Corporate Real Estate Executives Research Articles

After the pandemic: Contemplating the future of central office buildings

The COVID-19 pandemic has dramatically changed the nature of office work. The main driver is remote work, a concept theorised for years, but upon its arrival has become a significant disruptor of commercial real estate. Buildings and the city cores they occupy in large urban centres have hollowed out. Large organisations, still tied to long-term leases, try shedding space to adapt. As they do, cities reliant on property tax revenues find themselves at odds with institutional landlords over asset values. The upheavals unfolding in the industry, particularly in the office sector, are enough for prominent media organisations to declare downtown office buildings dead. But are they? By analysing quantitative and qualitative data and evidence from high-profile organisations, it becomes apparent that although building occupancy may not be what it was prior to the pandemic, indicators point to a macroeconomic reset where the steady rise in occupancy will establish a new equilibrium, probably not too different from what it looked like pre-pandemic. Along the way, a new industry metric, the Idle Space Index (ISI) is introduced to define an interrelationship between occupancy and vacancy rates, which can greatly assist strategic space planning. In the medium term, chaos will reign supreme, as corporate real estate (CRE) executives try to engage in longer-term planning. Building assessments will remain a contentious issue until that new equilibrium is established, but for an industry described as being on its last legs, it seems there is plenty of life left.

Managing global property portfolios, transactions and teams : A primer for corporate real estate executives – Part 1

More than ever, corporate real estate (CRE) executives and their advisers are afforded the opportunity to coordinate projects in markets unfamiliar to them. This paper discusses the reader’s commitment to the site and the economic investment you have made to the property and to the business. In many cases this may be dependent upon the ability to exit later in a way that allows corporate real estate (CRE) executives to derive residual value rather than to abandon their investments. Its aim is to inform CRE executives’ questions and to encourage them to educate themselves about the faraway location of their next property investment, and to expand their peripheral vision.

Managing global property portfolios, transactions and teams : A primer for corporate real estate executives — Part 4: Transactional Risk Management in Multinational Context

Part 4, the concluding segment in this series of articles, considers transactional risk management in the relationship-building and deal-making phases of a new project, including intended and potentially unintended impacts of exploratory discussions and preliminary documents such as term sheets, letters of intent and memoranda of understanding. There is also an overview of the importance of legal compliance and ethical considerations in an increasingly regulated and multicultural context.

Managing global property portfolios, transactions and teams : A primer for corporate real estate executives — Part 2: Communications

Part 2 in this series of papers evaluates the challenges of managing global property portfolios, and offers tips on communicating with colleagues, advisers and counterparties across countries and cultures, including where there may not be a shared primary language for conversations and where the negotiations and controlling documents may be in a language other than your own.

Managing global property portfolios, transactions and teams : A primer for corporate real estate executives — Part 3: Assembling and managing in-market teams

Part 3 in this series of papers begins with a self-assessment exercise in which the reader is invited to recognise how his or her planned on-site or remote involvement (and level of authority) can dramatically affect the selection, organisation and management of the team working on an in-market project. There is then consideration of scheduling and team management, as well as effective collaborations with chosen multinational and in-market legal and professional advisers.

Workplace design + space utilisation = talent retention : How understanding space usage can fund workplace transformations to deliver the offices our talent really wants

The ‘war for talent’ is on and the workplace is the battlefield. This paper will explore how corporate real estate (CRE) and workplace executives can leverage cutting-edge technologies such as the smart building, the Internet of Things (IoT) and space utilisation sensor technologies to understand their workplace in real time, all the time. Empowered with this data, CRE and workplace can confidently deliver insights throughout the workplace design process that can transform the way their organisation works. Next-generation workplace design technologies such as 3D modelling and augmented reality (AR) can be used to involve the building occupants, allowing them to shape the design towards delivering a workplace that talent needs today. When these innovative workplace and design technologies come together, CRE and workplace executives can be empowered to spearhead change throughout the organisation. This will result in a better workplace more aligned to serve the talent that the organisation so desperately needs in order to thrive.

Corporate real estate strategies and organizational culture

PurposeThe purpose of this paper is to investigate how strategic corporate real estate (CRE) management varies across different types of organizational culture. Additionally, the authors examine how a set of well-established strategies is categorized by CRE executives and investigate whether there have been any changes in priorities of managers’ rating in importance of these strategies compared to a post-GFC study. Design/methodology/approachA wide-scale survey of CRE managers was undertaken in summer 2016. Two key components of the survey are namely importance scoring of CRE strategies after the framework of Gibler and Lindholm (2012) and organizational culture assessment based on the competing values framework of Cameron and Quinn (2006). Analysis of CRE strategy importance is undertaken based on the average score comparison per each cultural family, and additional features are reported based on the industry sector, firm size and CRE department size. Principal component analysis is used to provide statistical evidence on the grouping of CRE strategies by practitioners. FindingsEmpirical evidence points toward a clear division on the organizational culture dimension that differentiates effectiveness criteria of flexibility and discretion from stability and control. More specifically, clan and adhocracy cultural types prioritize employee-centric CRE strategies, whereas hierarchy and market cultures consider “Reducing real estate cost” as their single most influential strategy. Research limitations/implicationsThe competing values framework has been adapted from the original ipsative scoring process to reflect the fact that only one respondent per firm assesses their organization’s culture. Practical implicationsThe findings of this study are useful to CRE managers striving for maximum strategic fit within their firms as they unveil clear patterns of CRE strategy prioritization among different organizational culture types. Originality/valueTo the authors’ best knowledge, this is the first study that analyzes the inter-relationships among CRE strategies and organizational culture variations. Additionally, the paper provides a categorization of CRE strategies through statistical methods that follow a clear pattern based on the scope of each strategy.

From accessory to necessity : Embedding data governance in business operations

Corporate real estate (CRE) has become datarich as buildings, workplaces and work itself becomes increasingly data-driven. As the universe of CRE data continues to grow, data governance is becoming a bigger challenge for many CRE teams still working with basic spreadsheets. When it is trustworthy and accessible, CRE data can help an organisation become more agile and competitive. Although the purpose of data governance varies depending on the organisation, some common components are always required. This paper details key considerations for creating a vision for the organisation’s data; defining critical data elements; and creating a business glossary and data dictionary with related business rules and data quality rules. It explains the concept of the data management model assessment and data maturity levels, to establish priorities for the data governance programme. Also discussed are steps for creating a data governance framework, including roles and responsibilities and distinguishing between data governance and data management. Since most companies lack even a basic understanding of their CRE data, having a strong CRE data governance programme will differentiate an organisation. CRE executives must not only think forward, but also recognise that this is a race to be the first to deploy.

New rules, new strategies: How the changes to lease accounting rules impact leasing decisions

One of the biggest questions on the minds of corporate real estate (CRE) executives is: will leasing strategies need to change? The answer is ‘maybe’. Deciding on the right move will not be quick or easy, and the work must begin now. This paper will primarily examine leasing activity under new US GAAP rules, ASC 842.

Lease accounting with the Gershwin Brothers and The Rolling Stones: Part 1

The long awaited, and greatly debated, changes to lease accounting standards under GAAP and IFRS were finalised in early 2016. As corporate real estate executives, their advisers and their peers in corporate finance have now begun the first steps toward implementing these new standards, many are surprised by the financial statement outcomes. More specifically, due to the very subjective nature of many aspects of the new standards, companies are finding — and will increasingly find — two identical leases can have widely divergent accounting outcomes when accounted for by two different companies. This is true not only for a scenario where one company reports under GAAP and another under IFRS, but also for two different firms both of whom report under the same accounting standard. Despite the fact that the FASB’s and IASB’s stated intentions more than seven years ago were to achieve consistency and transparency in lease accounting, this paper discusses why companies should not expect either outcome. In Part 1, we explain how two identical leases can realistically yield very different accounting outcomes, and why it matters from a balance sheet, shareholder equity, net income and EBITDA perspective. The forthcoming Part 2 of this paper will focus on steps CRE directors, their advisers and counterparts in finance can take to optimise various financial impacts in light of the new standards.

The future of work will change everything

Tremendous converging forces are radically reshaping the world of work as we know it. Emerging technologies will have an impact on every aspect of the working world and every aspect of our working lives for the next 20 years. Accelerating business model transformation and increasing workplace complexity will challenge global organisations. The Fourth Industrial Revolution enabled by Third Platform emerging technologies will change the future of work for every organisation within every industry sector during the 21st century. New innovative workforce models are emerging, including ‘the liquid workforce’ and ‘the human cloud’, which will displace traditional enterprise workforce models. The human workforce will need to adapt to increasingly sophisticated machine-to-human and machine-to-machine collaborative ecosystems — employees will be working seamlessly with our very competent robotic colleagues. Leading corporate real estate (CRE) organisations will seek to integrate digital workplace technologies that will enable these new dynamic workforce models. Global CRE organisations must embrace digital workplace transformation as it accelerates and intensifies across all industry sectors. Global CRE executives must respond to these disruptive business changes and workforce challenges while also maintaining operational excellence and providing strong ROI and financial performance. As the world of work is transformed, a core question emerges: how can CRE organisations be agile and develop effective strategies within a continually disruptive and evolving business environment?

Don’t leave money on the table when selling corporate real estate assets — Real estate transactions do not need to be a liability any more: A case study on selling CRE assets in a transparent manner

The paper shares experiences and know-how on how to significantly improve the divestment process of Corporate Real Estate assets by better managing transaction risks, reducing the project timeline and increasing the net sales value. Two Corporate Real Estate executives share their hands-on experience in relating how they refused to accept that real estate transactions could not be more transparent and found the answer thanks to technology.

Evolutions in next-generation integrated facilities management (IFM) outsourcing contracts: Implications for corporate real estate, facilities management and procurement executives

As companies continue on the integrated facilities management (IFM) outsourcing journey, corporate real estate (CRE), facilities management (FM) and procurement executives must evolve their sourcing strategies from first-generation approaches to accommodate shifts in internal goals and objectives and respond to changes in the supplier industry. This paper explores what companies are doing in their next-generation IFM outsourcing efforts and how these strategies both influence and react to developments in IFM suppliers’ service offerings. Characterised by multi-regional approaches and simplified versions of their first-generation contracts, cornerstones of these shifting strategies include addressing innovation and a broader view of total facility operating costs. Practical insights drawn from companies’ experiences and lessons learned in overcoming issues will offer guidance to firms that are either considering starting the IFM journey or enhancing their existing programme.

The rise of co-working: A growing workplace movement

Expanding from its beginnings as an experimental office concept for entrepreneurs and technologists, co-working has quickly emerged as an effective workplace strategy for a growing number of corporate organisations. A range of off-site and on-site co-working environments are being explored by businesses to support their ongoing expansion and organisational requirements while accommodating the shifting work preferences and values of an increasingly diverse workforce. Because these shared workspaces can often provide businesses with greater flexibility and efficiency than traditional office leases, the global co-working trend is expected to continue indefinitely. This paper explores the growth and evolution of co-working, including factors contributing to the global movement and specific examples of businesses that are benefiting from co-working strategies within their own organisations. The goal is to equip corporate real estate (CRE) executives with insights and resources to explore co-working as a practical real estate strategy that can contribute to improving an organisation's overall performance by providing flexible, productive work environments that foster collaboration, innovation, extended networking and passive recruiting. By embracing these progressive ideals, businesses will be well equipped to meet the needs and expectations of their future workforce.

Typologies for co-working spaces in Finland – what and how?

Purpose This paper aims to categorize the typologies of co-working spaces and describe their main characteristics. Design/methodology/approach The aim is reached by means of analyzing 15 co-working spaces located in the capital area of Finland. The data used consist of interviews, websites, event presentations and brochures. Findings As a result, six co-working space typologies were identified: public offices, third places, collaboration hubs, co-working hotels, incubators and shared studios. The categorization was made by using two axes: business model (for profit and non-profit) and level of user access (public, semi-private and private). Research limitations/implications The results provide a viewpoint on how co-working spaces can be categorized. Practical implications In practise, the results can be applied by all stakeholders who are working with alternative workplace solutions to respond to the needs of new ways of working, especially via workplace services for multi-locational and flexible working, including facilities managers, corporate real estate executives and designers. Originality/value This research builds on the previous academic literature on co-working spaces by making the phenomena more explicit for researchers and practitioners who are facing the challenges of developing new alternative workplace offerings.

Translating user needs into high-quality real estate solutions aligned with today's business drivers: Prominent CRE executives responsible for global portfolios provide insights and best practices

As today's corporate real estate (CRE) executives face mounting pressure to deliver inspiring workplaces that enhance recruitment and retention, they also encounter a myriad of complicated business challenges. These factors, coupled with a new definition of workplace quality, necessitate creating new approaches for planning and execution that engage user groups and service providers in dynamic partnerships. This paper shares the perspectives of a select group of seasoned CRE executives responsible for developing and implementing real estate strategies for global companies occupying millions of square feet. It provides specific examples of how each has evolved planning at the macro level to enhance portfolio optimisation and at the micro level to deliver specific workplace solutions. The research approach employed in the preparation of this paper was the qualitative interview method. It was used to gain insight into the experiences of CRE executives and to provide clear understanding of the current business drivers presenting challenges to planning and how each individual is responding to them. Questions were tailored to obtain a detailed account from each interviewee including specific examples that illustrate key points. Companies featured include Viacom, WPP, Interpublic Group, Wells Fargo and Gensler.

The pressure cooker of expectations: Research highlighting global corporate real estate trends in 2015

C-suite expectations for corporate real estate (CRE) teams have consistently risen every year since the global financial crisis, with demands ranging from reducing occupancy costs to boosting workforce productivity. These expectations have intensified over time into a pressure cooker of challenges. JLL's 2015 ‘Global Corporate Real Estate Trends’ report, based on survey responses from 544 CRE executives in 36 countries, reveals that, while the CRE profession has matured in recent years with greater use of outsourcing, data and analytics and business relationship management, significant further development is required to address corporate demands. Concurrently, CRE teams are constrained in their ability to evolve from ‘tactical manager’ to ‘trusted advisor’. But there is a silver lining: tools are available to help CRE leaders take steps to overcome the obstacles and elevate the profession to a higher level of excellence.

A glimpse into the future: How smart buildings are changing corporate real estate

Smart-building technologies are having a growing impact on corporate real estate. As workplace strategies and the built environment change, corporate real estate executives must understand the benefits and cost impact of smart-building solutions. This paper will arm corporate real estate executives with examples, strategies and tactics that they can put into practice to yield beneficial results in their real estate portfolios.

Lease accounting trouble looms for corporate real estate management

Purpose– The purpose of this paper is to investigate what impact International Financial Reporting Standards (IFRS) lease accounting changes might have on corporate real estate (CRE) strategies, and what the consequences for future corporate real estate portfolio decisions might be.Design/methodology/approach– A macro-analysis based on the constructive capitalization method of Imhoffet al.(1991) is used to determine the potential impact of IFRS lease accounting changes on Amsterdam Exchange Index (AEX) listed corporations. In addition, a series of interviews were held with CRE executives to discuss this impact and with CRE and IFRS experts for general insight.Findings– The impact of IFRS lease accounting seems less severe than expected. Notwithstanding, it could form a serious bottleneck for CRE departments that do not operate on a strategic level. Therefore, IFRS lease accounting changes might act as a catalyst for the professionalization of corporate real estate management departments.Practical implications– The paper provides CRE managers with a manageable insight to alter CRE decision-making processes in relation to IFRS lease accounting. The sample size was too small to make a distinction between different industries.Originality/value– Past research showed that accounting is a potential variable in CRE decision-making, but did not yet clarify the possible impact of IFRS lease accounting on CRE strategies and the relating CRE operating decisions. Besides that, this paper also provides insight for options to cope with the (possibly severe) implications.

Risks ahead: the transformation of the corporate real estate function

Purpose – This paper aims to detail key findings from Jones Lang LaSalle's (JLL's) biennial Global Corporate Real Estate Trends (GCRES) 2013 study and highlight risks for corporate real estate (CRE) departments arising from global trends. Design/methodology/approach – JLL's second GCRES report is based on a survey conducted in 2012, concluding in December. Its findings are based on 636 responses from CRE executives spread across 39 countries, representing a 24 increase in respondents from the 2011 survey. The base sample used within the report covers 545 companies, each employing more than 1,000 people worldwide. Survey responses reflect the views of CRE leaders from a diverse range of sectors, domicile and operational locations, as well as companies of varied size. Findings – The paper focuses on risks to the CRE function arising from the most significant trends, such as portfolio right-sizing in mature US and European markets versus growth opportunities in emerging markets. Such risks include excessive real estate cost cutting and lack of investment capital for revenue-enhancing workplace strategies; procurement-driven outsourcing decisions; the focus on cost-per-square-foot rather than more holistic productivity metrics; the growth of shared services; and the challenging of entering less-developed markets that have significantly less market transparency that mature regions. CRE professionals will gain valuable and timely insights into current trends, along with practical guidance for responding to these trends and risks. Research limitations/implications – This paper focuses on global trends. However, mature and emerging markets tend to diverge in terms of trends and risks facing CRE executives. An individual country may diverge significantly from the overall global trend. Practical implications – The global financial crisis increased the importance of CRE to CEOs as a tangible lever for enhancing revenue growth – even as cost-cutting has resulted in historic lows in the departmental budgets, and a slashed pool of in-house talent. Amid continuing global economic challenges, CRE executives now face new C-suite demands to dramatically affect the culture, productivity and performance of their companies. Originality/value – This study is one of very few that includes data about CRE outsourcing trends, the growth of the shared services model and numerous other trends affecting CRE executives.