State of the Industry Report 2007-2008

Chapter Three eXeCutIVe summary of key ConClusIons The expansion of the global economy is proceeding at an unprecedented rate, and corporate real estate (CRE) is playing a central role as multinational companies continue entering emerging markets, integrate their real estate holdings with the business plan, and leverage practices in sustainability, workplace, location selection and talent recruitment. It’s a step change, especially as the global CRE outsourced delivery model becomes more sophisticated. As part of these trends, CoreNet Global benchmarked the transformation to the globally networked enterprise in 2004 as part of our Corporate Real Estate 2010 (CoRE 2010) future-facing research focus. Intellectual capital and knowledge work are now key assets. Plus, the nature of work is changing fast. These factors have placed CRE executives in strategic leadership roles on behalf of their C-Suites and business units, as foreseen by CoRE 2010. Our Applied Research Center, Discovery Forum and other findings in 2007 reflect some big changes since 2004, however. New drivers like energy conservation, carbon reduction, the war for talent, technological change, location strategies and flexible workplace practices have either pronounced themselves for the first time or accelerated faster than expected, compared to our 2004 baseline. With these and other big changes, companies are increasingly using CRE as a resource for the entire company. Our key findings for 2007 show that CRE is uniquely qualified to enable corporate global expansion as we touch every aspect of the corporate organization • We increasingly have a ‘balcony view’ of the enterprise • We’re solutions providers and integrators supporting the C-Suite, business units, other internal shared services like HR and IT • Solutions support the business, not real estate • CRE leaders are increasingly coming from other parts of the corporation growIng Cre lInkage to the CapItal markets Because of the increase in corporations doing saleleasebacks at the portfolio level instead of individually, CRE’s linkage to the capital markets is rising dramatically. “Get used to it,” a senior-level executive recruiter advised top-rung CRE people in 2007. The result of this major portfolio ownership shift is that CRE executives and their service providers need more knowledge about the capital markets. But few CRE departments today have that expertise on staff or among their outsourced corporate service providers unless they’re already directly linked to REITs, equities or some other investment or ownership channel. ‘The linkage to the capital markets is very relevant - we are seeing many dispositions following bank acquisitions and also sale and lease backs where corporations want to reallocate capital. We are also seeing some acquisitions where companies want to reduce operating expenses through ownership.’ ‘We have one example of a REIT being set up to own a major corporation’s operating assets, again as a vehicle to release capital.’ These and other changes are why more CRE leaders are coming from financial or business unit backgrounds, and not necessarily directly from real estate. ‘We need business people on our team….not real estate people on our team’ chapter three State of the Industry 2007-2008 11 http://www2.corenetglobal.org/home/index.vsp

Table of Contents Feed for the Digital Edition of State of the Industry Report 2007-2008

State of the Industry Report 2007-2008 Contents Chapter 1: Introduction : CoRE 2010 Framework and Report Structure Chapter 2: The Changing Business Environment Chapter 3: Executive Summary of Key Findings and Conclusions Chapter 4: CoRE 2010 Adoption Rate Chapter 5: Sustainability/Corporate Social Responsibility Chapter 6: Global Sustainability Survey and Roundtable Findings Chapter 7: Workplace Practices/Work Environments Chapter 8: Workplace Related Issue: The War for Talent Chapter 9: Asset Management/Portfolio Optimization Chapter 10: Solutions Delivery Chapter 11: Location Strategies/The Strategic Role of Place Chapter 12: Location Related Issue: Site Selection Morphs to Portfolio Alignment Chapter 13: Strategic Competencies/Enterprise Leadership Skills Chapter 14: Competencies Related Issue: The War for Talent in Corporate Real Estate (CRE) Chapter 15: Integrated Resources Infrastructure Solutions – IRIS Chapter 16: Technology and the Web Chapter 17: Technology Related Issue: Removing the Obstacles to Industry Data Standards Acknowledgements and Sources

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.