging fortunes are currently (largely) driven by trade, their own resources and low-cost productivity 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.

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

billion U.s. dollar

2500
east asia the U.s. euro-zone china Japan

2000

1500

India aseaN-5 Korea

Asia as a Gigantic, Yet Disparate, Region

Relating 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,

1000

500

0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

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

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Embracing changE: WorkplacE StratEgiES from an aSian pErSpEctivE

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

chart 2: growth in mobile technology

2011 pc and non-pc Sales

150

375 200

50

40

pc desktops non-pc tablets

laptops

netbooks

Smartphones

Source: deloitte & touche tohmatsu limited, 2010

where foreign commercial interests have had the most effect over recent decades. Multi-national corporations in these two global cities import best-practice theories and practices, which in turn become benchmark standards for local companies and even governments. It is notable that many of the countries of Asia have only one major city that is the center of business and politics, 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 growing, are not known as international leaders, being largely agricultural economies 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 investment and the establishment of international manufacturers and banking, trade, media, production and engineering service industries.

The importation of global standards and workplace strategies is laudable from many points of view. One of the most obvious advantages is the predictability of any renovation outcome. Others include the quality and productivity of workplace environments, positive contribution to recruiting efforts and continuity of corporate goals in sustainability, 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 competitive cost standpoint.

Ready for Change

Nevertheless, the landscape is changing in Asia. Workflows and patterns are adapting to better suit a new era of information sharing, and this is providing distinct competitive advantages. The term collaboration is no longer restricted to a group of people huddling together over coffee to brainstorm a

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Embracing changE: WorkplacE StratEgiES from an aSian pErSpEctivE

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., according to the Economist Intelligence Unit Limited 2011, as Asians bring their personal 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 todays achievers, social life is also making its presence in the workplace. The lines that used to be clear between the time spent working and the time spent socializing are increasingly fuzzy. As a result, both the workplace and social spaces are adapting, and aspects of each are beginning to look similar.

Case Study: Hindustan Unilever

When 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 international brand identity. Through the planning and design process, workspace strategies were developed to help Unilever with some glaring issues: Many people within the same organization didnt know each other. This was partly because of the physical distance between office locations. Team spirit was not optimized as a strategic imperative toward collaboration and high productivity. There was a high (although unintended) tendency toward disruption when visitors attended internal meetings. The number and location of meeting 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 onthe-go, ad-hoc conversations or informal information/opinion sharing). By bringing Unilevers 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

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people. The right connections.

The right The right

place.

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 communicate 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 constant business and social discussion. The bridges crossing the atrium were positioned in various angles to promote visibility, and each ends at a Brand Verandah where a variety of meeting or lounging opportunities 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 informal workshops.

Moving Forward
Workplace 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 fascinated 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 worlds 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 companys response to todays hyper-competitive 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 dcor is the result of new attitudes toward what stimulates team spirit/loyalty, encourages energetic activity and provides job satisfaction. In Asia, it can be awkward or even difficult for the designer

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 new or relocating business. Let us help you find YOUR right place in Oshawa.
City of Oshawa, Economic Development Services 1-800-667-4292 I business@oshawa.ca I www.oshawa.ca

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EmbrAcing chAngE: WorkplAcE StrAtEgiES from An ASiAn pErSpEctivE

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 owners acceptance or even the desire to drive the need for change. In Asia, much of the initial success experienced by these emerging economies is attributed to the efforts, entrepreneurialism, risk and drive of individuals, families and a few government-linked companies. As a consequence, 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 responsibilities of a newly globalized world economy in which Asia is very much a focal point and agent of change.

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. Leveraging a Talented Workforce Across Asia http://www2.corenetglobal.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 Era http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11232301

About the Author

Derek Mackenzie is the Managing Director at Designphase DBA.

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REal E stat E ManagEMEnt

Carbon Management: Barclays Takes a Sustainable Journey

BY noRa PoPEscu-KiRBY

he 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 strategic priorities. Our citizenship performance is measured in three ways: the approach we take to doing business, the contribution we make to economic growth and the support we give to communities. A key element of the positive contribution 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 challenge 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-

nents. Our top 60 buildings (by energy consumption) 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 emissions (29 and 30 percent), while our South African subsidiary ABSA has a higher percentage (41 percent).

Our Carbon Footprint around the World

The 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 emissions 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 footprint (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

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, virtualization 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 certified 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-efficiency 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 reporting protocols, we managed to stabilize the

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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.

Chart 1: Barclays Carbon Footprint around the World

Barclays Carbon Map (2010)
Data centres 37% Mixed buildings 38% Offices/other 25% Retail network/other

CRC Energy Efficiency Scheme

Recent 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 emissions 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 addition, 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 participate 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 sector 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 comprehensive data-driven rankings for the worlds largest firms.

Top 60 buildings 44%

Rest of the buildings 56%

Building Type
aBsa 41%

Buildings 88% Retail Bank 29%

Travel 12%

Clusters

C02 (1,103,000 tonnes)

Investment Bank 30%

Geography

africa 46%

UK 30%

Rest of the World 24%

Chart 2: Barclays CRC energy-efficiency scheme

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 emissions from our operations and then offsetting 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 carbon neutrality in 2009. We are certified to the ISO14001 stan-

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 environmental impact of our global operations. The firm-wide Built Environment and Sustainability Steering Committee has been a key component of this. It was set

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Carbon ManageMent: barClays takes a sustainable Journey

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 material 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) emissions 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

Giving more focus to other performance areas like water, paper, waste Extending best practices and processes across our global portfolio By managing our environmental footprint, we support our wider corporate 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.

about the author

Nora Popescu-Kirby is responsible for sustainability within the overall Barclays property mandate, which involves the development of groupwide sustainability performance; progressing a development agenda; and managing group-wide policies, standards, controls, systems and processes.

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. Carbon Disclosure Project: Global Report on C40 Cities http://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=11638948 Discovery Forum - Oct 2010 - Twin Cities - Target Presentation: Targeting Carbon Management in Corporate Real Estate http://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=10385477

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Corporate Real Estate Executives

Reactive?

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Which are you going to be?

Will you be ready well in advance for the anticipated - and fast approaching FASB lease accounting changes? Have you captured and validated all required information for real estate leases and non-real estate leases such as ofce and manufacturing equipment, computers, eets of cars and trucks, etc.? 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?

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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 lease accounting changes at 404.969.1278 or jdooley@virtualpremise.com
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REal EstatE ManagEMEnt

Building the Bridge: Positioning Real Estate for the New Corporate Metrics
BY JanicE BaRnEs, caRolYn RoosE and KEith PERsKE

eeting the needs of the companies we support in an environmentally sustainable 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 responsibility (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 attention 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 presence when investors, non-profits and networks, such as the UN Principles for Responsible Investment, connected envi-

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 JantziSustainalytics 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 companys stock. With an immediate strategy position to consider, organizations are shifting their attention to CSR and its value proposition. Its more than reporting; corporate leaders now seek alignment throughout their companies to ensure that reporting is not de-facto but instead focused on performance targets that contribute to industry evaluation. This shift increases pressure on CRE decision-making. As a result, CRE leaders are now tapped to contribute to the overall CSR position of an organization, including the

development and ongoing maintenance and measurement of an organizations 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 number of the broader indicators such as employee transport, employee health/ well-being and community involvement. 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 overall CSR performance goals. This reduces risks while improving performance.

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

How Does CRE Increase Influence in CSR?

Traditionally, CRE executives have focused on drivers such as asset value and tenant satisfaction. As CRE executives 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 worlds most widely used sustainability reporting 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 worlds most widely used framework, the gri increasingly demonstrates a stronghold on the market share of those reporting.

able practices, CREs influence in an organizations strategy grows. To create a meaningful CSR report, an organization 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 company performance. As a way of understanding 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 programs 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/wellbeing and community involvement can

be measured, reported and potentially influence corporate decision making.

CSR Reporting Components

1. 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 specifically 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 reduction from its pilot mobility programs. Key metrics included carbon tons reduced from employee commutes and

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

further reductions from building operations. (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 increasing 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 commuter 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

of a day. Finally, because of challenging weather and unexpected transportation 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 challenges 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, operating in and exiting. Typically, CRE does not report on community involvement/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 locations, these same studies could be leveraged to confirm reduced vehicle miles traveled aligned with AWS participation rates by community. These impacts provide a positive net effect across many CSR components and in turn offer an extended material issue

what iS a CSR RePoRt?

a Corporate Social Responsibility (CSR) report is an increasingly integral component of an organizations relationship with its stakeholders. 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, including marketplace pressure, brand value and risk management. Some organizations create reports based on internally developed indicators, and others rely on third-party frameworks, 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 companys credibility, transparency and endurance. this is not a fringe interest. in fact, 81 percent of all companies have CSR information on their websites.

Mobility Contribution to CSR Reporting - 6/29/11

EmployeeTransport ESGComponent EnvironmentalReporting Howemployeesgettoandfromworkandamong AreaofInfluence Health/Wellbeing LaborPractices&ProductResponsibility
Thedegreetowhichemployeesareenabledtobalancetheir workandpersonallives,reducedabsenteeism,business continuity

CommunityInvolvement Society

Practicesthatassessandmanagetheimpactsofoperationson facilitieswithinthecompany communities,includingentering,operatingandexiting;thedegreeto whichemployeesareabletoprovidetimeandenergytosocialprojects outsideofwork Mobilityprograms1)provideflexiblehourstoallowemployees Mobilityprograms1)reducevehicularemissionsfromcommuting,2) MobilityProgramImpact Mobilityprograms1)enableworkfromhomethat eliminatescommutesentirelyonetofivedaysaweek,2) tomakechoicesaboutwhentheywork,enablingthemtomake enableemployeeswhosavetimeoncommutingtochoosetodedicate offerflexiblehoursthatenabletravelatlesscongested choicestomoreeffectivelybalancetheirworkandpersonallives someofthattimetosocialprojects,3)useflexiblehourstodedicate and2)enableemployeestoworkremotelywhenweatheror timesoftheday,shorteningcommutes,3)reduce timetosocialprojectsduringtraditionalworkhoursandcompletework transportinterruptscommutes. constructiondemand. assignmentsduringnontraditionaltimes. MetricsUsedNow Vehiclemilestraveled(NOX,VOCs,CO2),CO2grams/mile, Commutecostsperyear(hoursand$),absenteeismdays/hours, Vehiclemilestraveled(NOX,VOCs,CO2),CO2grams/mile,volunteer SF/personrequired,operationscosts/SF,windshieldtime, resilience/lostdays,commuterstressmeasures hours cost/persontelecommuting,parkingspace/SF

CREshouldReporttoCSR 1)Thenumberandlengthoftripsthatarebeing
shortenedoreliminated,2)thereductioninnumberof milestraveledbymonth,3)theconstructionavoided CSRReportsandMobility MostESGreportsdonotaddressemployeemobility programsintermsofCO2reductions,reduced constructionrequirementsorlosttimebecauseoftravel.

MessageCRENeedstoSendtoMobilityprograms1)reducevehicularemissionsfrom CSR commuting,2)enhanceothercompanysustainability

effortsandreporting,3)areleveragedinexternal marketing/messaging,4)canbeusedasaboostto recruitmentandretention,5)reduceconstruction demand.

Employeesatisfactionsurveyresponsesmeasuringtheimpactof 1)Thenumberandlengthoftripsthatarebeingshortenedor 1)mobileworkandflexiblehours,2)absenteeism,3)lostdays, eliminated,2)employeeinvolvementincommunityprogramsand 4)commuterstress relationshiptomobilityandflexiblework. MostESGreportsdonotaddresslaborpracticesandproduct MostESGreportsdonotaddressemployeetravelemissionsor responsibilityrelatedtomobilityorissuesofresilienceincaseof volunteerism. stormsorothertransportrisks.Thesereportsalsodonotreflect recruitment/retentiontiedtoemployeesatisfactionandoverall healthaspectsofmobility. Mobilityprograms1)reducecommuterelatedstressin Mobilityprograms1)reducevehicularemissionsfromcommutingand employees,2)reducevehicularemissionsfromcommuting,3) 2)providescheduleflexibilitytoallowemployeestocontributetimeto enableemployeestobetterbalancetheirworkandpersonal theircommunityduringhoursthatmakesense. livesbymakingchoicesabouthow,whenandwheretheycan contributeandbeproductive,thusreducingjobrelatedstress, 4)bolsterbusinesscontinuityplans.

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

about the authors

sustainability is a part of a larger corporate social responsibility (Csr) agenda that is increasingly shaping decisions at many companies.

Janice Barnes is the Global Discipline Leader for Planning + Strategies at Perkins+Will. She leads organizations in developing and aligning workplace strategy to better support business goals and sustainable practices.

of an organizations impact in the communities in which its employees reside (See Figure 1).

Lessons from Leading Companies

A survey by AT&T of their 12,000+ telecommuters showed that the companys mobility program contributed significantly and positively to achieving the three CSR measures outlined previously. Regarding health and well being, 92 percent 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 employees 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 program to the advantage of both. The bank currently estimates reductions in carbon emissions and fuel used

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 advantages, 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 programs to include a greater emphasis on sustainability and are beginning to collect 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 professionals 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 building this bridge to the benefit of the companys external perception and increased emphasis and resourcing of their mobility programs. By being ahead of this curve possibly driving it CRE professionals can continually elevate their good work toward strategy (vs. tactical), bolster their own mobility/AWS efforts and create stronger strategic partnerships within their organizations.

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

Keith Perske is the Mobility Practice Leader at eBusiness Strategies, where he and a team of seasoned professionals help organizations align their workplace designs, technology and work practices with the way people work now.

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. CSR and the City http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=10959954 Employee Commuting - Capturing and Reporting Greenhouse Gas Emissions http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11221492

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REal EstatE ManagEMEnt

The Evolution of Business Continuity And Risk Management: What Are the Implications for Corporate Occupiers?
BY JIM ROsEnBlUtH

usiness continuity has evolved from an IT-centric process to a holistic risk management 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 continuity (BC) has migrated into the C-suites of the worlds largest corporations and from there has filtered down through all aspects of corporate activity. It encompasses 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 evolution of BC has enormous implications for corporate real estate (CRE) managers.

The IT Roots of Business Continuity

It is useful to trace the evolution of business continuity from an IT concept to a key tenet of good corporate governance. The

uninterrupted availability and operation of IT systems and telecommunications networks became increasingly vital as computers grew faster and world commerce became more interconnected. Whereas in the 1970s and 80s companies set availability rates for technical systems of two 9s (99.x percent availability), rates of three and four 9s became the desired goal as international commerce and finance became increasingly dependent on these systems. Todays Tier 4 data centers, the most resilient and fully redundant facilities, operate at availability rates of 99.995 percent. In other words, there is a 0.005 percent probability 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 supporting systems be backed up by at least one fully operational system to automatically take over in the event the primary failed. For especially critical systems, two completely redundant systems back up

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 Changer

The 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 suspend operations in New Yorks financial district following the attacks, companies quickly realized that their ability to operate during exigent circumstances depended on far more than ensuring resilient IT infrastructure. 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 clients, employees, vendors, the public and government)

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ness and disaster recovery. At the most Access to their CRE dent such as occurred at the Fukushima basic level, a BC plan is designed to proIn short, the loss of any of these critical Daichi nuclear power plant in Japan. tect the propertys ability to remain open, elements potentially poses an existential accessible to its occupants and functional risk to the firm. Key Components of a CRE BC Plan regardless of any adverse situation. Today, 10 years after the 9/11 attacks, The unique circumstances of the propBC today operates on an all-hazards the generally accepted definition of busierty the surrounding risk environment, basis the plan must be able to respond ness continuity is: the process by which the business functions performed on effectively to any type of natural disaster, companies mitigate, to the greatest extent site and the characteristics of the proptechnological failure or man-made incident erty dictate the content of the BC plan. possible, unacceptable risks to their comthat could disrupt operations at the propmercial viability, taking all reasonable Four basic documents can capture all of erty. This requires a comprehensive assess- the Page 1 and prudent measures to ensure that12.29_CL_ARJ_Ad_2011:Layout 1 12/30/10 12:26 PMnecessary protocols and procedures: the companys critical operations will continue ment of the physical environment in which an Emergency Response Plan (ERP); an to function throughout any Emergency Communications emergency and, in the unlikely Plan (ECP); an Emergency event that they are unable to do Operations Manual; and a so, that they can be restored to Mission-Critical Inventory or operational capacity as quickly Business Impact Analysis. and seamlessly as possible. The ERP explains the roles, responsibilities and procedures to be followed during all emerWhat Does Business gency situations that could Continuity Mean in the affect the property. It should Context of CRE? Todays commercial real estate environment is like include materials for tenants Any piece of CRE, whether a no other experienced during our lifetime. Thats and visitors as well as for propsingle-tenant office building or why now, more than ever, its imperative to select erty management personnel a small office suite in a multia real estate partner with experience, ingenuity and (security, engineering, office tenant building, an R&D lab, integrity. Personalized service, a global perspective staff, etc.) and cover the full warehouse or stand-alone data and a creative approach to real estate solutions are range of scenarios assessed to center, may be mission critimore than just a philosophy... it is the only way we potentially affect the site. At cal depending on the business do business. a minimum it must include operations conducted or perall response measures required sonnel housed at the site. If the Arthur J. Rogers & Co. Creating solutions for todays by local code but should go operational availability of the commercial real estate market. beyond those requirements to property is impaired or if access include all potential emergento it is denied, the companys cies confronting the property. commercial viability may be at In addition to tenant emerrisk. Not all properties are misgency response instructions, sion critical, so one must have the ERP should include stepa clear understanding of which by-step instructions for all are essential to a companys Property Management Brokerage Receiverships property personnel on what to operations and which are not. Construction Facility Management do in situations that may not Business continuity as it directly imperil tenants but applies to CRE is an operathat are of priority concern to tional philosophy based on the property is located to identify potential building operations. These might include two principles: natural-hazard risks that typically fall into such emergencies as loss of commercial Unacceptable risks to a propertys operational availability during a variety of three categories: geological, meteorological power, telecommunications connectivity and biological, including infectious disease or other essential utilities; loss of heatadverse situations must be identified and, and epidemic/pandemic hazards. ing ventilation and air conditioning sysif possible, mitigated. But technological failures such as the tems; failure of the automated Building Plans, procedures and protocols must Management System; bomb threats; elebe established to enable the property man- prolonged loss of commercial power, telecommunications connectivity or critical vator entrapments; medical emergencies; agement team to react immediately and utilities must be considered, as should unauthorized entry into the property; effectively to any emergency situation to man-made incidents such as fire, hazardprotests; etc. ensure the continued operational availThe ECP provides emergency contact ability of the property and, in a worst case ous material release inside or outside the property, transportation accidents affecting information for all persons associated with scenario, to bring the property back to the property, crime, terrorism, civil unrest, the property, including emergency services operational status as soon as possible. workplace violence or even a nuclear acciand first responders, staff, ownership, key This translates to emergency prepared-

Doing What It Takes

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vendors, as well as service providers, tenants and insurers. It should include multiple 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

schematics, HVAC system configurations in the event of hazmat releases and location and inventory of hazardous materials at the property. The final essential piece is a MissionCritical 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 MissionCritical 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

employees with similar skills and experience 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 welldeveloped 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 companys mission-critical real property assets remain operational and available during adverse circumstances. For those who rely on third parties 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 companys business model and property portfolio.

About the Author

Jim Rosenbluth is the Managing Director of Crisis Management for Cushman & Wakefield globally. He is responsible for C&Ws corporate business continuity, emergency preparedness, security and crisis management programs and provides business continuity support to C&W property and portfolio managers worldwide.

figure 1: Corporate Real estate Business Continuity plan

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. Security Risk Management -Whispering Bell http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=11278881 Mega Session - Risk Management And Value Management http://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=7155318

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REal EstatE ManagEMEnt

Corporate Real Estate Best Practices: A Methodology to Effectively Benchmark Performance

BY DaVID MUsIC, alan nagER anD ann tUCKER

enchmarking is a core activity for most real estate organizations. To improve performance, external benchmarking studies are often initiated to identify areas of opportunity related to cost and quality of service, as well as to gauge how effectively a portfolio is managed. Organizations such as CoreNet Global, IFMA and BOMA, among others, have created standards for consistency of external reporting and benchmarking to aid occupiers in analyzing their own portfolios. While well-intentioned, the unfortunate 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 lacking. Managers looking at benchmark

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-toapples. Meaningful benchmarks must look at similar datasets, not just from an industry perspective, but also from a geographical, functional and facilitytype 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 models significantly influence traditional benchmark standards.

Identifying Key Metrics

The starting point for meaningful bench-

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 measurement 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 supply 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 person 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

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exclude real estate metrics. The operational 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 supply of space and impact supply-oriented metrics like target vacancy and cost per person. To accurately benchmark performance, we need to measure our corporate real estate (CRE) function relative to similar demand-side requirements.

Performance Benchmarks
To 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.

Revenue per square foot or total occupancy cost per unit are valid businessto-business benchmarks because they account for strategic decisions, such as business process insource vs. outsource, creation of shared services, investment in efficient facilities, alternative workspace, 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 looking to improve efficiencies, lower costs and retain a skilled work force, it is important to look at how independent functions within a larger organization perform and measure against best practices for like functions within the company (usually in different locations) 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

should have different requirements in technology, security, workplace utilization, 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 metrics are valid only within a facility type assuming that geographic differences can be filtered. For example, retail space, call centers, distribution centers 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 benchmarking problematic. This separation of metrics allows for valid comparisons but also raises a fundamental question: Where can one obtain valid external data? Where business function, organization and facility type overlap, data is sometimes available

Member-Only Discount

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 Office: +1.404.589.3252

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

Chart 1: The New Newmark Knight Frank Vision Application

from industry groups and trade organizations. 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 Data

It 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 previously described. If an enterprise cannot accurately measure itself over time, tak-

ing into account differences by function, facility type and geography, how can it conceivably compare itself to competitors or industry standards? Understanding the limits of the internal datasets is a critical step in analyzing 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, operational information, especially in decentralized portfolios, is often non-existent, insufficient or is maintained by the business units and has not been aggregated. Accurate headcount by facility and function, 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.

Internal Benchmarks
Whether 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 readily 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 understanding 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 managed relative to demand for goods and services placed on that facility. More importantly, the percentage of

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Momentum.
Despite the economic downturn, Tulsa has it. Companies of all sizes and industries continue to choose the Tulsa region for its resiliency, its growth opportunities, talented workforce and affordable business costs. Plus, Tulsa ranked as a top 10 metro area in 17 publications in 2010 for its economy, real estate and quality of life and people all over the world are taking notice. For more information, go to growmetrotulsa.com.

Jim Fram, CEcD, CCE | Senior Vice President | Economic Development | jimfram@tulsachamber.com Tulsa Metro Chamber | Two West Second Street, Suite 150 | Tulsa, Oklahoma 74103 | 800.624.6822

marketinformationcanbeintegratedwithdemandsideanalysis.This providecompaniestheabilitytoreducespaceand/orcostwhen Corporate real estate Best praCtiCes: a Methodology to effeCtively BenChMark perforManCe icscanbeintegratedwithrealestatestrategy.
about the authors
Alan Nager is the Executive Managing Director of Newmark Knight Franks Global Corporate Services consulting and technology team. He specializes in facility master planning, workflow and business process improvement, workplace strategy and financial analyses. Ann Tucker is a Founding Member of Newmark Knight Franks Global Corporate Services consulting team. Her focus is integrated operations and portfolio strategy, specializing in developing portfolio business solutions from strategy to implementation.

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

hmarksareapplicableforanygivenenterprise,butcomparisonsare improvement offers a meaningful mea- nies) are valid data points and serve sure to normalize differences in facilitwo purposes. First, as noted previvalidwherebusinessunitandfunction,facilitytypesandgeographies ties costs, geography and other factors ously, they normalize data across David Music is a .Benchmarkingbeginswithwelldefinedmetrics(whatisimportantto Managing Director that skew benchmarking. geographies. This is valuable for cost metrics such as rents, labor, energy and Second, benchmark equivalent sure)usingaccuratesupplyanddemanddata.Themosteffectiveplace in Newmark Knight construction. It is more important to Franks Global facility types or functions within a artistrackinghowasinglefacilityperformsovertime.Internal know whether an office in Chicago is Corporate Services business unit. Similar to external above or below what is market value in benchmarking, internal benchmarkhmarkingacrosslikefacilitiesand,finally,validexternalbenchmarking consulting team. He Chicago than it is to know if Chicago specializes in using ing within the company is not valid is paying more than Richmond. business intelligence to better underacross different business units. For a inanindustryandfacilitytypearelogicalextensionsoforganizing Second, geographic and market benchstand operational processes, facility bank, consumer retail branches cannot rpriseinformationaroundvalidmetrics. marks provide opportunities for master planning and developing location be compared to commercial office and
operations centers. Again, the traditional 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, understanding the market rates between the two cities can allow the cost for New York space to be adjusted down for valid benchmarking. improvement when supply-side market information can be integrated with demand-side analysis. This may provide 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 welldefined 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 enterprise information around valid metrics. strategies for global organizations.

uttheAuthors

NageristheExecutiveManagingDirectorofNewmarkKnightFranks alCorporateServicesconsultingandtechnologyteam.Hespecializesin Corporate Real ty master planning, workflow and business process improvement, Estate Benchmarking Techniques http://www2.corenetkplacestrategyandfinancialanalyses.
global.org/dotCMS/ kcoAsset?assetInode=10489655

For more information on this topic, please visit CoreNet Globals Knowledge Center Online.

Tucker is a Founding Member of Newmark Knight Franks Global Corporate Real Estate Benchmarking orateServicesconsultingteam.Herfocusisintegratedoperationsand- Part II Techniques
Geographic and Market Benchmarks
External benchmarks that compare facility performance to the market in general (as opposed to other compahttp://www2.corenetglobal.org/dotCMS/ kcoAsset?assetInode=10488828

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Building the Foundation: A Successful Client/Provider Relationship

BY CHRIs COOPER

odays 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 clients back then were looking for coverage, 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 strategic alliance relationship or partner-

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 fullyintegrated outsourced partner to the point where many large corporates have asked the provider to hold third-party contracts such as facilities management and general contractor agreements as principals, resulting in a mutual and competitive advantage of sharing risks and rewards. But, stepping back for a moment, it

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

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Years

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Building the Foundation: a SucceSSFul client/Provider relationShiP

They requested an Exclusive Provider so-called truism is that one size does tives. Each corporate account possesses relationship to deliver one or more not fit all. Seems pretty basic, howits own unique challenges and pains. repetitive services, thereby excluding ever, we continue to see the canned Whether it is speed to market, attraction other providers and creating an annuity RFP and, even worse, the tried and and retention of talent, growth, contracincome stream. true RFP response. Not to be outtion, efficiencies, unions, geopolitical Veterans of this third-party outsourc- done, the bidders conference queschallenges, access to capital, M&A or ing evolution are todays war heroes tions, the yellow-pad sessions and the driving shareholder value, the account of the incessant focus team, structure, on pricing, key perapproach and strategy formance indicators must be aligned with (KPIs), metrics and those unique challenges voluminous RFPs and pains. To that end, much of which had the partnership of clilittle or no relationent, consultant and ship to the clients provider must take a When youre making a decision youre going to live with, challenges, goals and design-build approach. decide on a partner that keeps your vision front and center objectives. Its as if Each client organithat partner is The Opus Group. notwithstanding statezation is unique with of-the-art integrated unique attributes To deliver buildings that uniquely suit your needs, your culture and your aspirations, we listen global platforms, requiring a service carefully, collaborate closely and deliver technology, seasoned provider that is able customized quality across multiple product veterans, unique stratto affect change in types and project sizes. egies and global covera positive and colage the outsourcing laborative manner, To learn about a customized solution for your business, please contact: process has turned a while working within blind eye on the clithe constraints of the ents pain and reason companys corporate Jason Conway for outsourcing. No governance, industry 952.656.4829 wonder many account and culture. Taking a relationships end like a zero-based approach jason.conway@opus-group.com bad marriage. using real estate soluwww.opus-group.com tions to solve business challenges fosters the Where Lies the much-needed partnerDisconnect? ship or collaborative Are we all destined strategy to bring the to corporate account desired value to the management therapy? clients initiatives. I The test of time has have often suggested proven that while it is that the first order of essential to understand PREFERRED RIGHT EDGE business for any real your clients business estate services provider drivers and overall is to read the CEOs corporate strategy, it or Chairmans letter is equally important to shareholders. There to establish, grow you will typically find and maintain a strong the executives three personal relationship primary objectives. with your client. To 2011 The Opus Group Photo courtesy of Marquette University You now have the road that end, there are two map to success! truisms that stand Secondly, there must be behavior as the foundation to a successful client- presentations are indiscernible among the providers and clients alike. Client alignment. The client and provider provider marriage, both of which are requirements are increasingly more should jointly establish a performanceoften overlooked by the client and procomplex and are tied to the C-suites based compensation model that ties vider alike. overall corporate goals and objeccompensation directly back to perfor1. Design-Build Approach. The first

Delivering Your Vision Is Our Promise.

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Building the Foundation: a SucceSSFul client/Provider relationShiP

provider might consider an account mance through predetermined KPIs. While current state of transformation, culHR lead who has significant union ture, goals, processes and procedures most providers have a standard bank of experience with a positive track record. to create a customized and flexible KPIs, the best way to develop effective Those relationships will ensure a colapproach one that does not dictate and valuable KPIs is through collaboralaborative approach to the assignment. tion with the client. To be effective, a KPI change but rather enhances in a conWhile consistency and stability are structive and collaborative fashion, must be tied directly to the real estate important to any account relationsupported by a thorough communicagoals and environment of the client. ship, the shifting of Lastly, as outsourced account personnel is service providers take common practice. If on more responsibilthe chemistry is not ity from their clients, right between a clithe design-build proent and provider, it cess becomes more may be appropriate to of a change managereplace the team memment phenomenon, ber with an individual addressing areas such who may be a better as protocols, business fit on that particular ethics, dispute resoluaccount. This does not tions, planning, risk mean the individual mitigation, tools and is underperforming or performance metrics. unsuccessful, it may This is especially true just not be the right for corporates dealing match. In fact, the with company-wide inireplaced member may tiatives which involve be a valuable asset on the integration of new an alternative account, partners. The more as their chemistry may extensive the outsourcbe more compatible Why leaders in the aerospace industry are ing model, the greater with a different client. the need for governance investing signicantly at Montral Airport sites As mentioned to keep the client and Greater Montral is one of the worlds leading aerospace before, in any relationprovider aligned. capitals and is ideal for industrial development. We are ship, there are going 2. Chemistry. The proud to feature: to be good times and second truism is as Two world-class aero-industrial sites: Montral-Trudeau challenging times. To common as the first: and Montral-Mirabel, focusing on aeronautics, logistics not only survive the People like to do busiand light manufacturing challenging times but ness with people they Dynamic aerospace training schools including a multi-level to thrive as well, a like. Specifically, teaching centre in Mirabel that offers a highly skilled workforce relationship of equal matching the right A network of the worlds top contractors, equipment dignity and mutual account team members manufacturers, subcontractors and suppliers respect must exist. Just with the clients cul Close to 30,000 people working in 300 top ight companies as we all expect and ture, personality, govdemand respect and ernance, industry and dignity in the workgoals can be challengplace and in each of ing, but is an absolute W H ERE M O N TRAL M EETS TH E W O RLD our own offices, the necessity. It is the first www.admtl.com same must be true step in establishing between client and a healthy, long-term provider. There must relationship one that be a contractual and holds up not just durtion plan that promotes employee sup- emotional commitment to solve chaling the good times but the bad times lenges and/or disputes respectfully port and measurable results. as well. and through appropriate channels and As an example, many facilities manThe providers account management agement account assignments are faced protocol. That said, equal dignity and approach, style and demeanor must mutuality do not come easy. They are with internal client union issues. The take into consideration the clients

Where high tech meets higher standards

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Building the Foundation: a SucceSSFul client/Provider relationShiP

earned through relationship building and endure through personal chemistry. Understanding your clients business drivers and overall corporate strategy is essential. However, it is also important 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, ultimately, to trusted advisor, is achieved through trust, performance and personal 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 tolerant 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 collaborative manner while working within

the constraints of the clients culture, governance and industry. Implementing a design-build approach, coupled with a keen sensitivity to client-provider chemistry, will foster an enduring partnership of alignment, transformation and trust. Dont get me wrong; let us not diminish the importance of coverage, technology, pricing and depth. Just dont forget some of the basic yet crucial tried and truisms.

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.

For more information on this topic, please visit CoreNet Globals Knowledge Center Online. Customer Relationship Management - Its More than Just the Relationship http://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=9663900 Trust & Commitment in CRE Service Provider Relationship Webinar Presentation http://www2.corenetglobal.org/dotCMS/kcoAsset?assetInode=6845710

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executive profile

Jones Lang LaSalles Tod Lickerman: Matching Great Talent with Great Clients
BY chelsie Butler

od Lickermans 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 firms 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 firms 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 firms 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 solutions for those major companies. The last

few years, he has led the Commercial Solutions Group, specializing in incubating the firms specialty businesses, including health care, mobile engineering and energy and sustainability. Last May, Lickerman was appointed CEO of Jones Lang LaSalles Corporate Solutions business, where he is in charge of delivering integrated real estate services for the firms major corporate clients what he describes as bringing together the right mix of capabilities to meet and serve our largest clients needs.

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 better craft our platform to fit their needs, he says. Were 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 outstanding 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 firms deep specialty capabilities 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

New Title, New Roles

Lickermans main responsibilities in his new role can be broken down into three main areas, which include developing talent, operations and client development. 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 giving them career opportunities, he says. We care about positioning them for success. Lickerman also focuses on business operations checking in on investments and where they need to add to their platform.

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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.

or a portfolio planner, he adds. People are open with each other, and you can navigate across the firm to help solve your clients 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 firms 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 calculating the relative carbon footprint of various real estate options to energy management in operating buildings for sustainable project delivery, sustainability has become how we do business and how we will always do it moving forward.

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 backgrounds and ideas. At Jones Lang LaSalle, we have a strong internal diversity program, and were making a lot of progress, he says, Its a big deal to us, but there is a lot more progress that needs to be made in the industry in general.

As for future trends, Lickerman says weve 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 services we provide to our clients may not necessarily always be about real estate.

Connection with CoreNet Global

Lickerman has been involved in the organization 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 participation helps them develop their skill set through interaction with other Members and industry experts, and it helps us contribute 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, its very peaceful, and its the best view you can get.

CRE Trends Today and Going Forward

According 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 corporations showing that it genuinely understands 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 its good to see the progress that has been made by our clients, hopefully 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 cant tell who is an employee for the end user company and who belongs to the service provider and I think thats a good thing.

Overcoming Industry Challenges

While 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 relationships need to be based on value and not just cost. Were 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

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executive profile

Tanya Penny: Keeping the Real Estate Communication Flowing at Verizon

BY chelsie Butler

anya 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 initiatives the company has underway. Verizon has an important credo dedicated 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, anticipating 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 integrity is expected. To ensure it is staying in touch with the needs of its customers, on a tactical level Verizons real estate team employs

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 companys portfolio, which results in an action plan to better support the condition of the building. The team also performs quarterly reviews with customers as an opportunity to assess the state of the building and share long-term growth plans.

Real Estate Strategy

In 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 estates responsibilities include administrative buildings, call centers, many network buildings and data centers.

As a global leader in delivering broadband and various other wireless and wireline communications services, says Penny, our large network and data centers 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 biggest challenges is to resize the portfolio so that the dollars spent allow for better building conditions. Since Verizons vast network has been built up over many years and it cant simply be relocated, 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 consolidates facilities and operations, she adds. It drives portfolio reduction and productivity by bringing teams together and has a

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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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tanya penny: Keeping the real estate communication Flowing at Verizon

huge impact on our ability to improve our customer service and our bottom line. Verizon has designated about 50 buildings 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 environment, says Penny, which obviously results in improved shareholder value. Another part of Verizons 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 standardization opportunities that will result in a more efficient building portfolio and improved customer interface, she adds.

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

Sustainability and Workplace Initiatives

Penny says the company goal year-overyear 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 buildings that will have meters installed to send information, such as which temperature controls need adjusting, to a centralized operations center to track and manage energy usage in real time. Its 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 savings of between five and 10 percent. Verizon has been taking advantage of various alternative workplace strate-

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 employees last year, and what we try to do is tailor these workplace solutions to departmental operational requirements, which include things like telecommuting, desk sharing and hoteling, but its not a one-size-fits-all answer, says Penny. We are pushing for broader adoption of this strategy, and because we have the support of senior leadership, we have made good progress over the past year.

CoreNet Global Connection

Penny was recently elected to CoreNet Globals Board of Directors, and as Verizon gets more involved with the organization on a regional basis, its highest-achieving employees are awarded with the educational and networking opportunities CoreNet Global offers. It has really been a valuable relationship in terms of benchmarking and strategy development, she adds.

Integrated Vendor Management

About 70 percent of Verizons 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 performing various services ranging from food

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executive profile

Sea, Air and Land: Bill Dobbs Leads Georgias Aerospace, Defense and Advanced Manufacturing Economic Development Team
BY BAileY WeBB

ill Dobbs has flown around the block a few times. He joined Georgias economic development team in 1987 and, five governors later, now leads the states 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, Georgias aerospace history is nearly as lengthy as the history of manned flight, dating back to 1907 and the states 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 aerospace jobs in metro Atlanta and throughout the state since World War II. These days, The Georgia Institute of

Technologys Guggenheim School of Aerospace Engineering is the secondranked 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 Boeings 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-billion 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

to the Marshall Space Flight Center in Huntsville, Ala., as well as NASAs operations in Central Florida. Dobbs, himself, 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 wed have 80,000-plus aerospace employees in Georgia, says Dobbs. The entire Southeast has a strong aerospace environment, and Georgias 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 government 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 states infrastructure, innovation, educational

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systems and work force development programs with the ultimate goal of increasing competitiveness, especially in manufacturing and technology, healthcare and agriculture. In every state, a new administration means new priorities and new faces, but one program is likely to remain a cornerstone of Georgia economic development, Quick Start. Originating in 1967, Quick Start provides customized work force training free-of-charge to qualified 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 students, including 2,716 aerospace and automotive employees last year alone. Similarly, the Georgia Work Ready program 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 Readycertified 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 employees 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. Its so employees can hit the ground running upon opening. Thats why its such a strong incentive, says Dobbs. Its 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. Kias Georgia operations are one more piston in the Southeast automotive engine that has developed over the past 15 years, with BMW in South

Carolina, Hyundai and Mercedes Benz in Alabama, Nissan and Toyota in Mississippi and Nissan and Volkswagen in Tennessee. Parts suppliers and manufacturers 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 Southeasts automotive sector are comparable with any other part of the U.S., but the big difference is that employers dont want to hear, Thats not my job. Its not so much that its anti-union, but its 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 component of the states economy. The U.S. Army is relocating its armor center to Fort Benning in Columbus, increasing the bases 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 largest industrial complex in the state, is one of only three such facilities in the U.S., supporting the Air Forces giant cargo planes and their maintenance. Kings Bay Naval Base on the Georgia coast also has drawn Lockheed Martin, General Dynamics and other high-tech companies to the area to support submarine operations. All of the states DoD logistics and maintenance operations also position the state well for defenserelated 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 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, he adds. Were fortunate, too, that when these soldiers leave the service, employers really want them. Employers definitely look at this. Its a real opportunity for them.

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. Were fortunate, too, that when these soldiers leave the service, employers really want them. employers definitely look at this. Its a real opportunity for them.

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special feature

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

conomic development departments and real estate companies across the globe are realizing that it pays to be on the leading edge of green technology. Sustainable practices reduce energy consumption and contribute to a healthier environment. At the same time, green practices provide 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 buildings financially outperform their less sustainable counterparts. Office buildings with LEED certification generate a 4 percent 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

U.S. Green Building Councils (USGBC) LEED-certification program. While real estate companies are increasingly recognizing the value of sustainability initiatives, so are cities. 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 cleanenergy companies will partner with CPS Energy, the municipally owned utility, on projects that will curb energy use while bringing 230 technical and professional jobs to the city. San Antonio is also making a major push to boost its solar power-generating capabilities. Were 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-

nesses to the city. Were leveraging the clean energy opportunity to create economic development opportunities and hundreds of new jobs.

Green Becomes More Routine

As LEED has become the industry standard 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. Its not just architects but general contractors and subcontractors that have incorporated LEED standards. Its become part of their business. CB Richard Ellis, the worlds largest real estate services firm, helps clients

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Rancho Cucamonga has the workforce you need, the entire workforce. White collar professionals, skilled blue collar team players, and green collar rising stars of clean industry. They already love living in prosperous, safe, dynamic Rancho CucamongaSouthern Californias most prestigious inland city. Theyll make your business boom. Educated. Happy. Affordable. Bachelors, masters, doctorates, professional degrees. More than 63% of Rancho Cucamonga residents attended college. Thats higher than all Southern California counties, and growing41% of the Citys labor force growth since 2000 has been professionals, scientists, and executives. Its an affordable workforce tailor made to power technology firms, large professional organizations, and regional corporate headquarters. To avoid commuting to coastal counties, theyll take approximately 8% less than the L.A./Orange County average. Your workforce is already here.

Make Rancho Cucamonga Your Choice.

For more information contact the Rancho Cucamonga Redevelopment Agency 909.477.2700 RDA@CityofRC.us www.RCRDA.us

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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implement energy-efficiency programs and sustainability initiatives. The company recently received its 100th LEED for Existing Buildings certification 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 companys LEED certifications for New Construction and Commercial Interior projects exceed 75 projects, including USGBCs 75,446-sq.-ft. (7,009-sq.-m.) headquarters facility in Washington, D.C. Larger corporations in particular are becoming more advanced and are looking 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 realize 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

environmental quality and innovation. Projects are eligible to receive basic certification 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 youre done with a project? said Smith.

Measuring Green Success

One way to define the success of sustainability 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 sustainable 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.

Based on the in-depth interviews conducted in the first few months, there are already some key conclusions. The majority of workers want their company to go well beyond environmental compliance with sustainability, said Marie Puybaraud, Director of Johnson Controls research arm, Global WorkPlace Innovation. The findings of the study will be presented 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 sustainability 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

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

www.HoosierSites.com
Call 812-876-0294

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

the neW World of carpet design

youd probably be surprised to learn about the types of materials being used to make flooring these days. how about carpeting made from salvaged 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 as building owners and tenants become more environmentally conscious, flooring manufacturers such those unusual materials. as interfaceflor are offering additional product lines made with reclaimed or renewable materials. as more building owners and tenants 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 companys glasbac backing system. all of the companys 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 companys 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 companys 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 percent of the materials the company reclaims and recycles is derived from its competitors waste stream, and the carpeting produced through that system is part of the companys 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 phenomenal, 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.

306,359-sq.-ft. (28,462-sq.-m.) renovation and expansion of its headquarters campus in Glendale, Wisc. The green design features include 1,452 solar panels 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-gallon cistern that captures rainwater to reduce water usage and energy efficient glass and skylights that limit the need for electrical lighting. The companys 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 buildings in energy efficiency. London-based Regus is another company 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 company demonstrates its commitment to sustainability, it hopes to win the loyalty of environmentally conscious clients. More people are interested in coming to a building if its environmentally 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 landlords to address sustainability. At 154 of its business centers across the U.K., Regus is implementing green practices, such as installing light sensors, implementing automatic meters for accurate electric and gas readings and educating tenants about energysaving 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.

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

Its an ongoing process to look at all areas where we can be more environmentally friendly, said Donne.

Cities Demonstrate Green Commitment

Dallas 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 generating employment opportunities for its residents. As part of the citys 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 Energys 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 Energys 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 manufacturing jobs here. CPR Energy is turning to renewable energy to reduce the regions 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 utilitys mission to increase its investment in renewable energy. However, even with the major boost provided by the upcoming 400-megawatt project, solar energy will represent only a fraction of the utilitys 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 further cement San Antonios reputation as a hub of clean energy. Consert, a company that produces sophisticated energy management software designed to reduce energy usage, will relocate its headquarters from Raleigh, N.C., to San Antonio, establishing 50 jobs by first-quarter 2012.

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

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

Were giving you the green light.

Is your company green? Then put it in gear and head for San Antonio. Soon our energy use will be reduced by 771 megawatts and 20% of our power will be from renewable sources. Meanwhile, were already committed to water conservation, wind power, and one of the countrys largest solar projects. Were seeing green jobs being generated by Southwest Research Institute, Mission Verde Center, and the Texas Sustainable Research Institute. Best of all, were helping businesses like yours discover the route to a greener and more protable future. Find out how by calling 210-226-1394.

602 E. Commerce St. San Antonio, TX 78205 Visit sanantonioedf.com E-mail edf@sanantonioedf.com 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-efficiency 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-megawatt 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 Cucamongas dedication to sustainability is visible in a state-of-the art green demonstration 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 certification in May 2010, features sustainable innovations, such as a photovoltaic solar array that provides 40 percent of the buildings 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. Its 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 practices. 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 monitoring 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 initiative 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. Its important that the city sets an example for the community, said Nelson. We cant 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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To learn more, contact: Bruce Ficke Executive Vice President, Corporate Occupier & Investor Services Bruce.Ficke@cushwake.com Or visit www.cushmanwakeeld.com

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special feature

Back to the Future: New Twists on Long-Standing Industries and Emerging Technologies Shape Southeast U.S. Economic Development
BY BaileY WeBB

s the U.S. economy recovers from recession, the Southeast and Gulf Coast find new, transformational opportunities while relying on a few bedrocks that generated decades of consistent growth. Its 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. The automotive industry has long been stalwart in the Southeast, dating back to Fords Jacksonville, Fla., operations originating in the 1920s and Ford and GMs 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.

The Gulf Coast and Louisiana continue to serve as one of the countrys energy and oil production centers, but also claims a first-of-its-kind facility to manufacture modular nuclear energy plants. Similarly, the regions natural resources, such as timber and switch grasses and solar, are yielding a nascent alternative energy industry as well. The Southeasts 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-

plex near Lake Charles, La., prepare for Panama Canal expansion and the gigantic cargo ships that come with it. In todays economy, companies are looking for high-quality, lowcost locations, and more often than not, youre 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, respectively bring renewed focus on their states 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 States sea change.

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back to the Future: New twists oN loNg-staNdiNg iNdustries aNd emergiNg techNologies shape southeast u.s. ecoNomic developmeNt

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

For once in quite a while, the general assembly, governor, lieutenant governor 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. Theres 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 States 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.

We cant 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 Alliances CEO Council. Were building the business center of the Americas. Were seeing a lot of municipalities and the step up to facilitate economic development.

Sunshine CEOs
Ronne and the Greater Fort Lauderdale Alliance started the CEO Council three years ago with the goal of attracting 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 examined existing resources and found that the region already had 150 corporate and/or regional headquarters. Over the

next three years, the CEO Council and Broward Alliance focused on what prospects and existing companies needed to run corporate and regional headquarters and then followed with economic development fundamentals and efforts to increase the areas visibility. The efforts certainly have paid off over the past year and in 2011 especially. In June, tobacco company Altadis USA announced plans to retain and expand its Fort Lauderdale headquarters rather than relocate to another Southeastern location. State and local incentives totaled $625,000 and consisted of $330,000 from the Qualified Target Industries Tax Refund program, $236,000 from the governors 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 Countys average salary $62,448 and retained 84 employees in the city that have averages wages above $100,000. Also in June, Wendys International

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Everything we do is original.
Imagination and innovation. Its part of who we are and how we work. Its how we open eyes and exceed expectations. And its why we prefer hard work and opportunity to rules and red tape. Find out how our original ideas can help your business grow at mississippi.org.

mississippi.org

1.800.360.3323

back to the Future: New twists oN loNg-staNdiNg iNdustries aNd emergiNg techNologies shape southeast u.s. ecoNomic developmeNt

announced plans to relocate its Latin adding 100 employees with a capital tant part of the growth of our region, America and South Florida headquarinvestment of $23.5 million in Sunrise. Mallot said. Theres a concerted effort ters and executive training center to Additionally, Browards Port Everglades, at the state and local level. Sunrise, Fla., the largest container port in Florida and Local officials are working with the Sunrise gained another corporate one of the biggest cruise ports in the Corps of Engineers and the regions resident in July when St. Louis-based world, is working with the U.S. Army congressional delegation to approve Emerson announced funding for and dredgplans to locate its Latin ing of the St. Johns American headquarters River to accommodate in Broward County. the giant container With the move, ships. With dredging Emerson is bringing secured, international 51 jobs with average shipping firm Hanjin wages above $80,000 Shipping has commitWe have all the tools and information you need as a new or and keeping 25 existted to build a $300-milexpanding business in Georgia. Tools such as expert project ing jobs in Florida. The lion terminal, and management; research and technical services, including GIS, company also plans Hanjin is not the only mapping and site planning. And information on financing and to invest $2.2 milcompany with big plans incentive options, markets, and available buildings and sites, lion in its office build for northeast Florida. including the Georgia Ready for Accelerated Development out and technology Though in its early (GRAD) Sites Program. at LakeShore Plaza II, stages, Fort Myers, where its lease and Fla.-based Keystone By combining our expertise and our extensive resources, option total approxiIndustries has indiwell have you up and running in no time. mately 29,000 square cated plans to build a feet (2,694 square 1,000-acre (405-hectPartner with Georgia EMC. Well make your move to or expansion meters). are) superport on in Georgia a smooth one. And youll make the grade, too. Its a process that the north side of doesnt happen overJacksonville. Keystone night, but were really has entered into an seeing the results agreement to develop now, Ronne said. the property with its The retention and long-time owner and expansion of a headcreate a center for cargo quarters operation shipment and manuspeaks volumes to facturing, all served by what the Headquarters CSX. The development Council is all about. is expected to cost Were also seeing some hundreds of millions of great results with dollars and create thougrowth and expansion sands of jobs, according beyond our headquarto reports in the Florida ters recruiting efforts. Times Union. Were seeing good indiWith Panama Canal cations that companies expansion and its three are looking to expand, deep-water ports, airwhether to serve North port and proximity Suite 710, 75 Fifth Street NW Atlanta, Georgia 30308 American or Latin to three interstates 800.339.7185 404.521.7600 www.ga-sites.com American operations. I-75, I-95 and I-10 Outside of the Jacksonville is posiBroward Alliances headquarters initiaCorps of Engineers to expand facilities tioned for gains with logistics and intertive, the organization and its local and for Post Panamax ships. national trade, Mallot said. state partners have worked to secure North on the Atlantic Coast, International business is really expansions with Great Healthworks, Jacksonville, too, is preparing and hunimportant to us, not only trade but which is adding 346 new jobs in gry for a piece of the Post Panamax pie. attracting companies as well, he Hollywood, Fla., and Eyecast, which is We intend for it to be an imporadded. Its all part of our effort to make

Making the Grade

At Georgia EMC, we work for it every day.

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Jacksonville Americas logistics center. Florida exemplifies one of its competition the county from bedroom commuJacksonville will bear the fruit of its tive advantages in business recruitment nity to business center. efforts to attract international busiand retention: no personal income taxes Pascos Economic Development ness in the third quarter of this year and a 5.5 percent corporate tax rate. The Council worked with the Urban Land when French battery maker Saft opens state recently was recognized for having Institute to streamline permitting a lithium-ion battery manufacturing the fifth-best business tax climate in the and fees, and this summer the county facility and finalizes the relocation of U.S., according to the Tax Foundation. revamped transportation impact fees its U.S. headquarters to the city. Saft Florida has a tremendous advantage for office and industrial development received a $95-million grant from the in terms of its tax structure, Ronne to essentially zero. The countys new U.S. Department of Energy and plans said. Were very focused on targeting mobility fee structure includes funds for to invest $200 million, itself, to proareas that have high personal tax conse- mass transit, sidewalks and trails and duce lithium-ion batteries for heavy quences. If you look at private or public also utilizes tax-increment financing. industry that can store energy from wind companies, theyre very, very cognizant Pascos also in the process of rewriting and solar operations. Safts land development codes to operations dovetail with JEAs create consistent, clear reguunder-construction solar farm lations that incentivize develin Jacksonville that will serve opment where infrastructure as a test case for the local utilalready exists to support it. ity and its efforts to increase Pasco cut other impact fees alternative energy production. for businesses on a case-byEven though Jacksonville case basis and focused local suffered job losses in the incentives on job creation. financial services indusNew and existing companies try, the area subsequently that create jobs with at least rebounded when the remain115 percent of the countys ing institutions began conaverage wage, $31,000, earn solidating operations and direct cash payouts from seeking areas with abun$2,000 to $5,000, depending dant, experienced labor at on new hires salaries. a reasonable cost, Mallot The future growth of the said. EverBank has added Tampa Bay region comes 200 employees for a total of through Pasco County, approximately 1,500 to its said John Hagen, President back-office operation, while of the Pasco Economic PNC Bank has added 200. Development Council Careerbliss february 2011 Bank of America (BofA) and (PEDC). Were positioning subsidiary Merrill Lynch the county to come out of have added 1,000 new jobs, the box first as the economy bringing BofAs total to 7,000 rebounds and capture the employees in Jacksonville. momentum of early adopters. Deutsche Bank is fully Its clear growth is coming staffed with more than 1,000 this way. new employees, and Digital As with the Jacksonville Risk, a mortgage research and region, Central Florida and analysis firm, has added 300 new jobs. of the costs, not only operation and Tampa Bay have made enormous strides Our current prospects include 80 facilities costs but personal as well. in the financial services sector over the percent that would be new to the region In Central Florida, Pasco County also past 10 to 15 years. Though the sector and 20 percent expansion and consolida- is rewriting land-use codes and fees. and both regions were dinged by recestion, Mallot said. I look at the majorHistorically pastoral and still 90 percent sion, T. Rowe Price acquired 94 acres ity of our projects over the past year, and unincorporated, Pasco is at the northern (38 hectares) for $13.5 million in July Cyan Magenta Yellow Black its primarily expansions and winning edge of the Tampa Bay region and regu- 2009 and arranged $30 million in state competitions for consolidation. Going larly grew 30 percent per year in the run and local incentives. The company forward, were expecting more new com- up to the recession. Now, with 470,000 maintains its plans to bring 1,600 jobs 5 25 50 75 95 95 75 95 5 25 50 75 95 panies interested in the region. 100 5 25 50 75 and 100 5 25 50 of $1.1 100 to Pasco County in100 next decade. residents a county budget the Financial services growth throughout billion, county leaders want to transiPEDC also is working with local,

Guess which city is ranked hiGher for worker happiness?

austin? boulder? Jacksonville?

33232 Cornerstone CoreNet Qtr Pg Ad September 2011 insertion 2 0 1 1 th e lea d e r 74 s e p t e m b e r PDF/X1-a

/ october

Seeing the Possibilities in Build-to-Suits for over 80 Years

When it comes to Build-to-Suits, few have more experience than Rockefeller Group Development Corporation (RGDC). Weve been defining the commercial real estate landscape for corporate America for more than eight decades and have weathered a fair share of economic cycles. For our clients and joint venture partners, our experience, stability and ability to deliver distinguishes us in the marketplace. For us, its always been a matter of trust. We welcome your inquiries about build-to-suit developments or joint venture partnerships.

Eastern Region Leslie E. Smith, Jr. 973-347-9100

Western Region Tom McCormick, SIOR 949-468-1800

Southern Region Edgar C. Jones 305-579-9966

www.rockgroupdevelopment.com

back to the Future: New twists oN loNg-staNdiNg iNdustries aNd emergiNg techNologies shape southeast u.s. ecoNomic developmeNt

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.

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. Wed 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 New

Southwest Louisiana also exemplifies a mix of established and new industries

and how theyre shaping economic development along the Gulf Coast and southeast U.S. Offshore oil production and petrochemicals have been the regions biggest employer since World War II and now employ more than 6,500, including operations by Citgo, ConocoPhillips and 21 other petrochemical companies. The regions 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 facility on 300 acres (121 hectares) at the Port of Lake Charles that combines Shaws metal and pipe fabrication expertise with

Westinghouses nuclear reactor technology to build modular nuclear power plants; Shaws operation employs 1,400. The emergence of the Haynesville Shale natural gas deposit nearby also has transformed the port into a liquefied natural 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 regions agriculture and timber resources are creating alternative energy opportunities as well. Last year, BP acquired Verenium Corp.s cellulosic biofuels pilot plant and testing facilities in Jennings, La. Were all for alternative fuels and alternative energy, buts going to take this nation a long time to convert, said George Swift, President and CEO of the Southwest Louisiana Economic Development Alliance. Its going to take a combination of all of it, but in the meantime, were providing energy that the nation needs. The fact is, our nation needs energy, and thats what Southwest Louisiana provides. Were now going to export (liquefied natural) gas to the world, and its going to have a huge impact on the states economy, he added. With Chennault International Air Park, its 10,000-foot runway and other resources, Southwest Louisianas aerospace sector is thriving, too. Northrup Grummans operations at Chennault have exceeded the company and states job-creation expectations. For its part, Aeroframe Services Chennault facilities 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 operations 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. Its not all business, all the time, though, in Southwest Louisiana. The region is home to four casinos, and a fifth, Mojito Pointe, is under construction with the last of Louisianas 15 riverboat licenses. It will employ 2,000. We have a very diversified economy

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

with aviation, petrochemicals and tourism, Swift said. Next door to Louisiana, Mississippi has enjoyed a manufacturing renaissance over the past decade, especially in automotive and aerospace. In late July, GE Aviation announced its second 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.) manufacturing 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-

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 colleges to provide work force training, but a big part of Mississippis manufacturing gains also stems from efforts at state research universities such as Mississippi State Universitys Raspet Flight Research Laboratory, the University of Mississippis Center for Manufacturing Excellence and the University of Southern Mississippis Lean Enterprise Center. Thats significant because youre taking the research and development activity and translating it into innovation and production, Hughes said. We see the ability to facilitate that as a real

competitive advantage for our state. Items like land and buildings and equipment are always a part of it, but our team values human capital and connectivity as key drivers as well. That manufacturing and engineering expertise also translates to emerging technologies and alternative energy-focused firms such as Denbury Resources, which is developing carbon capture and sequestration technologies; solar panel producers Twin Creek Technologies and Stion; biomass-derived fuel producer Kior; and Soladigm, which makes glass products that can be tinted on demand. The emerging industries complement the states existing energy producers such as Chevrons 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,

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Hughes said We want to focus on traditional and nontraditional opportunities 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.

Georgias on Their Mind

Georgias recovery from the recession has been a bit of a roller coaster ride, but that doesnt mean the Peach State hasnt had its share of success. Companies such as Novelis, First Data Corp. and NCR have relocated or expanded headquarters operations in metro Atlanta in the past few years, while Sony Ericsson moved its Americas headquarters to Atlantas Buckhead submarket last year, all of them joining the likes of The CocaCola Co., Home Depot, Georgia-Pacific and Delta Airlines. NCR also created approximately 870 new jobs in Columbus at its ATM manufacturing facility. Seattle-based pharmaceuticals 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 suburban 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 redevelopment of the former Ford plant near Hartsfield-Jackson International Airport. Porsches $100-million complex 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 Atlantas 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 recession, 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. Its 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.

its 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.

In the past two-and-a-half years weve 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. Its not the huge annual gains we were accustomed to seeing prior to the recession, 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-Jacksons new international

terminal is scheduled to open in April 2012, which greatly expands the airports 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. Savannahs 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 Canals expansion, East Coast ports are expected to gain 20 to 25 percent at the expense of West Coast ports, which will benefit 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 regions industrial/logistics markets, especially the metro Atlantas giant logistics cluster. That is a huge business opportunity for Georgia, and were 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 campaigns supporting passage of a penny sales tax to fund a litany of transportation projects. The 2012 ballot initiative gives voters in each region of Georgia the opportunity to approve the measure, so one regions rejection will not affect anothers passage. The chamber estimates that it may raise from $8 to $10 billion that can be leveraged for transportation funding. Equally if not more important, Gov. Deal and the state legislature have funded the first phase of North Georgia projects to increase metro Atlantas 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 well need to add capacity for future growth, Gant said.

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engagement profile

Innovation Valley: Partners for Your Business Success

bY sarah-martha todd

he 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 KnoxvilleOak Ridge Innovation Valley, the partnership 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.

Business recruitment, retention and expansion are being encouraged in 13 industry sectors in the region. To make the region stronger for each sector, Innovation Valley focuses on program areas in education and work force development, technology and entrepreneurship, 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 corporate headquarters, shared-service facilities, distribution, automotive component manufacturing, media technologies and renewable energy components. Six economic development agencies 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 starting a new entity or recruiting a new entity to the area a willingness to

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InnovatIon valley: Partners for your BusIness success

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

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 UTs 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 promotes the commercialization of UT intellectual property, says Tompkins. UTs high level of research activity has earned it classification as a Carnegie Foundation Research Institute, and its more than $250 million in external research funding is among the highest in the country, he adds. We discovered how we can turn university discovery into commercial

entities, and I and others at UT connected our regional ED folks to the appropriate expertise in the university when a business had a need. A key component of UTs technology strategy is the development of a new 188-acre (76-hectare) research and development park called Cherokee Farms. The UT Research Foundations annual report is filled with examples of successful projects that received a transfer of intellectual property from UT research. UT also offers training and coaching in entrepreneurship. The College of Engineering has an entrepreneurship 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

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 worlds largest multidisciplinary research lab and is a center 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 Valleys ED staff, businesses at the Halcyon Center may interact with the Oak Ridge Labs researchers to identify a technology with commercial applications and get help developing a prototype. Andrew Wilhelm, President of LED North America, tells his companys

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success story with Halcyon Center and Oak Ridge National Lab. Wilhelm wanted LED North Americas 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 transform 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 carbon foam license has enabled the company to increase its manufacturing and expand into other counties. Nearby community colleges and high schools are Innovation Valley partners and support the needs of business through applied programs. Roane State Community Colleges 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. AMTECs 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

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.
technical schools with our company plus state and local incentives, Id 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 application, not just theory. Six Tennessee Technology Centers in the Innovation Valley region provide skills training on campus or at an employers site. Other work force help includes the states FastTrack Job Training Assistance Program, which provides customized training to manufacturing 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 education resources and partnerships, the Knoxville-Oak Ridge Corridor has much to offer. Id encourage businesses that are in the mode of exploring either a relocation 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, well be with your company every step of the way throughout the start-up process and maintain that relationship upon transition from recruit to existing business.

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.

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industry tracker by richard kadzis

Outsourcing Pioneer Bill concannon:

navigating cOmPlex cOnvergence in tOdays kaleidOscOPic WOrld

We were somewhere in the middle of the 1990s when Bill Concannon called me from his office at Trammell Crows Stamford, Conn.-based corporate services 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 hadnt seen the light yet that outsourcing was about to

Bill concannon

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 traditionalists at the time. His insistence that outsourcing 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 Validation

There was another key validation before that happened. By late 2006, about a decade after my first conversation with Concannon, Trammell Crows corporate 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 mirror but still looking ahead, he says now that, It was very prescient for CBRE to acquire Trammell Crow CompanyIt solidified CBREs position as the leading provider of real estate services for corporate occupier clients just a few years before the (2009) recession hit. CBRE is today rated as the worlds larg-

est CRE service provider by total revenue, according to several industry trade outlets. The addition of corporate services to its broad menu of business lines helped fuel that standing. Other major providers 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 industrys commission-based compensation model. The impact of this diversification move cant be underestimated. For CBRE, outsourcing accounts for as much as 40 percent of revenue for the publiclytraded company. Weve 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 HPs acquisition of EDS. Listen and learn from other industries is the guideline he follows as our industrys strategic alliance model matures. The same approach enables CBRE to apply its Fortune 1000 client experience to help mid-cap companies.

Scale Matters
Smaller client companies are entering the picture more for the globally integrated service providers - and so are smaller service provider partners -

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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 matter 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, its increasingly difficult for smallto mid-size service providers to build organically, especially when it comes to international capabilities. Why will supply-side industry consolidation 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 matters, says Concannon. That speaks to the continued consolidation of service providers in the real estate services space. In fact, CBRE has an acquisition pending with INGs real estate investment businesses in Europe and Asia to consolidate that extensive portfolio into CBREs Real Estate Investment Management line of business, showing that the supply-side M&A beat goes on.

A Compelling Message to the C-Suite

While its 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, rising gasoline prices, Mideast discords, natural disasters and EU Sovereign-debt woes, theres some confidence in the real estate capital markets again. It also represents another opportunity

for service providers like CBRE to leverage 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 winning CRE clients more C-Suite attention, its resonating with the business units inside those same corporations. The result today is that the CRE client 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 clients internal job security 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 procurement management and RFPs created by Sarbanes-Oxley is now a manifestation of the intense scrutiny placed on real estate assets by CEOs, CFOs, COOs and business lines. The CRE function and outsourced

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industry tracker

corenet Global helped set context for Global service delivery model
see related content: the leader magazine special edition, septemberoctober 2006: the evolving service provider industry; Global service delivery comes of age. this in-depth analysis of the supply sides growing influence shows how the global service 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 its done facilitating the dialogue between the service provider and end user communities, comments cbres bill concannon. knowledge center story link: http:// www2.corenetglobal.org/dotcms/ kcoasset?assetinode=853675

Weve found more and more clients are open to a concept we call Total Outcome Key Performance Indicators.

A Spaceless Recovery
These higher-level types of KPIs target operating expense reductions but also account for business drivers like reductions 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 demanddriven recovery mode. One way this translates is even though corporate profits are way up and a lot of companies are sitting on hoarded cash, corporate occupiers will continue to look inward before taking on more space, he says. Its become what Concannon terms a spaceless recovery, because corporations arent hiring to previous levels yet again, and theyre working with what they have stressing the transformation of existing space along with flexibility. Were seeing how flexible workplace practices are now intersecting with leasing strategies and essentially redefining the meaning of portfolio optimization in that sense. There wont be an either-or directive from the C-Suite regarding a focus on value protection vs. value creation, Concannon predicts. It will be a balance 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 support 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 information is still important, weve turned our focus to the supply side of the equation, where flexibility in the workplace can really add the most benefit in a highly variable staffing environment.

Focus Matters, Too

Changing 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. Its also a reason why CBRE places emphasis along with its clients on non-CRE skill sets like internal client relationship management (CRM). Its safe to describe the current dynamic as a sort of complex convergence; 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 establishing priorities, executing flawlessly and highlighting our accomplishments in executive-level communication. To think that the blurring of all these lines includes todays 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!

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 technology challenges that await once FASB 13s 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 complexity of todays environment, its crucial to stay focused on things that drive performance, according to Concannon.

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SOCIAL DYNAMICS : :
CONNeCtIvItY CReAtIvItY ReLAtIONShIPS
CoreNet Global Summit 18-20 September 2011

PARIS

Featuring General Session speaker euan Semple, Social Media expert Culture 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.

Register Now at www.corenetglobal.org

career development by megan mccann

Frank Kayden, dow chemical

by david heaton

Frank Kayden:
His alternative road led Him to real estate
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 centralized model in the 1990s. I developed portfolio strategies and economic evaluations centered around that consolidation and provided a cost analysis of the situation 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 Chemicals lab and office space, he says. My background provided me with a good foundation for making appropriate business decisions, which is the key entry point into how Ive become successful in my current position. Hes responsible for the management of corporate strategy for Dow Chemicals global lab and office real estate portfolio, as well as alignment of facilities with corporate geography, business and function strategies. In addition to his other responsibilities, he is the Director of Real Estate for Dow AgroSciences, a whollyowned subsidiary of Dow. Kayden has also spent more than 10 years as Facilities Implementation Leader, where he completed facility integrations for some of Dow Chemicals major corporate acquisitions and divestitures. Kayden adds he was involved in facilities management as part of his IT role. In 2004, he was one of three charter members of what was known as Dow Chemicals 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. 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 understanding of a companys real estate portfolio, including a vision for the future, is most critical. Kayden says its good to be in the position to respond and provide a dynamic and cost-effective offering to your company. He explains that sustainability, worklife balance and alternative workplace strategies all lend themselves toward CRE being able to anticipate those practices 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 Global

Kayden is very active within CoreNet Global and is part of the Michigan Chapter. He received his MCR designation in less than a year and has also obtained his SLCR designation. Hes 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 divestitures, 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.

Come Together
Because of Kaydens diverse real estate and technology experience, hes been able to see firsthand how important the relationship with CRE and the various business 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

Everlasting Kayden
Kayden received his undergraduate degree from Miami University in Ohio and his MBA from the University of Cincinnati. Hes been with Dow Chemical for more than 27 years, and has more than 20 years of experience in business case development and implementation leadership for both facility and information system integration projects.

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2nd Quarter 2011

real estate dashboard

Leasing Rates (USD/SF/year) Office** Industrial North America Chicago Los Angeles New York Toronto Washington D.C Europe Amsterdam Frankfurt London Moscow Paris Asia Beijing Hong Kong Mumbai Shanghai Singapore Tokyo Australia/New Zealand Melbourne Sydney Auckland $25.71 $30.04 $56.70 $35.14 $49.63 $3.91 $6.50 $6.12 $4.69 $8.65

Vacancy Rates Office Industrial 19.2% 17.6% 7.9% 8.2% 10.0% 10.5% 7.4% 10.0% 6.1% 16.4%

Net Absorption (%)* Office 0.37% -0.26% 0.66% 0.45% -0.26%

$45.80 $61.40 $148.52 $97.55 $111.75

$9.43 $9.54 $20.07 $12.08 $12.12

17.5% 17.6% 4.9% 11.8% 6.7%

n/a n/a n/a n/a n/a

-4.07% 0.32% 0.22% 2.19% 0.13%

$51.90 $192.01 $80.54 $42.13 $86.02 $128.43

$5.32 $10.18 n/a $5.07 $15.15 $21.84

7.6% 3.8% 6.5% 10.1% 5.4% 7.6%

n/a n/a n/a n/a n/a n/a

4.58% -0.45% 3.44% 3.68% 0.35% 0.25%

$48.42 $90.38 $28.81

$8.18 $12.50 $9.50

6.3% 8.2% 13.3%

n/a n/a 4.4%

2.82% 2.40% 2.30%

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

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

North america:
North america industrial sites reflect availability (not vacancy) rates all stats reflect overall market (cbd and suburban) unless otherwise noted:

auckland office stats reflect cbd only, and auckland industrial rents
reflect Grade a industrial vacancy and net absoprtion rates reflect overall market

New York office includes midtown and downtown New York industrial reflects New Jersey Northern stats
(no industrial market in NYc)

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

reflects Grade a warehouse

Washington, dc industrial reflects maryland suburban and Virginia

Northern markets; Washington, dc office reflects cbd only

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.

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

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thank you

the leader extends a warm thank you to the following organizations that help shape the future of the corporate real estate and workplace industry through their generous support of corenet global and its many initiatives.

strategic partners

gold

silver

bronze

ECONOMIC DEVELOPMENT AGENCY

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thank you

the leader extends a warm thank you to the following organizations that help shape the future of the corporate real estate and workplace industry through their generous support of corenet global and its many initiatives.

global learning sponsors

asia pacific

north america - silver

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c apital c orner by megan mccann

by ronald m. peters

attractive Disposition alternative Delivers results

Our team recently completed two large dispositions totaling just over one million square feet (92,903 square meters) of surplus real estate that delivered excellent results for their corporate owners. Both transactions were completed utilizing a charitable method called a bargain sale. Unlike a total property donation, this is where a charity purchases a property at below the propertys established fair market value, which means the difference between the charitys purchase price and the established fair market value may be considered a tax deduction for the selling corporation. Not a bad deal considering both facilities were wasting corporate resources financially and taking corporate management 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, partnerships, S corporations and individual property owners. a fair market value appraisal. The fair market value is the price a buyer would pay a seller, when both parties have reasonable knowledge and information pertaining 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 market value is available in an IRS publication that appraisers need to follow, and timing of the appraisal is somewhat important. A qualified appraisal necessary to substantiate a charitable contribution 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 corporation 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 carried forward an additional five years. Generally, most of the large corporations can take advantage of the entire deduction in the first year. dispositions work well for harder-tosell properties or those with special-use limitations, and they can be used for specially facilities, industrial properties, office buildings, retail building and vacant land. Special-use facilities or those that may have a special manufacturing process can work extremely well. Generally, these types of facilities appraise at high valuations. Its important to note that bargain sale transactions can work well for higher-value properties as well. For example, lets say you have property on the market that appraises for $25 million, 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 Added

The utilization of a donation or bargain sale can add value to the overall disposition 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 transaction. Both can be completed faster, which means considerable corporate savings in terms of holding costs and liability. The property can be recycled faster and perhaps create jobs faster. Ronald M. Peters is a real estate consultant with Peters & Associates. His primary role is managing donations and bargain sales of corporate surplus real estate for the National Emergency Medicine Association.

Ease of Completion
There is a common misconception that donations and bargain sales are complicated 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. Its important to remember the donor needs to establish donative intent and establish the property value by obtaining

Process Works for All Property Types

Its true that donation and bargain sale

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SOCIAL DYNAMICS : :
CONNeCtIvItY CreAtIvItY reLAtIONShIpS

AtLANtA
CoreNet 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.

Register Now at www.corenetglobal.org

members on the move

connecting with corenet Global:

see what members and member companies are doinG around the Globe

According to www.globest.com, Jones Lang LaSalle (JLL) has won a fiveyear, 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 activities as trades, transfers, outgranting or out-leasing and ingranting or in-leasing. Ernst & Young has appointed Maureen Welch and Josh Herrenkohl to key leadership roles as part of the expansion of its Construction and Real Estate Advisory Services practice. Welch will lead the groups 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 groups real estate investor services 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 Countys 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 ranging 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 service 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 partnered 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 delivering exceptional results for clients and driving the firms 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 Citigroups 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 ultimate purchase of the campus property.

michael mccurdy

maureen welch

John Gallander

Josh herrenkohl

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a looK ahead

In Our Next Issue:

coreNet Globals Workplace transformation GWs success with Johnson controls Innovative transactional model ciscos alternative Workplace campus in bangalore Ipds benchmark performance model for essex Fire & rescue eXecUtIVe proFIle: John mcbain, pWGsc eXecUtIVe proFIle: thomas bogle & brandon Forde, studley

INdeX oF adVertIsers
aeroports de montreal arkansas arthur J. rogers atlanta chamber of commerce, metro colliers International coreNet Global (atlanta) coreNet Global (Fm benchmarking) coreNet Global (paris) coreNet Global (thank You pages) cornerstone ed cushman & Wakefield ems software by dean evans & associates Fischer Sustainable Strategies: Corporate Real Estate Portfolios SLCR Seminars: Change Leadership: Strategy, Implementation & Best Practices Positioned for Success: Designing the Optimal Corporate Real Estate Organization Sustainable Strategies: Corporate Real Estate Portfolios 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: Sustainable Strategies: Corporate Real Estate Portfolios melboUrNe, 17-18 NoVember SLCR Seminar: Leadership & Strategy baNGalore, 24-25 NoVember MCR Seminar: Portfolio Management Ft. lauderdale alliance, Greater Georgia emc hoosier energy InterfaceFlor Johnson controls, Inc Knoxville-oak ridge Innovation Valley Inc. lubbock eda mississippi development authority Nebraska public power district ocala llc ontario, city of (ca) opus oshawa, city of oswego county, Inc panchshil realty pasco edc rancho cucamonga, city of regus rockefeller Group development san antonio edF san bernardino county, econ dev agency sIor sodexo southwest louisiana eda tandus tulsa metro coc UGl services Union Investment Virtual premise 49 47 37 51 3 93 41 87 90-91 74 65 28 96 69 72 63 57 7 5 50 71 67 23 11 48 24 25 19 73 61 2 67 66 9 35 31 77 45 43 39 13 29

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

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