To add value to a corporate end user, you have to learn to think like one.
That starts with realizing a client’s No. 1 business isn’t real estate, says Colliers International’s Bill Littleton. The executive vice president of Colliers’ corporate solution group works with six national and global corporate end users and has 25 years of experience. Yet, he remains an active member of the local chapter of CoreNet Global, an organization that serves the corporate real estate community comprised of members from the brokerage community, end users and support industries. It’s at the monthly meetings and annual summit, he says, that he really learns the needs of his clients.
“To add value, is to get involved in CoreNet Global,” says Littleton, who has been a member for more than a decade. “CoreNet is a think tank for all the trends and issues related to corporate users of space.”
Arizona Commerce Authority’s Hilary Hirsch says economic developers are seeing more companies create an internal real estate division instead of relying on a third-party source.
“This shift is due in large part to the critical value and insight that corporate real estate professionals add to a company’s overall success whether in increasing their bottom line or forecasting trends in the market,” Hirsch says.
This echoes Littleton’s point of thinking like an end user. Bringing the market trends to the table is important for brokers’ clients, but in return corporate executives can share their concerns — efficiency, for example — with brokerages as well as other CoreNet members, such as furniture suppliers.
“Leaders in the corporate real estate industry have evolved from focusing on leases and facilities management to serving as change agents, innovators, facilitators and strategic experts,” contributes Colliers’ Tivon Moffit.
Mark Singerman, Vice President and Regional Director of The Rockefeller Group, has been a CoreNet member for two years as a means of saving money.
“Knowing what issues end users face and providing cost-effective solutions are what the most successful CRE professionals do,” says Singerman, whose company has built for General Mills, Sumitomo and BASF.
Examples of useful information, Singerman says, includes rent and sale comparisons from commercial brokers, build-to-suit buildings for sale or lease to end users, general contractors for renovations and new facilities for end users.
With the big push for office efficiency and “right sizing.” there’s less need for large leasable areas. Though that means less space for Littleton to lease, the value proposition for his clients is the real gain.
“It’s like anything else, if you’re true to your cause and you don’t waiver in it, you’ll be fine,” Littleton says. “The world is changing; either change and add value or get out of the way.”
There’s may be a third option, though, suggests one corporate executive — make your own way.
While the world is changing, it helps to be ahead of the curve. Leo Bauman recalls jotting a note on a napkin 20 years ago that would take years of lobbying and research before it could be realized. Seven of Wells Fargo’s office leases were set to expire and he thought, “Why not consolidate the workforce on a centralized campus environment?” After nearly a decade of preparation, the first 410K SF Wells Fargo campus in Chandler broke ground, making way for a few thousand employees.
Ten years later, history repeated itself and Wells Fargo announced plans to double its existing presence with a 410KSF expansion — and that’s not even the half of it; the master plan calls for three more buildings that will bring the campus to 1.74M SF. Bauman, the vice president and manager at Wells Fargo, heads the Corporate Real Estate Group for Arizona’s fourth-largest non-government, non-education employer in the state. It’s his department’s job to manage the office space and utility for 85 lines of work comprised of 16,192 employees.
Bauman is a long-time member of CoreNet. Though the Wells Fargo Campus wasn’t facilitated through a CoreNet connection, many corporate executives and brokers are working closely to increase efficiency, even if that means rightsizing office space, and to accommodate the changing workplace. One of the greatest challenges, notes a recent white paper and case study published by CoreNet, is determining respective departments’ needs and how to make sure those are met in a space.
At Avnet, Inc., Bob Gracz’s role is to develop strategic positioning and help his company get most efficient use of space. The CoreNet Global Arizona’s President says the key to success in his position is about being an early adopter and having a discerning eye for trends. Gracz spearheaded Avnet’s Arizona transition to a Regus executive workplace that promoted flexible space for remote workers.
“What has evolved in the last 10 years is phenomenal, where we’ve gone from a work state where everybody is sitting in an office to literally where almost everybody is working remotely these days,” Gracz says.
“Think of what that does for productivity of the employee, think of what that does for cost management inside a company and think of what that does for quality of life of an employee.”
Avnet is also finding ways to make its existing office space versatile for different lines of work within the company through the use of technology.
“As the square footages of offices and work stations are generally decreasing, corporate institutions are definitely paying more attention to creating work environments tailored toward flexibility, mobility and associate amenities,” says Holder Construction Company’s Keyvan Ghahreman.
Regardless of innovation, corporate executives are always battling what Gracz calls the “expense scenario.”
“Everybody looks at real estate as an expense, but if you really understand how that expense is looked at in the corporate world, you can better position your strategies to be very valuable to the company,” Gracz says, adding that 70 percent of Avnet’s expenses is personnel-related.
“We only have 30 percent of expenses that are not people-expenses, so we have to manage that very well,” he says.
“We want to keep the people. We want to bring more in. I look forward to the day when it’s 80 percent.”
Gracz’s staff of three manages offices for 8,000 people. They were recently approached by Avnet to advise on increasing real estate efficiency within the company’s other regions. Gracz credits CoreNet Global’s emphasis on understanding financial acumen, among other things, to his success.
“Technology, where and how people work—the space—has changed dramatically and, more than ever, the relationship among commercial real estate, human resources and IT is fundamentally critical,” says GPE’s Michael Brinkley.
Gracz’s first Regus executive office structure five years ago was unsuccessful due to an expensive and cumbersome dynamic between his existing real estate and IT. His current adaptation, he says, is far more successful and will save $2M annually. That’s about 20 percent of the group’s facility expense — and that’s just the beginning.