CoreNet Panel: Corporate RE Departments Focused on Global Growth, New Workplace Strategies

Corporate real estate departments are focused more than ever on supporting corporate expansion into new global markets and transforming workplaces into more collaborative areas to attract talent, according to a panel of top corporate real estate professionals and service providers. The panel, co-sponsored by CoreNet Global and CPN, convened Monday at the CoreNet Global Summit in San Diego. All panelists agreed that global expansion is a mandate at large corporations. While the economies of the United States and Western Europe are challenged by the economic slowdown, Nokia sees significant expansion opportunities in countries such as Brazil and other markets in Latin America, Russia and emerging countries in Africa. “We want to be less reliant on the U.S. and Europe,” said Mark Tamburro (pictured), vice president of workplace resources at Nokia and CoreNet Global’s chairman-elect. He said that Nokia’s real estate department must enable the company to have the “flexibility and agility” to grow globally. “We have to have the real estate portfolio to support that change,” Tamburro said. Growing in India and China is a major initiative for Cisco Systems Inc, according to Mike Zamora, senior manager for the Asia and Pacific regions for the company. But, finding real estate professionals on the ground to support expansion in Asia can be a challenge, he said. When Zamora worked in Asia as a consultant 12 years ago, he said many real estate brokers were “like marriage brokers–here’s the tenant, here’s the landlord, now pay me.” While he said things have improved, what he called “a shallow labor pool” is a challenge to many corporate expansion plans. Corporate global expansion plans have meant that service providers must continue to stay ahead of the curve, according to Richard Bertasi, vice president of global real estate and facilities management for the EMEA region of Johnson Controls. Johnson Controls has become less “geographic centric” and more “customer centric” to support its clients’ global expansion. Clients are focused not only on growing in India and China, but Johnson Controls’ clients have asked the company to provide services in Pakistan and Angola. Bertasi said Johnson Controls will not gain a large return on investment by having a presence in Angola, but has a presence there to support its client base. Crafting more open workspace, to encourage collaboration, and instituting mobility programs are major initiatives for Sun Microsystems Inc. Sun’s senior vice president of workplace resources and chairman of CoreNet Global, David Harris, said 45 percent of Sun’s employees are now “flex,” that is, do not have an assigned office space. The bar has been raised for employees to use individual office space less and less, he said. “It’s exciting, it’s game-changing,” Harris said. “This is what millenials are expecting.” For Tamburro, offering employees greater flexibility is a key way to attract new talent. “You have to give people the choice of how they are going to work,” Tamburro said. The slowing U.S. economy has provided opportunity for service providers, said Karen Ellzey, executive managing director for global corporate services at CB Richard Ellis Inc. Corporations frequently look to service providers to take a fresh look at their real estate portfolios, she said. “Companies may want to take a second or a third look at their office occupancy,” Ellzey said. A city or regional economic development can also help a company navigate an economic downturn, said Mary Jane Olhasso (pictured), director of economic development for the City of Ontario, Calif. For instance, such an agency can assist an entrepreneurial company gain greater access to growing markets in Asia, she said. “For a large company, it means making sure they are taking advantage of tax breaks,” she said. (Commercial Property News will run extended excerpts from the Roundtable in the June issue.)