bluuebunny/crossref_metadata_2025 huggingface dataset:
How corporate real estate affects shareholder value
Authors: Booth Michael
Published: June 2007

Shareholder value must remain central to the attention of corporate real estate officers (CREOs), even though senior executives have a number of competing agendas. One reason for this is that shareholder value is a vital performance indicator for any important ancillary service; another is that CREOs can help to improve shareholder’s wealth in a unique way. It is well known that occupancy costs directly affect the net earnings of the firm and thus the extent of any surplus it can generate over the annual charge for the use of capital. Occupancy costs also influence how large that charge for resources should be in the first place. Firms pay investors for the use of capital but, in efficient capital markets, the cost is only related to the risk that investors cannot remove by holding a basket of shares. This risk is the intrinsic variability of the cashflows derived from the activities of the firm. This variability is in turn influenced by the amount of company borrowing and by the ratio of fixed to variable costs. Even after allowing for the effect of gearing, the investor’s likely returns are determined by the amount of fixed costs required to generate sales revenues. This is important to CREOs because occupancy costs are a large proportion of most fixed costs. CREOs can therefore influence shareholder value both by the volume of all occupancy costs and by the proportion of fixed costs or leverage that their decisions incur. An indicator of the degree of real estate leverage (DREL) could therefore be a very valuable tool for CREOs. It would also give them more influence in key financial decisions and should raise more interest in real estate issues among shareholders and senior executives.
Beyond the technology: Software systems for proactive portfolio management
Authors: Jones Richard
Published: June 2007

Software companies boast the latest in interactive technology to solve all the CRE director’s
problems, but this is rarely the whole answer, part of the answer or even the answer at all. This paper explores and categorises the generic attributes of software systems and the many factors it is necessary to consider in their purchase and implementation. How systems can deal with performance measurement, management of the many tasks that need to be undertaken, togather with the complexities of project management, financial management and keeping track of outsourced activities are all important. Mere replication of existing management procedures does not generally provide the best benefits. Guidance is put forward which might assist in assessing the wider aspects of how information and knowledge are used. By reference to case study it is shown how such an approach can lead to a better, more practical end solution as well as avoiding many of the pitfalls of implementation. It is at that final hurdle of implementation that a high number of systems fail.
The Alliance Program: Establishing a new knowledge base on the corporate real estate portfolio management competency
Authors: Bomba Tom
Published: June 2007

The Corporate Real Estate Portfolio Alliance performed extensive research into corporate real estate portfolio management and developed a number of new practices and analytical methods. A number of papers in this issue of the Journal of Corporate Real Estate resulted from the research. This paper provides an overview of the corporate real estate organisations and researchers involved, the research methodology and its findings.
Guidelines for corporate campus workplace solutions
Authors: Latshaw Margaret
Published: June 2007

For the corporate real estate (CRE) executive who has the opportunity to plan a campus, this paper presents guidelines to ensure that campus workplace solutions are aligned not only with corporate objectives but with the corporate culture as well. The paper draws on a variety of corporate campus solutions and emphasises the importance of understanding the role of CRE in supporting the company’s unique culture and in enabling change to that culture.
Managing and reducing corporate real estate taxes
Authors: Ardern William B.
Published: June 2007

Annual real estate taxes are one of the largest and fastest‐growing occupancy costs for corporations
owning or leasing real estate in the United States. An active programme of management, control and reduction of annual
real estate tax assessments can be successful, if a corporation is proactive and follows certain steps on a timely basis.
The PRIME contract: The Department of Social Security and Trillium
Authors: Evans Michael
Published: June 2007

The PRIME contract is revolutionising the property industry. It has enabled the UK Government’s Department of Social Security to outsource not just its facilities management and property management but also its entire property portfolio and the risks associated with it. PRIME will provide the Department with 22 per cent cost savings over the life of the contract, give it the flexibility to downsize its portfolio to 60 per cent of its original size and replace hundreds of separate service provision contracts with one service provider, Trillium. Trillium is one of the new types of property service providers who are taking advantage of the historical failure of traditional property owners to give occupiers what they want in terms of service and flexibility. The implications for corporate real estate are enormous ‐ who better to deal with occupier problems like surplus space, flexibility, property market risk and service quality than the supply side of the industry. The potential benefits for those property providers on the supply side who are positioned to take advantage are substantial ‐ instead of just rental income from one property for one occupier, there is the opportunity to capture all occupancy cost revenue for an entire portfolio. The occupier can potentially save costs, increase flexibility, reduce risk and more closely align its corporate real estate with its business strategy.
In practice: How to get an operating business to collaborate
Authors: Cole Harry
Published: June 2007

One of the businesses (AA) in the UK was making losses and staff motivation was poor. If only its management realised it; however, its circumstances could offer it potential salvation.
Outsourcing corporate real estate asset management in New Zealand
Authors: McDonagh John , Hayward Timothy
Published: June 2007

The outsourcing of non‐core business activities has recently mushroomed throughout the world
as organisations seek reduced cost and strategic business advantage in an increasingly competitive marketplace. A component of this overall trend has been a dramatic increase in the extent to which real estate asset management functions of non‐property investment organisations have been taken over by ‘external service providers’. This study is the first in New Zealand to examine current practice and emergent trends and to identify outsourcing issues and problems in detail. Via a survey of 457 organisations, the reasons behind the trend to outsourcing are identified, as are the types of services outsourced; the basis of selection of service providers; the skills and attributes required of real estate professionals; and the success or otherwise of outsourcing experiences.
Uncertainty in property valuation: The pricing of flexible leases
Authors: French Nick
Published: June 2007

It can be argued that the property valuation profession has historically relied upon uniformity as the basis of all capital and rental valuations. Within each property sector, differences in location and design were secondary to the underlying fundamental that the lease contracts for the properties were the same. During the 1980s most leases, in all sectors, were of 25‐year duration with the tenant being responsible for all outgoings. In the early 1990s the lease length reduced but most other terms remained constant. Rental valuation could therefore be made by direct comparison on a pro‐rata basis. Similarly, capital valuation would be made either by direct capital comparison, or by reference to a comparable rent and yield to determine the capital value by the investment method. Comparison was still the principal tool of analysis and this relied upon uniformity of leases within the market. In the late 1990s, the business environment experienced substantial structural change and tenants began to demand bespoke leases to suit their particular requirements. This has led to a plethora of different lease contracts, as tenants require shorter leases, the ability to expand and contract, break clauses and upwards/downwards rent reviews. The market is now as diverse as it was uniform in the 1980s. However, as pricing models relied upon comparison, valuers were reluctant to accept tenants’ new demands for flexibility as it was difficult to price these new contracts. This paper reviews the change in market conditions and equates the new requirements of the tenants with an increase in the uncertainty in the market. It argues that this uncertainty can be built into pricing models using probability‐based models and provides a scenario analysis to price a flexible lease contract.
Accommodating change ‐ Emerging real estate strategies
Authors: Worthington John
Published: June 2007

The pervasive impact of information technology, and the shift to a new economic paradigm has resulted in new ways of working. Successful organisations today are looking for work environments that unlock creativity, support collaboration, and ensure that the ideas of staff and collaborators are absorbed back into the intellectual capital of the organisation. Organisations have changed dramatically, but the physical settings have been slow to respond. The challenge for the real estate market and facilities professionals is to respond to a business model that supports both individual and collaborative working; provides for flexibility of tenure; and affords adaptability of both space use and function. A new real estate offer is emerging that provides both space, services and amenities, to support the tenants business over the life of a customer’s needs. Leading edge developers are now more concerned with creating a diversity of users, by providing space for a symbiotic clusering of firms in specific market sectors with their supporting supplier services and customers. Tenants to respond to continuous change are increasingly looking to reduce the amount of core space they own, with the majority of their portfolio consisting of flexible space on short‐term leases to absorb the demands of individual projects, and outsourced space on a ‘just in time’ arrnagement for support functions. The paper concludes that the property industry today is changing from traders in real estate to an emerging role as value stream integrators and total service providers over the life of the tenant organisation.
Key performance indicators: Primary drivers of information systems design
Authors: Barkley Larry
Published: June 2007

As the demand for enterprise‐wide performance measurement of corporate real estate portfolios and service providers ever increases, the number of tools available to executives which claim to facilitate this has also grown. Starting by developing an understanding of key business drivers, this paper reviews the latest developments in performance metrics including key performance indicators, service level agreements, and how the emergence of web‐based data collection, access and presentation is transforming the role of information systems in supporting decision‐making processes.
The implications of discrete variables on portfolio management strategies
Authors: Stoner Stephen A. , Shlaes Noah D.
Published: June 2007

The authors present a series of variables driving corporate real estate strategy and discuss their interaction, with examples. Capital structure, geographical diversity, product and service lines and corporate culture can combine to create strategy, and strategy can be directed to affect any of these.
Flexibility in the workplace: Instrumental or creative?
Authors: Pullen Wim
Published: June 2007

Workplace innovation is a much‐described subject. Workplace innovation is usually introduced to increase flexibility. Workplace knowledge is, most of the time, institutionalised in formal tools. These tools compete with creativity of employers, employees and professionals. This paper describes the quest for frameworks helping professional advisers to grow in knowledge and understanding of workplace innovations. The experience of the Dutch Government Buildings Agency is used to illustrate the search. A research agenda is given.
Relocation and expansion: Using processes and information to deliver success
Authors: McEnroe Kate
Published: June 2007

Although statistical data to support relocation and expansion decisions is more readily available than ever before, the best approach to successful projects remains a combination of science and judgment, which will always outperform a quick and dirty mathematical equation. This paper looks at how to develop such a methodology by keeping in perspective those factors critical to success, taking the time to correctly interpret the data available and including all of the players who must live with the outcome of the project.
Towards customer delight: Added value in public sector corporate real estate
Authors: Wilson Chris , Leckman Joan , Cappucino Kahlil , Pullen Wim
Published: June 2007

This paper explores the findings emerging from the inaugural conference of a new network called the World Wide Workplace Web, an international forum for future real property leaders mainly within public sector real estate organisations. It focuses on the challenges of defining and demonstrating value added in the field of public sector corporate real estate. What is perceived as value added within the public sector CREOs? Is the meaning of added value evolving in the eyes of the customer? How are public sector CREOs partnering with customers to establish value, demonstrate their performance against customer expectations and continuously improve the way business is conducted in light of the feedback received? The paper is applicable to both public and private sectors, but refers frequently to a public sector context.
Outsourcing: Opportunities and challenges for corporate competitiveness ‐ Part 2
Authors: Glagola John R.
Published: June 2007

This is the second part of a two‐part paper. Part 1 (JCRE 1999 Vol. 2, No.1) discussed
basic issues and concepts surrounding the outsourcing process, including the influences that drive the process, the factors that shape the process, and potential outcomes, touching briefly on complications and challenges that the client may encounter. Part 2 addresses the pragmatic aspects in some detail, offering concrete suggestions suggestions for managing the entire outsourcing process more effectively.
Funky offices: Reflections on office design in the ‘new economy’
Authors: van Meel Juriaan , Vos Paul
Published: June 2007

This paper discusses office design in the ‘new economy’. Office buildings of dot.com companies seem to be dominated by colourful materials, luxurious facilities such as gyms or lounge areas and gimmicks such as jukeboxes and pool tables. Employees ‘float’ around in these offices wherever and whenever they want. Such work environments seem very attractive and productive. Still, the meaning and relevance of such ‘fun offices’ can be questioned. In this paper the authors try to explain where this informal and casual office style comes from, relating it to labour market developments and changes in organisational culture. Secondly, they discuss the merits of ‘fun’ office design. How does it affect people’s creativity, their ideas about work and the distinction between work and private life?
Towards global outsourcing: Leveraging value for an international portfolio
Authors: Lyons Edward R.
Published: June 2007

Globalisation is one of the key economic, political, social and technological drivers of our age. Concurrently, outsourcing worldwide has topped US$1tn per annum.2 In the future, the strategic management of corporate real estate (CRE) will no longer be viewed in isolation from these trends, as the ethics of corporate governance demand that multinational companies view their property assets from the same global vantage point as any other factor of production. This paper looks at the compelling drivers towards an international approach to CRE management, the benefits of leveraging value across borders and key solutions to the apparent paradox of global consistency and cultural diversity. It draws on outsourcing research in other markets, pinpoints trends and directions and uses case study examples in order to propose a new holistic approach to strategic property management.
The location and site selection decision process: Meeting the strategic and tactical needs of the users of corporate real estate
Authors: Barovick Barry , Steele Chris
Published: June 2007

Instead of reacting to requests for space, CRE executives should be included in any location selection decision‐making process in order to understand the drivers for the action, and to ensure that the real estate solution prpoerly serves the business need. A comprehensive site selection process is one which works from the strategic goals of the company through identifying the business need for the new or consolidated operation, through the tactical tasks of identifying appropriate candidate areas, evaluating those areas, determining the fiscal impact of the move, and on through the implementation of any resulting action.
Transformation of the real estate function into a corporate strategic business partner
Authors: Yontz William L.
Published: June 2007

For the corporate real estate executive who is in the process of transforming the department to be a strategic business partner, this paper presents examples of initiatives used to ensure the workplace is aligned with the long‐term corporate strategy. This paper analyses the benefits of corporate real estate being viewed as a business partner in addition to a service provider.
European versus US corporations: A comparison of property holdings
Authors: Laposa Steven , Charlton Mark
Published: June 2007

This paper compares the corporate property holdings of European and US corporations. The authors initially calculate standard benchmarks based on accounting and balance‐sheet information as of 1999, and then test for significant differences by two‐digit standard industrial classification levels between European and US firms. They follow the methodology of Johnson and Keasler (1993) and compare property, plant and equipment book values to a variety of non‐property balance sheet and market value figures. However, this paper extends previous research through a comparative analysis of 1,573 US firms to 2,182 European firms. The findings suggest there are significant differences between Europe and the USA, dependent on the specific benchmark and industrial sector. The conclusions postulate a variety of explanations of the corporate property differences and provide ideas for further research.
International Accounting Standards: A paradigm shift for corporate real estate?
Authors: Eccles Timothy , Holt Andrew
Published: June 2007

This paper is concerned with International Accounting Standards (IAS) and their impact upon existing accounting practices for property within the UK. It also anticipates the wider international and European demands for IAS. There are two primary points to consider. First, the European Union (EU) has stated that it expects publicly listed companies quoted on the stock exchanges of EU member states to adopt International Accounting Standards by 2005. Others are encouraged to do so, with an implication that this will become mandatory at some future date. In earlier papers, the authors examined the recent changes within property accounting and the role played by property professionals within that process. This paper examines the requirements of international standards within the context of the British position as explained earlier. Differences are noted, the contrasting debates analysed and suggestions offered for corporate real estate professionals to consider. Secondly, unlike British Accounting Standards, IAS do not recognise property professionals or any professional organisation representing them, such as the International Valuation Standards Committee (IVSC), and none of their regulations are represented within the standards. This situation is examined, and commentary provided upon the repercussions and possible solutions.
Energy procurement in a deregulating United States ‐ Part 2: Key considerations and criteria in long‐term energy commitments
Authors: Hagy James , Flynn Chris
Published: June 2007

The advent of retail deregulation (liberalisation) in the United States electricity markets provides the major energy users, for the first time, significant choice in energy procurement. With choice comes responsibility for sorting the wide range of potential services, associated risks and variables in price. As deregulation has progressed, the emerging market has not yet reached maturity for retail customers, resulting in significant price volatility and imbalances in supply in some regions. This paper, presented in the Journal in two parts, of which this is the second, explains the fundamentals of energy choice for commercial and industrial energy users and the criteria to be considered in making long‐term energy commitments.
Tomorrow’s offices through today’s eyes: Effects of innovation in the working environment
Authors: Vos Paul , van der Voordt Theo
Published: June 2007

Many organisations have changed to new ways of working, steered or followed up by design interventions and sharing of activity related workplaces. Expectations have been high. Innovative offices should lead to more efficient use of space and other facilities; greater job satisfaction; the projection of a positive image to clients; an improved performance of the organisation and its staff; and reduced costs. Have innovations in the working environment fulfilled these high expectations? Are the new offices really more efficient and more pleasant to work in? Or will constant changing of the workplace reduce satisfaction and productivity? What are the ‘pros’ and ‘cons’ of teleworking? Are the extra costs of nice ergonomic furniture, high‐tech information and communication technology (ICT) and image‐boosting gadgets counterbalanced by the expected profits in higher productivity and more efficient use of space? Evaluative research results show a mixed picture. Besides the considerable satisfaction with the attractive design and the improved opportunities to interact, there are many complaints about problems in concentrating on work. Psychological mechanisms, such as the need for status, privacy and individual territory, do not necessarily hinder ‘flexi‐working’, but only when the new situation provides considerable added value. Teleworking offers more freedom of choice, but there are attendant risks.
Moving forward: Beyond cost per square foot ‐ the other critical success factors
in workplace change projects
Authors: Drake Alan
Published: June 2007

Real estate success is frequently defined within a narrow frame: capacity, budget and time. However, setting the real estate decision within the broader context of the business ‐ leveraging the connections to do more than simply house the workforce ‐ expands the value equation. Understanding how the various components of the business interact and how the facility can help or hinder that collaboration, while remaining cognisant of one‐time and life‐cycle costs, is likely to drive more robust real estate decisions.
Corporate real estate financing methods: A statistical study of corporations’ choices
Authors: Redman Arnold L. , Tanner John R. , Manakyan Herman
Published: June 2007

This study examines the financing methods used by corporations to acquire real estate for their operations. It also examines the opinion of managers about the factors that they consider in choosing financing methods. The data were provided by a survey questionnaire that was sent to members of the International Association of Corporate Real Estate Executives. It was found that companies rely on internal financing (operating cash flows) and external financing such as long‐term leasing, joint ventures, property mortgages and sale/leaseback arrangements. The top‐ranked methods of finance include operating cash flows, property mortgages, leasing and sales/leasebacks. Use of real estate investment trusts, collateralised mortgage obligations and mortgage‐backed securities were the lowest‐ranked forms of financing. Managers tend to look at tax advantages of debt and availability of cash flows in deciding which financing methods to use, rather than theoretical corporate finance factors such as bankruptcy cost. There were significant differences in opinion by industry and by company size regarding the use of cash flows and the impact of debt financing on common stock prices.
Leasing issues and provisions in the face of catastrophic loss: A post‐11 September
discussion
Authors: Skinner Philip G. , Schear J. , Katz Seth S.
Published: June 2007

The tragic events of 11 September 2001 have caused people in all walks of life around the world to pause and reflect about what is important to them. With the World Trade Center, one of the icons of global capitalism and New York’s skyline, reduced to a heap of burned and twisted rubble at ‘Ground Zero’ in lower Manhattan, the world of commercial real estate is undergoing a time of reflection in the wake of these unbelievable events. While the catalyst for this time of reflective analysis was at the same time both horrific and compelling, the careful consideration of relevant lease issues and of the need for disaster recovery planning that has resulted will help everyone to be better prepared for unexpected events of any kind in the future. The purpose of this paper is to identify three standard lease provisions that have always been important, but now bear even closer scrutiny in the aftermath of the catastrophic losses of 11 September. These provisions are: Casualty; Interruption or Unavailability of Services; and Insurance. Most form leases contain provisions that address these subjects and raise various issues that are ripe for re‐examination. This paper discusses how such issues might be analysed (or re‐analysed) in the aftermath of this senseless tragedy. Please note that the legal conclusions, practices and norms outlined in this paper are generalised from a United States perspective and, as such, the norms and potential solutions may vary in other countries and on a case‐by‐case basis within a country. Further, the starting point and, often, the ending point in the analysis of any leasing issue is the specific language of the lease, which itself is subject to any applicable laws of the relevant legal jurisdiction. It is important to consider the issues and analysis discussed in this paper in light of the specific market norms and laws of the jurisdiction which are applicable.
Smart communities and smart growth ‐ Maximising benefits for the corporation
Authors: Hughes Charlie , Spray Richard
Published: June 2007

This paper addresses the relevance of ‘smart communities’ to corporate real estate. It defines smart communities within a context of smart growth, ethical investment, brownland regeneration and sustainability and seeks to explore the potential of such communities to leverage value for the corporation, not just in terms of land value as bottom‐line benefit but also in respect of longer‐term added shareholder value as expressed by the positioning of the corporation within its community and its political access level. Focusing on corporations with significant non‐operational land banks, it addresses the problem, the potential and the process supporting this with a current example of best practice.
Strategic facility management and technology: The case study of the University of Calgary
Authors: Dennis Don
Published: June 2007

The Campus Infrastructure (CI) Department at the University of Calgary absorbed a 25 per cent reduction in its operating budget in 1995. As a result, it was forced to transform its business processes in order to provide the required level of services to the campus. Through its strategic planning process, it has implemented new technologies that have enabled the Department to meet this challenge.
Putting corporate real estate executives in the driver’s seat: Information technology tools enable new possibilities
Authors: Schriefer Audrey , Ganesh Jyoti
Published: June 2007

Tools for real estate planning, acquisition, disposition and portfolio management have improved dramatically over the past several years, creating new potential for corporate real estate executives to deliver workplace solutions
in a more timely, cost‐effective manner throughout the occupancy life cycle. As large ‘customers’ in the real estate industry, corporate real estate (CRE) executives can impact the development and application of the next generation of information tools. In addition, widely expanded access to market information puts them in a more powerful position relative to other industry players. These factors uniquely position CRE executives to take advantage of new possibilities.
The global corporate real estate function: Organisation, authority and influence
Authors: O’Mara Martha , Page Eugene F. , Valenziano Stephen F.
Published: June 2007

The Global dispersed corporate real estate operations and decision making processess of 26 international companies in six industry segments are compared. High standing CRE organisations, which are indicated by fewer levels between the CRE executive and CEO, frequent CRE meetings with senior management, a broad span of control for facility and real estate operations, and an executive committee for real estate matters, share common characteristics. High standing CRE organisations receive more strategic planning information, have more authority and power, and more formal policies and standards. Use of relationship management with business units also corresponds with better sharing of planning information. Some of the challenges faced today by firms carry large international real estate portfolios include: cultural issues, financing concerns, lack of local expertise/market knowledge, corruption in locales, and a lack of a standard/streamlined process.
Corporate real estate and business continuity: An integrated enterprise conceptualisation
Authors: Msezane Temba , McBride Jeff
Published: June 2007

This paper explores the strategies and roles for the organisation’s corporate real estate function
during times of increased uncertainty. Although business continuity planning (BCP) might appear to be a separate and unique effort, there are synergies between continuity planning and standard business planning functions. It is suggested that enterprises should avoid the historically common mistake of stove‐piped planning within the context of BCP. Rather, enterprises must fully embrace an integrated approach to business continuity from crossfunctional to cross‐informational. If done correctly, business continuity planning can become a strategic asset that fully leverages an essential factor, the corporate real estate function.
Transformational outsourcing: Delivering on the promise
Authors: McBlaine Richard , Moritz Debra
Published: June 2007

When the subject of outsourcing originally surfaced in the corporate real estate community, the process was promoted as both a tactical resource and a strategic opportunity. Tactical objectives included the obvious: increasing
the efficiency and reducing the cost of traditional real estate activities. Strategic prospects focused on broader goals. Real estate would be managed dynamically to serve the corporation’s comprehensive business and financial objectives. The corporate real estate function would be elevated in the organisational hierarchy as a result. What happened to this vision? That which was promoted as a strategic partnership has, in many cases, turned out to look far more like a traditional customer/vendor relationship. Strategic advances have been limited. Financial performance may have been boosted initially and incrementally as real estate headcount was moved off one balance sheet and onto another. But, in general, outsourcing has not helped the corporate real estate function emerge as a strategic business force. It is entirely possible to revive and redefine an outsourcing relationship, so that it delivers on the strategic promise that both clients and service partners have found so attractive and yet so elusive. The challenge lies in creating and maintaining a real partnership between the corporate real estate team and the service provider. The key is to determine what needs to be done on both sides of the relationship to make it work effectively.
A blueprint for the successful implementation of a corporate headquarters project: The case study of
Swiss Re Germany AG
Authors: Pongratz Martin
Published: June 2007

Based on a case study of the new Swiss Re headquarters in Munich, Germany, this paper outlines key design and planning principles integral to achieving an outstanding project result, both from the functional and the architectural point of view. A special focus is given to various simulation techniques which in very early planning stages helped to evaluate important planning options and which were instrumental to the project’s success. The new headquarters of Swiss Re Germany were inaugurated in winter 2002. The consultancy firm of the author was extensively involved in the project.
SBC Communications’ process for strategic and portfolio planning
Authors: Wagner Richard D. , Miciunas MCR Gary A. , Knapp Curtis , Mach Christopher
Published: June 2007

This paper presents the process and outcomes of developing a national capability for strategic and portfolio planning within SBC Communications, Inc., a Fortune 100 company, and reviews the progress made and lessons learned since this initiative was implemented in October 2001. At this time SBC Corporate Real Estate standardised the planning approach used by its regionalised staff in order to achieve consistent business practices. This multidisciplinary effort involved process design, development of tools and templates, training and deployment, facilitation and mentoring, production of prototype plans, and ongoing coaching during implementation in 2002. The new approach, featuring scenario planning and economic modelling, has elevated planning services to an advisory level by emphasising shareholder value while satisfying business unit needs. Within the first year of implementation, the process has been fully endorsed by corporate leadership and adopted by business unit management. Refinements to the planning approach and enhancements to the methodology are being incorporated on an ongoing basis as part of a continuous improvement programme.
Aligning corporate real estate with evolving corporate missions: Process‐based management models
Authors: Acoba Francisco J. , Foster Scott P.
Published: June 2007

In their recent client engagement experience and benchmarking research, the authors have found that successful management models for corporate real estate (CRE) organisations begin with integrated, robust processes, and not well designed organisational charts. As corporate missions can quickly change focus from high growth to cost reduction, the key to successful integration of all CRE elements is engaging in a strategic planning process that not only aligns the facilities infrastructure with the core business, but also drives CRE organisational initiatives relative to processes, people and enabling systems. This paper attempts to capture a practical framework for CRE managers to evaluate changes to the core business and determine what implications these changes will have on both the CRE portfolio and organisation.
Interaction, identity and collocation: What value is a corporate campus?
Authors: Becker Franklin , Sims William , Schoss Johanna H.
Published: June 2007

Corporate campuses have been justified on many grounds, including lower operational costs, greater flexibility, stronger corporate branding and enhanced cross‐functional communication. Despite the tens of millions of dollars spent to acquire and develop them, little research exists that has systematically tested the validity of the benefits attributed to a corporate campus. This paper reports on an initial set of case studies examining one potential benefit of a corporate campus: the nature and extent of communication across organisational units. The results suggest that the amount of cross‐unit communication on a corporate campus may be less than expected. Implications for workplace and collocation strategies are discussed.
Re‐thinking corporate real estate after September 11th
Authors: Laing Andrew M.
Published: June 2007

Surveys of corporate real estate executives in North America and elsewhere in the world indicate significant shifts in their thinking in the aftermath of the terrorist attacks on the World Trade Center and the Pentagon. Aside from the predictably much greater concern with planning for emergency escape from buildings, executives indicated that the greatest shifts in their thinking centred around issues of security of information technology and communication systems; greater use of teleconferencing and video‐conferencing (reducing travel); and more new ways of working such as homeworking, satellite and neighbourhood work centres, and hotelling. Along with such changes in practice, executives also indicated the desire to create stronger communities within their organisations, even as they also expect further to disperse their activities across locations. There is a slight shift in preference away from downtown locations and a much higher overall concern with occupancy control over the spaces that they occupy. In North America especially, there is a shift away from occupancy of high‐profile named buildings. Overall the surveys indicate that corporate real estate executives are moving ahead with distributed work‐location strategies, increasing their reliance on virtual technologies for collaboration, and re‐thinking the branding of their physical assets and the nature of community in their organisations. All of these changes further indicate the increasingly integrative role of corporate real estate within wider business strategy and a closer alignment of corporate real estate activities with human resources, organisational development and information technology.
German corporate property and the conflict between real estate investment and operating resources
Authors: Pfnuer Andreas , Armonat Stefan
Published: June 2007

A great number of German companies are suffering an acute financial crisis. Financial optimisation of the substantial property holdings owned by German companies offers an opportunity to reduce costs and to free up capital. However, the demands on property for operational purposes create difficulties when optimisation is carried out exclusively for financial objectives. In this paper it will be shown, by means of an empirical investigation of real estate directors and financial managers of the leading German undertakings, that companies are failing to take the decisive step towards optimisation. The reason for this lies in inadequate internal preparations, manifested in the lack of a linkage between real estate strategy and corporate strategy. Property rights‐oriented analyses of real estate assets create new scope to refinance existing holdings, without sacrificing the important requirements of the units occupying them. This paper discusses the essential steps to a solution and explains the potentials that can be enhanced by a structured financial optimisation of property holdings.
Corporate real estate and Sarbanes‐Oxley: Web‐based tools for ensuring compliance and improving financial management
Authors: Meyer Matthew
Published: June 2007

This paper discusses the new SEC reporting requirements passed under the Sarbanes‐Oxley Act in 2002 and its impact on real estate and corporate facilities management data. It will review the impact of this Act on the corporate real estate executive and how corporate real estate groups will be able to benefit from the Act to solve an intrinsic problem in the CRE world today. This problem is the lack of an enterprise‐level technology solution that can integrate and unite all of the workplace data that may be required to fulfil these new SEC reporting requirements and enable management adequately to certify an internal control system for compliance with Sarbanes‐Oxley. A case study on web‐based workplace resource management (WRM) solutions is presented to guide real estate executives to an answer to this problem, as well as to provide an overall solution for greater operational excellence and cost efficiency.
The case for simple comparison: A simple performance scorecard for effectiveness and efficiency
Authors: Lubieniecki Edward C. , Desrocher Nina J.
Published: June 2007

Corporate real estate (CRE) service delivery is experiencing a paradigm shift. A short period ago, the focus was on speed to delivery ‐ how quickly the CRE department could identify, procure and prepare space for the expectant workforce. In today’s economic environment, CRE departments are focusing on ways to become more effective and efficient in their use of resources. The development and use of a simplified scorecard, based on Kaplan & Norton’s Balanced Scorecard, can assist in refocusing activities. In this paper, the authors propose a Simplified Scorecard framework and development process which serves to focus CRE efforts on a minimal number of factors, aligned with corporate strategy, thereby assisting the CRE department in achieving greater corporate success. Moreover, the proposed scorecard offers a manageable number of performance metrics for measuring and monitoring portfolio efficiency and effectiveness. Such a scorecard is needed to form a common understanding of key corporate success factors, manage CRE resources, prioritise CRE activities and compare a company’s real estate performance against that of its peers.
An overview of The Terrorism Risk Insurance Act of 2002
Authors: Mixter Stephen , Owendoff Michael
Published: June 2007

The intent of this paper is to provide an overview of the principal provisions of the Terrorism Risk Insurance Act of 2002 (the ‘Act’),1 which became law in the USA on 26th November, 2002, and the practical effects which the Act has had on the state of terrorism insurance coverage as it had evolved between 11th September, 2001 and the passage of the Act. The Act voids some of the exclusions which had made their way into insurance policies (particularly post‐9/11) relating to losses from certain ‘acts of terrorism’ (as defined by the Act) and requires insurers meeting certain criteria to ‘make available’ terrorism insurance coverage to their insureds. The Act also establishes a temporary federal reinsurance programme which provides a system of shared public and private compensation for insured losses resulting from certain certified acts of terrorism. From the standpoint of the average insured, however, the practical impact of the Act has been far less dramatic than may appear on the face of it. As The Department of the Treasury explained in its Final Rule,2 one of the main purposes of the Act was to address market disruptions that resulted in the aftermath of the September 11th terrorist attacks on the USA and to ensure the availability and affordability of property and casualty insurance for certain risks associated with acts of terrorism. In addition, the Act was designed to provide a transitional period for the private insurance markets to stabilise, thereby allowing insurance companies to resume pricing terrorism insurance coverage. The Act also sought to build capacity in the insurance industry to absorb any future losses, while preserving insurance regulation and consumer protections in the individual states.
Using information and innovation to reduce costs and enable better solutions
Authors: Roberts Simon , Daker Ian
Published: June 2007

This paper outlines how the UK Royal Mail Group Property Holdings selected the relevant SAP modules (Real Estate, Project Systems, Material Management, Plant Maintenance) to provide their management information system
(MIS) requirements. It discusses the business case, how the project was managed, the benefits to date (18 months after implementation) and the key lessons learnt. Hopefully the paper will allow the reader to understand the context for the project and how the selection decision was reached, the general approach to the benefits case (quantified and unquantified), the key aspects of the implementation, governance, project team, training and key lessons learnt. While every property organisation is different and the challenges are unique, a number of the issues are likely to be the same even if the solutions are different.
The lease audit clause: Is it fair for tenants?
Authors: Harris Edward
Published: June 2007

Highly restrictive commercial lease audit clauses have come into vogue in commercial leases over the past decade or so. Their original purpose was to provide a means by which the tenant could verify that the landlord’s accounting was reasonable and proper. The reason for its popularity with landlords is that it has evolved into a tool that allows landlords to capture funds in excess of the agreed‐upon deal based on the intent of a lease contract. Audit clauses typically relate to operating expense statements ‐ sometimes referred to as either OPE (operating expense) or CAM (common area maintenance) statements. Audit clauses have also been used, but with less frequency, by landlords for other billing categories, including electricity surveys and other tenancy‐related charges. Landlords have a fiduciary responsibility to bill their tenants properly. There should be full disclosure and transparency of the detail relating to a landlord’s calculations behind any and all bills rendered to a tenant. Lease audit clauses that limit tenant rights to transparency in a landlord’s billing system should not be allowable. Lease audit clauses are viewed by savvy end‐user tenants as a landlord’s ‘licence to steal’. Time‐limited lease audit clauses motivate landlords to overcharge their tenants: once the audit time limits have passed, the landlord may capture improper payments made by trusting and unsuspecting tenants. The audit clause is generally unfair to a tenant and as such should not be allowed in leases. If one must be present in a commercial lease, then it should at least be tied to a reasonable time frame ‐ such as the local jurisdiction’s statute of limitation, or a minimum of three years. Whether or not an audit clause exists in a lease, a tenant should make every effort to have a specialist lease audit firm review the lease and billings regularly to ensure compliance with specific lease language.
The convergence of disparate technologies and the impact for corporate real estate
Authors: Geaney John
Published: June 2007

In the same way that markets consolidate as they mature, technologies also tend to converge, so that over time more and more application areas can be served by the same technology. As technology that was once firmly in the domain of traditional information technology (IT) converges with areas such as building systems and telephony, it presents opportunities and challenges for real estate providers and their customers as well as for the technology solutions providers.
FRS 12: Guidance on implementation for corporate real estate managers
Authors: Cooke Howard
Published: June 2007

Financial Reporting Standard 12 was introduced in 1999 with no guidance notes on how to deal with property. The key points of this paper consider how real estate needs to be dealt with: corporate real estate managers need to
assess liability, before considering whether it is material; the sums to be discounted; and annual reviews needed.