Beruflich Dokumente
Kultur Dokumente
AldrenBormannKimcoRealtyCorp. JulianMarshburnHammersonplc
LisaRaffettoJonesLangLaSalle RobertRainwaterCBREGroup,Inc.
OPS.MANAGEMENTINDUSTRYREVIEW
CommercialRealEstatePropertyManagement
ExecutiveSummary
Completedforfinalpaper
Introduction
Completedforfinalpaper
Scope&Methodology
Thepurposeofthisreportistoanalyzefourareasofperformance(Operations Management/Safety&Governance,FinancialReporting,Sustainability,andFutureof CommercialRealEstateIndustry).Weselected4publiclytradedcommercialproperty managementcompaniestoassess.Theyarelistedinthechartbelow. Company CBREGroup,Inc. JonesLangLaSalle KimcoRealtyCorporation Hammersonplc GlobalHeadquarters LosAngeles,CA Chicago,IL NewHydePark,N.Y. London,England
Thedatathatwasused,forthisreport,wasobtainedfrommultiplesources,found ontheinternet,rangingfromCorporateResponsibilityReports,GlobalReportingInitiative (GRI)Reports,annualreports,corporatewebsites,NewsweeksGreenRating,DowJones SustainabilityIndex,BloombergNews,andtheWallStreetJournal.Variousothersources providedforinspiredcontent. Thefollowingprovidesasnapshotofeachcompany'sbackgroundandstandings: CBREGroup,Inc.(CBG),formerlyCBRichardsEllisGroup,markedits106th yearofcontinuousoperationsin2012.ThecompanywasfoundedinSanFranciscointhe aftermathofthe1906earthquake.Theyhavegrowntobethelargestglobalcommercial realestateservicesfirmintheworld.Today,theyhaveover37,000employees,in332 offices,in42countriesworldwide.
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CommercialRealEstatePropertyManagement
JonesLangLaSalle(JLL),incorporatedinApril1997,isaglobalfinancialand professionalservicescompanywith40,000employeesworldwide,1,000officelocationsin 70countries.JLListhethirdlargestcommercialrealestatecompetitorintheworldand specializesinrealestateservicesandinvestmentmanagement. KimcoRealtyCorporation(KIM),incorporatedinMay1994,isarealestate investmenttrust(REIT)headquarteredinNewHydePark,N.Y.,thatownsandoperates NorthAmericaslargestportfolioofneighborhoodandcommunityshoppingcenters.Asof December31,2012,thecompanyownedinterestsin896shoppingcenterscomprising 131millionsquarefeetofleasablespaceacross44U.S.states,PuertoRico,Canada, MexicoandSouthAmerica.Inmanyways,2012wasabanneryearforKimco.Focusedon boththepresentandthefuture,Kimcoclaimstohavedeliveredoutstandingfinancialand operatingresults,whilestrengtheningtheirbalancesheetandmakingsignificantstrides towardimprovingthequality,value,andgrowthpotentialoftheirshoppingcenterportfolio forthelongterm. Hammersonplc,establishedin1942,isapubliclyownedrealestateinvestment trust.Thefirmengagesininvesting,developing,andmanagingretailproperties.Itinvests inrealestatemarketofEuropewithafocusinUnitedKingdom,Germany,andFrance.The firmprimarilyinvestsinshoppingcenters,retailparks,andoffices.Itwasformerlyknownas TheHammersonPropertyInvestmentandDevelopmentCorporationplc,Hammerson PropertyandInvestmentTrust,andL.W.Hammerson&Co.Hammersonisbasedin London,theUnitedKingdom.Hammersonsvisionistobethebestownermanagerand developerofretailpropertywithinEurope.
OperationsManagement/Safety+Governance
Safety Commercialpropertieshaveseveralrequirementswhenitcomestosafety, licensing,inspection,leasingandotherareas.Theymustbepropermaintenance,zoned andinsuredinordertobeleasedorsold.Ultimately,itsthecommercialpropertyowners responsibilitytoensurethesedifferentrequirementsaresatisfied.Someproperty managementcompaniestakegreatprideintheirsafetyefforts.Belowarewaysour selectedcompaniesviewsafetyandhowtheysharethisinformationwiththeirstakeholders andpublic: Overthepastfiveyears,CBREhasmaintainedaninjuryfreeworkplacewithatotal
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CommercialRealEstatePropertyManagement
ofover5.1millionworkhours.TheyvebeenrecognizedbytheRoyalSocietyofPrevention ofAccidentsfortheirlevelofperformanceexcellence,11timesin2012.Thisis3.7times betterthantheindustryaverage.In2012,CBREwascitedforsafetyissues,during3 differentinspections,butthedeficiencywerecorrectedtothesatisfactionoftheregulatory inspector. AtCBRE,acultureofexcellenceinHealthandSafetyhasflourishedwiththe additionofcontinualimprovement.Additionaltrainingwasprovidedto6,200employees thatutilizedtheironlinetrainingprogram.ItisCBREsongoingcommitmenttohealthand safetyaspartofitsintegrated,responsiblebusinesspractices,whichunderlieour yearoveryearsafetyimprovement,andexceedtheindustrystandardsbyasignificant margin.1 In2012,CBREcontinuedtoimproveontheirsafetyprocess,whichbuiltontheir5 yearplanforbetteringtheirhealthandsafetyplatform.Theyhavefosteredaglobal communityofhealthandsafetyprofessionalswithinthecompany,andcreatedaculture thathasintegratedhealthandsafetyintotheircorporateframework.Withtheincreaseof hoursworkedin2012,theywereabletoreducetherateofincidentsandinjury,buttheyfeel thereisroomforimprovement(continuousimprovement)bylearningfromtheirmistakes andcreatingstrategies,movingforward.Aspartoftheirthis,theyhaveinstitutedamonthly safetynetworkconferencecallwhereattendanceandparticipationhasincreased.This hasallowedthemtodistributeinformationtodepartmentsfaster. Additionalchallengeshaveappeared,withtheexposureCBREisfacing,duetoa significantportionoftheirmaintenancetechniciansutilizingservicevehicle.In2012,a comprehensivefleetsafetyprogramwasinitiatedtogivetheirdriversbettertraining.They haveaddedaCorporateFleetVehicleDrivingSafetyProgramtoassistFleetdriverswith theirdefensivedrivingskills.Thisisimportantduetothegrowingcomponentintheir everydaybusinessactivities. JLLsIntegratedFacilitiesManagement(IFM)teamreceivedtheInternationalSafety Awardin2009and2010,awardedbyTheBritishSafetyCouncil.Theteamreceivedthe awardover600globalorganizationsbasedontheircommitmenttoimprovingcorporate healthandsafety.JLLalsoreceivedtheGoldAwardfromtheRoyalSocietyforthe PreventionofAccidentsforhavingconductedbusinesswithaveryhighlevelof performance,demonstratingwelldevelopedoccupationalhealthandsafety managementsystemsandculture,outstandingcontrolofriskandverylowlevelsof
1
CorporateResponsibilityReport2012<http://marketing.cbre.com/CorpComm/CR_Report/2012/2012_ Corporate_Responsibility_Report_FINAL.pdf>June2103.
CommercialRealEstatePropertyManagement
error,harmandloss.2 JLLextendstheircommitmenttosafetytocustomers,aswell.Theclients,the companypartnerswith,mustfollowthehealthandsafetyproceduresinplacebytheclient, aswellasbeincompliancewithJonesLangLaSallenationalandregionalhealthand safetypoliciesandprocedures.3 KimcoRealtyandHammersonhavenoinformationavailablethataddresseshow theydealwithsafetystandardsorconcernsaroundthem. Indoorairquality Therearemanyelementsthatcanaffectindoorairqualityincommercialbuildings. Thefollowingaresomeofthemoresevere: Radonacolorless,odorlessandtastelessgasthatisnaturallyfoundinsoil,rocks andwater.Ithasbeenknowntocauseseveredamagetothelungs,whichcan ultimatelycausecancer. Mold/Dampnessmanybuildinghavesomeformofmold,eithervisibleor invisibletotheeye.Thiscanbecausedbygeneraluseorpoormaintenanceofa building.Whenmoldtakeshold,itcancauseserioushealthproblems.Ultimately effectinganddevelopingsuchproblemsasallergies,upperandlowerrespiratory irritation,asthmaandbronchitis. Asbestosisanaturallyoccurringmineralthatwasregularlyutilizedinconstruction andmanufacturing.Ithasbeenlinkedtoriskofasbestosisandmesothelioma. Theseareformsofcancerthatattackthelungsandchestwalls,causingpermanent damage. Otherissuesthatcouldcausenegativeeffectsonindoorairqualitywouldinclude ozone,volatileorganiccompounds(VOCs)andpoorventilation.Aspropertymanagers, somehavebeenmoretransparentabouthowtheyaddresstheseissuesandhowtheyare remedyingtheseairqualityissues.
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CBRElaunchedtheRealGreenResearchChallenge,in2012,thatcommitted $1milliontodevelopingsustainablesolutionstoissuesincommercialspace,aswell,their commitmenttogreenbuildingandLEEDcertification.CBREhasbeenthehighestranked commercialrealestateservicescompanybyNewsweeksGreenRankingsforfour consecutiveyears. JLLisabigsupporterofgreenbuildingsandenergyefficiency.Theyrecommend strategiesandideasformanagersofofficestocreatesustainableworkplaceenvironments foroccupants.Somesuggestionsincludeindividualcontrolofindoorairqualitylevelsand ventilation,theplacementofprintersandcopiersawayfromworkstationstominimizetoner dustpollution,theusechemicalfreecleaningsupplies,theuseoflowemissionwalland floorcoveringsandtheuseofairqualitymonitoring. KimcoRealtydoesntdirectlyaddresssolutionsoutsidewhathasbeenlegally required. HammersonhasaNaturalVentilationprojectthatitsimplementingatitsshopping centers.Theplanincludesconvertingmechanicallyventilatedshoppingcenterstomore naturalventilationmethods.Theyarealsoworkingonmixedmodeventilationsystemsin somecenters.Allofthisisbeingdonealongwiththeircommittedtoreducingcarbon emissionsattheirproperties. Governance Corporategovernancebecameapressingissuefollowingthe2002introductionof theSarbanesOxleyActintheU.S.,whichwasusheredintorestorepublicconfidencein companiesandmarketsafteraccountingfraudbankruptedhighprofilecompaniessuch asEnronandWorldCom.4Asaresult,mostcompaniesstriveforahighlevelofcorporate governance.Today,beingprofitableisnotenoughcompaniesalsoneedtobegood citizensthroughenvironmentalawareness,ethicalbehaviorandsolidcorporate governancepractices. Requirementsofcorporategovernanceareviewdifferentlythroughout.Some companiesdisplayandaddressallareasofgovernancethroughtheirwebsiteand reportingdocuments.Belowareexamplesofcorporategovernancetransparency:
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CorporateGovernance.June2013<http://www.investopedia.com/terms/c/corporategovernance.asp>
CommercialRealEstatePropertyManagement
CBREhasstrivedforfulltransparencyinitspublicdisclosures.Thisisclearly displayedbytheirguidelinesforethicalbehaviorintheirStandardsofBusinessConduct, whichisprovidedtoallnewhiresandpostedontheirpublicwebsite.In2012,CBREs corporateresponsibilitypolicystatementwasdevelopedbytheirGlobalCorporate ResponsibilityGroupwhichlefttheultimateresponsibilityfortheprogramwiththeBoardof Directorsandtopexecutives.Inaddition,CBREhasarigorousGlobalAntiCorruption PolicyandaWhistleblowingPolicywhichprovidesforananonymousreportingsystemthat allowsanyoneinvolvedwiththebusinesstoreportpotentialwrongdoings. JLLcomplieswiththecorporategovernancelawsoftheworldsmostrigorous regulatoryauthorities,includingtheNewYorkStockExchange,theU.S.Securitiesand ExchangeCommissionandfinancialservicesauthoritiesintheUK,Japan,HongKong, SingaporeandAustralia,amongothercountries.JLLhasproventhatgoodcorporate governanceimprovesprofitabilitybydiminishingcoststhatresultfromlapsesin governanceThisisapparentbyviewingtheirCSRReport. TheBoardofDirectorsofKimcoRealtyCorporationhasadoptedaCorporate GovernanceGuidelinestoassisttheBoardintheexerciseofitsresponsibilitiesandto servebesttheinterestsoftheCompanyanditsstockholders.AsclaimedbyKimco,their CorporateGovernanceGuidelinesareinlinewithandshouldbeinterpretedinthecontext ofallapplicablelaws.CompleteinfoonKimcosCorporateGovernancecanbefoundon theCompanyswebsiteatKimcoRealtysCorporateGovernanceandtoanystockholder whootherwiserequestsacopy.5 HammersonpridesitselfonhavingaverydiverseBoardofDirectorsfromawide rangeofbusinessbackgrounds.Balanceofskillsanddepthofexperienceaddvalueto thecompany.TheperformanceoftheBoard,itscommitteesandindividualDirectorsare reviewedannually.ThecurrentChairman,JohnNelson,issettoretireinMayof2013and willbesucceededbyDavidTylerwhojoinedtheboardinJanuary2013.TheBoardis collectivelyresponsibleforthelongtermsuccessofHammersonandhasultimate responsibilityfordeterminingthenatureandextentofthesignificantrisksitswillingtotake inachievingitsstrategicobjectives,formaintainingsoundriskmanagementandinternal controlsystemsandforreviewingtheireffectiveness.
KimcosCorporateGovernancePolicyJune2013<http://investors.kimcorealty.com/Cache/1001174082. PDF?Y=&O=PDF&D=&FID=1001174082&T=&IID=102965>
CommercialRealEstatePropertyManagement
FinancialReporting
In2012,CBREjoinedtheSustainabilityAccountingStandardsBoardsAdvisory Council,whichdevelopscomprehensivestandardstoprovidehonestandethicalconduct andcomplianceforfinancialreportingandrecordkeeping. Revenuerose10%toarecord$6.5billion. NormalizedEBITDAincreased14%to$918million. Earningspershare,adjustedforselecteditems,improved18%to$1.22. Netincome,afteradjustingforselecteditems,rose19%to$399.4million. Financials:Howisthefinancialhealth? In2012,totalrevenueforJLLwas3.93billion,whichwasa10%increasefromprior year.57%oftherevenuewasearnedfrominternationaloperations.Leasingandproperty andfacilitiesmanagementbackedalmost60%oftheincome. JLLproduced$328millioninoperatingcashflowsand$233millionsinfreecashflowsin 2012.Thecompanyhas$476millioninliabilitiesand$152millionincashin2012.With EBITDAof$391millionfortheyear,JLLiseasilycoveringtheirdebts.Thecompanypays adividendof$0.40pershare.Earningspersharefor2012were$4.63,downfrom$7.64 in2007. In2012,Kimcoreportedfundsfromoperationscameinat$514.2million,or$1.26 perdilutedshare,up5percentfrom$489.8million,or$1.20perdilutedshare,in2011.As aresult,shareholderswererewardedwithatotalreturnofnearly24percent.Dividends,of course,makeupasignificantportionofKimcostotalreturn.InOctoberof2012,theBoard approveda10.5percentincreaseinourquarterlydividend,toanannualizedrateof$0.84 percommonshare. Hammersonownsover1.25millionsquaremetersofproperty,hadover$225 millioneurosingrossrentsin2012,operates2,225unitsworldwideandproducedover90 promotionaleventsaswell.
IndustryAverages&Ratios
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CommercialRealEstatePropertyManagement
ValuationRatios
JLL
CBRE
Industry
P/ERatio(TTM) Beta PricetoSales(TTM) PricetoBook(MRQ) PricetoTangibleBook(MRQ) PricetoCashFlow(TTM) PricetoFreeCashFlow(TTM) Dividends DividendYield(%) PayoutRatio(TTM) Sales(MRQ)vsQtr1YrAgo(%) Sales(TTM)vsTTM1YrAgo(%) GrowthRates(%) Sales5YrGrowthRate(%) EPS(MRQ)vsQtr1YrAgo(%) EPS(TTM)vsTTM1YrAgo(%) CapitalSpending5YrGrowthRate (%) FinancialStrength QuickRatio(MRQ) CurrentRatio(MRQ) LTDebttoEquity(MRQ) TotalDebttoEquity(MRQ) InterestCoverage(TTM)
0 0 9.3 10.3
CommercialRealEstatePropertyManagement
ProfitabilityRatios(%) GrossMargin(TTM) GrossMargin5YrAvg EBITDMargin(TTM) EBITD5YrAvg PreTaxMargin(TTM) PreTaxMargin5YrAvg ManagementEffectiveness(%) NetProfitMargin(TTM) NetProfitMargin5YrAvg ReturnonAssets(TTM) ReturnonAssets5YrAvg ReturnonInvestment(TTM) ReturnonInvestment5YrAvg Efficiency Revenue/Employee(TTM) 82,823.0 0 4,332.00 3.9 1 179,437.0 0 9,100.00 3.6 1 1,486,573.0 0 459,266.00 N.A. 0.1 734,815 N.A. 5.2 3.9 4.9 3.4 7.8 6.5 5.1 1.1 4.9 1 9.1 1.9 30.9 19.6 2.9 1.8 3.6 2 31.42 56.03 1.47 2.88 1.6 3.1 0.15 8.9 2.4 1.1 3.2 1.3 N.A. N.A. 10.4 27.9 5.7 3.6 42.9 42.5 12.3 11.74 7.4 0.6 N.A. N.A. 32.5 N.A. 25.1 17.4 89.96 76.85 73.05 74.42 31.42 64.56 N.A. N.A. 34.1 0 14.5 7.5
CommercialRealEstatePropertyManagement
Thefinancialstrengthofacompanycanbecalculatedusingthequickratio,which showsacompanysabilitytopaydebtwithouthavingtorelyoninventory.Anythingabove1 isconsideredacceptable.HereweseethatKimcofallsshortat0.7.Thiscouldbe becauseofKimcosrecentacquisitions,whichtookplaceduringQ12013. Abroadmeasureofprofitabilityisthegrossmargin%andwhileanindustry averageisntavailableforthepurposeofcomparison,hereweseethatHammersonhas thehighestgrossmargin(89.96).Incontrast,CBREsitsat42.9 Tobeadded: Payoutratio:anindexshowingwhetheracompanypaysoutmostofitsearningsin dividendsorreinvesttheearninginternally.(incomplete) DividendPayoutRatio:showsthereturnintermsofcashordividendsprovidedbyastock. (incomplete) MarketCap&Share Marketcapitalizationisimportantinformationforinvestorsforvariousreasons.It givesatruecomparisonofthevalueattributedbythestockmarkettoagivencompanys stock.Marketcapitalizationisimportantbecauseitplacesacompanyintermsofitssize tierinrelationtopeers.ThiscanhaveadirectimpactonwhichmutualfundsandETFs (mutualfundsthataretradedonastockexchange)arewillingtoownthestock.
MarketCap CBREGroup JonesLangLaSalle KimcoRealtyCorporation Hammersonplc
Source:ycharts.com
CBREisthelargestCommercialRealEstatepropertymanagementfirminthe world(insales)since2012.
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CommercialRealEstatePropertyManagement
BelowisachartfromJLLs2010CSRReportexpressingtheirfinancialsforthe threeyearperiod,2008through2010.(CSR)
GrowthCatalysts JLLisgrowingdespiteandininspiteofthepastfinancialissues.Someofthecatalysts workinginJLL'sfavorincludecustomerswantingtoworkwithglobalcompaniesthe recoveringmarketsfrom2008marketstrendingtowardestablishedplayersinthemarket andincreasedcrossbordercapitalflows.JLLhasaglobalfootprintandisa longestablishedcompany,poisedtobenefitfromthesetrends. (http://seekingalpha.com/article/1381341alongterminvestorscaseforjoneslanglasall) GlobalReportingInitiative(GRI) CBREhasincludedaStandardsDisclosureIndexaspartoftheirCorporateResponsibility Reportforthelast3years.For2012and2011,theyreceivedaBratingthatwasreviewed byaDeputyoftheGlobalReportingInitiative. JLLhasnotfiledaGRIreporttodate,howevertheydidpublishaCSRReportfor2011 whichisverycomprehensiveanddescribesthecompanyseffortstobeenvironmentally, socially,andfiscallyresponsibleandsustainable.Infact,JLLwasdeemedtheWorlds MostEthicalCOmpaniessixyearsinarowforitscorporatesocialresponsibility,quality ofservicesandglobaleffectiveness (wwhttp://www.joneslanglasalle.co.in/India/engb/Pages/Home.aspx).
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CommercialRealEstatePropertyManagement
KimcohasnotyetfilledaGRIreport.But,asKimcocontinuestobuilditsCorporate Responsibilityprogram,itisdevelopingannualreportingonprogramprogress.By2014, KimcoexpectstoreleaseitsfirstcomprehensiveCorporateResponsibilityreport leveragingtheGlobalReportingInitiativereportingstandardsandtheyplanonproviding additionalinsightsintothecompanysprogramviasocialmediameansandcompany blogs. Meanwhile,insteadofreportingthroughGRI,KimcobeganreportingviatheCarbon DisclosureProjectandGlobalRealEstateSustainabilityBenchmarkstartingin2011.The companywillcontinuetoprovidestakeholderswithaccesstoinformationviatheseforums, andcopiesofeachreportareavailablebelow. Report:KimcosGlobalRealEstateSustainabilitybenchmarkREPORTS(2011&2012) HammersonhasfiledaCorporateResponsibilityReport/GRIin2003,2004,2009, 2010,2011and2012.Tosolidifytheircommitmenttosustainability,in2010,they committedto12keylongtermmeasureswhicharealignedwithourbusinessstrategy. HammersonsLongtermSustainabilityCommitment (basedonGRImeasures)
Environment 10.6%ReductioninCarbonEmissions 6.6%ReductioninWater Consumptionin2012 66%ofwasterecycled 24Biodiversityactionplanscompleted InnovationandResearch Investors 6Researchpaperscompleted 10ofourtop20investorsengaged 1Lifecycleassessmentbegun: Cyfarthfa,Myerthyr,Tydlfil Customers Employees: Suppliers: 24ofourtop75customersengaged 71%ofemployeescompletedCR Training 100%ofsuppliersengagedwithover Target:20%by2015 Target:12%by2015 Target:75%by2015 Target:38by2015 Target:6by2012 Target:20by2015 Target:2by2012 Target:75by2013 Target:100%annually Target:45%by2015
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CommercialRealEstatePropertyManagement
$100EuroValue Communities 63%ofourcommunityinvestmentis longterm 1CommunityPlan:Silverburn, Glasgow Target:75%by2014 Target:alldevelopmentsand managedassetsby2015
Sustainability
Allfourcompanieshavemadesubstantialeffortsandprogresstowardimproving sustainabilityintheirownbusinessesandintheirclientsbusinesses. WithCBREsdesiretobecomemoresustainable,theyfocusedon Respect/Integrity/Service/Excellence.In2010,theybecamethefirstcompanyintheir industrytoachievecarbonneutralityinitsoperations.CBREhostedtheirfirstinternal GlobalSustainabilitySummit,in2012.ItwasagatheringofCBREsustainability professionalsfromaroundtheglobetodeveloppolicystrategiesandstakeholder activities.NewsweekRankedtheCBREGroup,Inc.astheGreenestRealEstateFirmfor 2011at128(overall)andin2012theywererankedaveryclosesecondat96. InJuly2012,CBREreleasetheirEnvironmentalSustainabilityPolicy,which demonstratestheircommitmenttotheenvironment.Thepolicyfocuseson11keyareas, suchasenvironmentalcommitmentandpracticesthatsupportthetransitionourclients needtotakewiththeirownrealestate,andprovidetrainingandeducationtotheirown professionals. JonesLangLaSallehasover1,250LEEDAccreditedProfessionalsthatare focusedonover20,000sustainabilityprojectsonanannualbasis.AnEnergyand SustainabilityTeamassistsclientswithcreatingecofriendlyworkplacestoalternative energysources.Theseeffortshaveproventoreducenotonlyourclientsenvironmental footprint,butalsotheiroperatingcosts (http://www.us.am.joneslanglasalle.com/UnitedStates/ENUS/Pages/energyandsustainabili ty.aspx). InJanuaryof2013,Kimcolaunchedasustainabilitywebsiteinaneffortto incorporatemoresustainabilityintotheirbusinessmodel.Thesitefocusesaroundfourkey
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CommercialRealEstatePropertyManagement
fundamentalprinciples: 1.REthinkBusiness:detailsKimco'seffortstocreatenewsourcesofvalue,andaddress issuesofconcerntotheindustry 2.REnewCommunity:describesKimco'scommunitybuildingandemployeevolunteer efforts 3.REstoreEnvironment:outlinesKimco'senvironmentalsustainabilityinitiatives 4.REsources:providesformalreporting,alliancesandpartnerships,andpolicies TheconceptofsustainabilityisfairlynewforKimcoRealty.However,inthepastfew years,Kimcoinvestedinmultiplecorporateresponsibilityinitiativesincludingimplementing autilitymanagementprogramtomonitorresourceuseandreduceexpensesatindividual centersaddinglandlordinstalledsolarpanelsatshoppingcenterstoreducetenantenergy costsdevelopingalightingcontrolsystemthatreducesparkinglotelectricconsumptionby 25percentandpartneringwiththeInternationalCouncilofShoppingCenterstodevelopa firstofitskindPropertyEfficiencyScorecard. "Wedevelopedthesitetocreateadedicatedforumforstakeholderstolearnabout ourcorporateresponsibilityprogramandthesuccessesthatwe'vehadtodate,"saidWill Teichman,DirectorofSustainabilityatKimcoRealty."Inthepastfewmonths,many stakeholdershaveinquiredaboutwhatKimcowasdoinginthecorporateresponsibility arena.Mostwerehappilysurprisedtolearnthatweweredoingsomuch,butaskedwhywe weren'tsharingourstoryinamorepublicway.Thisnewsitegivesusanidealplatformto shareoursustainabilitysuccesseswhileestablishingtheforwardmomentum,purpose,and accountabilityneededtoachieveourfuturevision." WallStreetJournalarticle:KimcoRealtyLaunchesCorporateResponsibilityWebsite HammersonusesBREEAMasastandardforsustainabilityefforts.BREEAM (BuildingResearchEstablishmentEnvironmentalAssessmentMethod)asastandardwas establishedin1990intheUK.LEEDwasestablishedin1998intheUS.40%of HammersonsportfolioincorporatesanenvironmentalappendixintotheirGreenLeases. TheirGreenLeasesnowincludemandatoryBREEAMclausesforallnewdevelopmentsto secureBREEAMExcellent. Energyusage/type TheenvironmentalimpactofcommercialbuildingsiswidelyrecognizedCBRE
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consumedsubstantialamountsofwaterandenergyandproducesignificantwasteand greenhousegasemissions.Aspartoftheirpolicycommitmenttoimprovingtheir buildings,CBREhasrequiredthatallexistingofficesundergoaretrofittoinstallasub meterthatmeasureselectricityusage.Thiswillproviderealtimeenergyusedatathat supportstheircorporatecarbonfootprintmeasurementandhelpsthemmeetLEED certification.Tocounteracttheseneeds,CBREestablishedtheRealGreenResearch Challenge,in2012.Thechallengeencouragessubmissionsofideas/practicesthat reducetheseenvironmentalimpacts. WhilesustainabilityisanewconceptforKimcoexecutivemanagementandjust withinthelastfewyearswaswhentheyhiredtheirfirstsustainabilitymanager,theyhave alreadymadesomeprogress.Kimcohasrecentlyinstalledsolarpanelsintheir BridgewaterPromenadeandEdgewaterCommonsshoppingcentersinMarylandand havepowereduptheirnewrooftopsolarinstallations,whichwillsupplyanestimated1.3 millionkilowatthoursofclean,zeroemissionpowerannuallytothecenterstenants. Additionally,in2010,Kimcopioneeredanewmodelofsolardevelopmentamong retailpropertyownersfinancinganddevelopingthreemegawattsofrooftopsolar productioncapacityonsixshoppingcentersinNewJersey.Eachsolarprojectinvolveda partnershipbetweenKimcoandoneormoreretailerswithKimcoowningandoperating thesolarpowersystemandtheretaileragreeingtopurchasediscountedpowerfora multiyearperiod. KimcohasalsosetupaTenantEnergyServicesprogram,whichallowsthemto workinpartnershipwithtenantstoreduceoperatingcostsfromenergyandwater consumptionanditsenvironmentalimpacts. LEEDCertification CBREhasprovidedtheirLEEDEBcertificationserviceto171buildingstotaling morethan70millionsquarefeetglobally,eliminatingnearly49,000metrictonsof greenhousegasemissions. CBREsLEEDCertification Buildings171 SquareFeet70,438,000 AnnualkBtuSavings281,401,000
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AnnualCO2EmissionReductions48,519AnnualWaterSavings 87,845,000gallons CBREclients59 CBRESAClients26 BuildingsCertifiedLevel14 BuildingsSilverLevel55 BuildingsGoldLevel102 PercentageofCreditAchievement98.7% BuildingswithPerfectScores97 StateswithCertifications22 CurrentNumberofCertificationsUnderway147 CBREprofessionalshavetakenanactiveroleandbecomeinvolvedinGreen BuildingCouncilPanels,theGreaterChinaInternationalLEEDsRoundtable,helpedcreate thefirstsetofregionalizedprioritycreditsforLEEDscertificationfornewconstruction,and hadarepresentativeontheSpanishGreenBuildingCouncilroundtable. JLLhasalsofocusedonhelpingownersandoperatorstoobtainLEED certifications.ComprehensiveLEEDgapassessmentsareused,alongwithaLEED scorecardtohelpJLLdeterminethestepsneededforthecompanytobecomecertified, Silver,GoldorPlatinum.OneofthepasthighprofileLEEDcertificationprojectsforJLLis theBankofAmericaToweratOneBryantParkinNewYork,thefirstofficetowerto achieveLEEDPlatinumcertification ThefollowingtableshowsthenumberandgeographicdistributionofJLLsgreen buildingandretrofitactivitiesin2010:
(CSR)
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Hammersonintroducedasustainabletimberroofsolutioninsomeofitsnewretail developmentsin2012.Theyhavebeganstudyingandimplementingthereuseofsteel fromoldretaildevelopmentsinnewones.TheirRetailLabcreatesasolutiontoprovide retailerswithafast,lowcost,lowenvironmentalimpacttemporaryunit. Social ImpactonLocalandBroaderCommunities DuringCBREsannualemployeefundraisingcampaign75%offundsarematched by50%(uptothebudgetedamount)andsentbacktothelocalofficesforallocationtothe causeoftheirchoice.Theother25%isgiventocausesrelatedtoshelterandpoverty housing,environmentalsustainabilityandcommunityservice.In2012,CBREandits employeesdonated$6.7millionto583organizations. JLLhasastrongcultureforcommunityinvestmentandhasimpactedcommunities worldwide.TheJLLCharitiesentityistaxexempt,whichallowsittocollecttaxdeductible donationsfromemployeesandcontributethemtocharitabledonations.JLLandCBRE workedtogethertoraiseover$20,000tosupportNorwoodHighSchoolhockeyplayer MattBrownwhosufferedasevereinjury.JLLalsoparticipatedinaStepUpforKids programwhichraisednearly$450,000fortheChildrensMemorialHospital.(CSR). Kimcohascreatedseveralprogramswithanefforttogivebacktothecommunity.A distinguishedprogram,KimcoBusinessBootCamps,a3dayprogramthatactsasa microbusinessincubatorwheretheygivetrainingforbuddingentrepreneurswithastrong desireyetlimitedresourcestostartandrunasuccessfulretailbusiness. AttheBootCamps,studentslearnaboutallfacetsofretailing,frombusiness planning,financing,andmarketresearchtositeselection,permitting,hiring,and marketing.Inadditiontohelpingthestudentsdevelopbusinessplansandmakefinancial projections,advisorsworkwiththemandKimcotohelpfindtherightspacesfortheirretail businesses. Kimcoscommitmenttohelpingthesebusinessesgetofftoastrongstart,the companyoffersqualifiedentrepreneursandfirsttimebusinessownersoneyearoffree rentandotheroperationalandfinancialbenefits. Source:
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http://www.kimcorealty.com/corporateresponsibility/smallbusinesssuccessstories.aspx Kimcohasadditionalprogramsinplacetogivebacktoabroadercommunity. Amongthemare: HurricaneSandyRelief BreastCancerWalkandBikeRide ChilliCookoffFundraiser Hammersonmakesgreatinvestmentsinlocalcommunities,ofwhich,63%isforthe longterm.Theseinvestmentscomeintheformofcashdonations,volunteeringandthe useoftheirretaildestinations.In2012,theymadeatotalof1.04MillionEurosintotal communityinvestment.Theyalsosupportentrepreneurshipandsmallbusinessthrough investmentoffundsandexpertiseoftheirretailmanagersinthestartupproposals.They havehelpedtocreate949newcompaniestogeneratejobs,boostlocaleconomiesand keepinvestmentintheregions.Theirimpactonbroadercommunitiescanbeevidencedin theirspecifictimingthestartofprojectsandthenumberofjobsbeingcreatedandthe impactthisgrowthwillhaveonthecommunityandtheregion. Employees CBREunderstandstheimportanceofaninclusiveanddiverseworkforce,andusing itasanopportunitytodefinetheircorporateidentity.Theyhavealongstanding commitmenttoempoweringwomen,LGBTcommunity,AfricanAmericanandHispanic Networks,andrecentlydevelopedanewVeteransEngagementTeam,whichconnects newemployeeswithmilitarybackgroundstootherswithsimilarexperience.Asaresult, CBREhasbeenrecognizedfortheireffortsbyreceivingtheCareHonorRollforthelast sixthconsecutiveyears.Inaddition,theyreceivedan85ratingbytheHumanRights CampaignCorporateEqualityIndexfor2102,theonlycommercialrealestatefirmtodo so. Over98%ofCBREs37,000employeescompletedtheirannualethicscertification, forthelast4years.Thisdemonstratesthecommitmenttointegritythatcreatesthe standardsofconductthatrunsthroughthecompanyculture.Thecultureofintegrity guaranteedthatCBREcontinuedtoinvestinpeople,processesandtraining,thusallowing forcompliancewithlawsandregulationsineachcountrywheretheyhaveoperations.
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CommercialRealEstatePropertyManagement
JLLemploys1,075accreditedstaffmembers,2.5percentofthecompany's42,000 employees,arepresentin29countries.Mostemployeesearnedtheircredentialsthrough theUSGBC'sLEEDAPandLEEDGreenAssociateprograms.JLLemployeeshavealso obtainedBREEAMaccreditationmembershipasanAssociateoftheInstituteof EnvironmentalManagementandAssessmentcertificationasaBuildingCommissioning Professional(CBCP),anEnergyManager(CEM),oraDataCenterEnergyPractitioner (DCEP)andaccreditationthroughprogramsoperatedbyGreenGlobesGoGreenPlus, GreenMarkandtheNationalAustralianBuiltEnvironmentRatingSystem. JLLbelievesitsprofessionalsareresponsibleforthe200buildingsandcommercial interiorsthathaveachievedgreenbuildingcertification,andforinstallingandmanaging 1,400MWofwindandbiomassenergyprojects.JLLssustainabilityprosalsohelped clientssave$128millioninenergycostsandsave563,000metrictonsofgreenhousegas emissions(GHG)in2010. (http://www.greenbiz.com/blog/2012/01/05/jllsstaffcertifiedsustainabilityprosgrowsnearl y1100). AsstatedbyKimcossustainabilitymanager,Kimcoemployeesarethedriving forcebehindthecompany'sphilanthropicefforts.Employeesaremotivatedbyastrong desiretohelpothersandgivesomethingbacktothecommunity.Theytaketheinitiative andactivelysupportmanygrassrootsprogramsthatareclosetotheirhomes,andcloseto theirhearts.Theiroutreacheffortsincludeeverythingfromhelpingneighborsrecoverfrom severestorms,tosupportingmedicalresearchandhealthrelatedcauses,toraisingfunds andactivelyvolunteeringforprogramsthatmakelifebetterforthoseinneed. Kimcosemployeescompanysponsoredhealthbenefitsalsoenjoybenefitthrough aspecialemployeehealthandwellnessprogramwithWeightWatchers.The12week program,whichstartedin2012,broughtmeetingsandweighinsintotheircorporate offices.AsexplainedbyKimcosmanagement,theyhadaWeightWatcherscounselor comeinduringlunchbreakstomeetwithemployeesinterestedinlosingweight,provide guidance,support,andadvice.TwentynineKimcoemployeeslostatotalof305poundsin 2012. In2012,Hammersonhad71%oftheiremployeescompleteCRTraining.Their goalistohave100%by2015.Theyhad3,005hoursofemployeevolunteeringin2012as well.Theyhaveintroducedaleadershipprogramandnewcorporateintroduction programmetopromotecooperationbetweenteams,departmentsandshoppingcentres. Theyencourageemployeesengagementonsustainabilityandsocialresponsibility
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through environmentaltraining CommunityDays Personaldevelopmentreviews Andtheyhaveimplementedanemployeesurveyacrossalllevelstogatherfeedbackand helpimproveprocessesandthecompanyingeneral.
FutureofCommercialRealEstateIndustry
Potentialobstacles TheU.S.commercialrealestate(CRE)recovery,althoughslow,hasbeenvisiblein improvedfundamentals,capitalavailability,assetpricingandtransactions....However,the CRErecoveryappearstobeunsteady,withincreasedcautiongiventhenationsstalled economicrecovery,whichisdue,inpart,tosovereigndebtproblemsandeconomic stagnationinEuropeaswellasslowinggrowthinemergingmarketssuchasChinaand India. Demand,whichisdrivenbythevolumeofcommercialrealestatetransactions,is heavilyinfluencedbyrealestatevacancyrates.Averageannualrevenueperworkeris about$250,000forbrokersandagents,butabout$120,000forpropertymanagers, reflectingthemorelaborintensivenatureofpropertymanagement. Thetop10issuesforcommercialrealestateare:
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Analytics
Local,nationalandinternationaleconomy CommercialRealEstateCompaniesarevulnerableduringperiodsofeconomic weakness,risinginterestrates,fiscaluncertainty,declineinemploymentlevels,lower demandforcommercialrealestate,fallingrealestatevalues,changeinthecapitalor creditmarkets,orthepublicperceptionofadecliningmarketcouldnegativelyaffecttheir performance.Theirbusinessislargelyimpactedbyeconomicconditionsinthemajor markets.Thiscanultimatelyaffectacquisitionsofrealestateandleasingactivity.In addition,thedeclineincommercialrealestatevaluesandrents.This,inturn,reduces revenuesfrompropertymanagementfeesandcommissions.Also,politicaloreconomic disruptioncouldimpactinterestratesorliquidity. Constantlychanging(local)demographics ChangesinlocaldemographicscanhaveimpactsfortheCommercialRealEstate Industry.Thingslikeincreasingagesofagingbabyboomersinanareacanaffectthe demandfordifferenttypesofhomesandalsoincreasedemandforcommercialrealestate aswell.CREswillneedtoconsiderthislocaldemographicdatawithmakinginvestments innewpropertiesandalsowhendecidingwhattypeofpropertiestobuildormanageinan area. Technologyinfluence(internetshopping,virtualtoursetc) CommercialRealEstateCompaniescanutilizeinformationtechnologiestodrive improvementsacrosstheenterprise.UseofthingssuchasCloudcomputingtoincrease operationalefficiencyandSocialMediatohelpgatherdataaboutconsumerbehaviorsto increasecompetitiveadvantage.CREsshouldaggressivelyadopttechnologiesto increasegrowthandremaincompetitive. LookingtotheFuture By2017,CBREwillhavethecapabilitytomonitorandmeasureutilityusageintheir 50largestcarbonemittinglocationsbyinstallingseparatemeteringdevices.Inaddition, theywillstrivetolocateatleast70%oftheircorporatefacilitiesover20,000squarefeetin spaceorbuildingsthatarerecognizedforgreenbuildingstandards.Moreimportantly,they
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CommercialRealEstatePropertyManagement
arepledgingtocontinuetheRealGreenResearchChallengewheretheyseektodiscover newandinnovativeprograms,practicesandtoolstoadvanceinnovationandpromotion energyefficiencyandsustainablepractices. Overthenextseveralyears,Kimcowillcontinuetoleverageitsexperiencein renewableenergyandenergyefficiencytoprovidenewenergysolutionstoitsretail tenants.Webelievethatloweringenergycosts,andassociatedenvironmentalimpacts, canbeofmutualbenefittolandlords,tenantsandcommunities,saidWillTeichman, DirectorofSustainabilityatKimcoRealty. HeresaperspectiveonthefutureoftheRealEstateIndustrybyAndrewWeber, whoisanAnalystforFranchiseHelp.comandisagraduateofNewYorkUniversityand NewYorkUniversitySchoolofLaw. Thewholearticlealsocoverswheretheindustryhasbeenandwhereitsheading.. accordingtoMr.Weber,ofcourse. Heresthearticle:RealEstateIndustryAnalysis2013Cost&Trends RealEstateIndustryFuture Potentialobstaclesfortheindustryincludefactorsbeyondthecontrolofthe businessowner,suchasdownturnsinthelocalornationaleconomy,aswellaschanging neighborhooddemographicswhereagenciesarelocated.Alsooutoftheownerscontrol isthebuildingofproperties,andwhatpropertiesintheareaareavailable.For managementcompanies,indoorairqualityliabilityhasbecomeaseriouslegalissuein recentyears.Removalofmoldgrowthinparticularhasbeenincreasinglynecessaryfor propertyownersandmanagers. Theuseoftechnologywillcontinuetotransformthefieldintheyearsahead, enablinghomebuyerstoresearchbothpropertiesandtheareasinwhichtheyarelocated, includinglookingatpicturesandfindingoutabouttheneighborhoodsschools,crimerates andotherstatistics.Marketingovertheinternetwithpicturesofpropertiesandvirtualtours willbeimportantforbrokers.Morethanninetypercentofpeopleusetheinternetbefore purchasingrealestate.UnitedStatespopulationgrowthwillalsobeanimportantdriving factorinthegrowthoftheindustryatlarge.Theworkforceisexpectedtogrowfourteen percentbetween2008and2018.Theinternetarguablymayeliminatetheneedforbrokers
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altogetherinthefuture.Banksalsorepresentapotentialcompetitor.Recentlytheyhave beenfreedbyrulechangestoenterthecommercialrealestatefieldinalimitedway,andit ispossibletoseefuturerulechangesallowingthemtoentertheresidentialfield.The biggestgrowthareasareexpectedtobeinthesouthernhalfofthecountry,particularlyin thesouthwest.ArecentsurveyrevealedthehottestbuyersmarkettobeAlbuquerque,New Mexico. Eveninspiteofthepooreconomicconditionsandthestateoftheindustry,analysts areconfidentinthefuturegrowthintheindustry.Brokerscommissionsareexpectedto growatacompoundedrateoffourteenpercentannuallyfrom2010to2015.Theoutputof UnitedStatesrealestatebusinessesisexpectedtogrowatanannuallycompoundedrate ofsixpercentbetween2010and2015.
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WorksCited http://www.cbre.com/EN/Pages/Home.aspx http://marketing.cbre.com/CorpComm/CR_Report/2012/2012_Corporate_Responsibility_ Report_FINAL.pdf http://annualreport.cbre.com/CBRE_AR12.pdf#page=11&zoom=125,0,279 http://www.thedailybeast.com/newsweek/2012/10/22/newsweekgreenrankings2012us 500list.html http://www.investopedia.com/terms/c/corporategovernance.asp "KimcoBusinessBootCamps."KimcoRealty.N.p.,n.d.Web.14June2013. <http://www.kimcorealty.com/corporateresponsibility/kimcobusinessbootcamps.aspx>. "KimcoRealtyCorporationCorporateGovernanceGuidelines."KimcoRealty.N.p.,n.d. Web.14June2013.<http://investors.kimcorealty.com/Cache/1001174082.PDF?Y =&O=PDF&D=&FID=1001174082&T=&IID=102965>. "KimcoRealtyLaunchesCorporateResponsibilitySite."TheWallStreetJournal.The WalltreetJournal,31Jan.2013.Web.14June2013.<http://online.wsj.coarticle/ PRCO20130131910027.html?mod=crnews#http://online.wsj.com/article/PRCO 20130131910027.html?mod=crnews>. "Reporting."KimcoRealty.N.p.,n.d.Web.14June2013. <http://www.kimcorealty.com/corporateresponsibility/responsibilityreportcards.aspx> Teichman,Will."BuildingControls."KimcoRealty.N.p.,n.d.Web.14June2013. <http://www.kimcorealty.com/corporateresponsibility/buildingcontrols.aspx>. Teichman,Will."KimcoRealtyBlog3CorporateResponsibilityTrendstoWatchin 2013Comments."KimcoRealty.N.p.,19Feb.2013.Web.14June2013. <http://blog.kimcorealty.com/2013/02/3corporateresponsibilitytrendstowatchin2013/>. "WasteManagement."KimcoRealty.N.p.,n.d.Web.14June2013.
<http://www.kimcorealty.com/corporateresponsibility/integratedwastemanagement.aspx>. 25
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RealEstateIndustryAnalysis2013Cost&Trends GreenBuildingFeaturesSupportWorkerWellbeingandProductivity.JonesLang LaSalle,JonesLangLaSalle,2013.AccessedJune9,2013. DuoofHealthandSafetyAwardsforJonesLangLaSalle.JonesLangLaSalle,Jones LangLaSalle,2013.AccessedJune11,2013. GlobalHealthandSafetyPolicyandManagementStandards.JonesLangLaSalle,Jones LangLaSalle,2008.AccessedJune11,2013. Wherewestand,Buildingbeyondtomorrow.2010CSRReport.JonesLangLaSalle, JonesLangLaSalle,2010. Guevara, Leslie. JLL's Staff of Certified Sustainability Pros Grows to Nearly 1,100. GreenBiz.com. January 5, 2012. GreenBizGroup, 2013. Web. June 15, 2013.
http://seekingalpha.com/article/1381341alongterminvestorscaseforjoneslanglasalle
http://www.joneslanglasalle.eu/EMEA/ENGB/Pages/Newsitem.aspx?ItemID=20106#.Ubd wqpyKJc8 Indoorairquality,http://www.ap.joneslanglasalle.com "Hammerson."Home.N.p.,n.d.Web.15June2013. Hammerson.CorporateResponsibilityReport:PositivePlaces.London:Hammerson, 2012 "CommercialRealEstateOutlook:TopTenIssuesin2013."Deloitte.N.p.,n.d.Web.15 June2013. "4KeyFactorsThatDriveTheRealEstateMarket."4KeyFactorsThatDriveTheReal EstateMarket.N.p.,n.d.Web.15June2013.
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