The Expanded Role of CRE
The function of the corporate real estate (CRE) department is moving beyond reducing occupancy costs to introducing sustainability initiatives and other innovations.
Area Development Research Desk (Summer 2012)
The global financial crisis created a seat in the C-suite for corporate real estate executives charged with reducing occupancy costs. With the crisis receding, corporate real estate executives seeking to retain their C-suite access are bringing new ideas to the table, says Doug Sharp, International Director at Jones Lang LaSalle.
With the crisis receding, corporate real estate executives can retain their C-suite position by bringing new ideas to the table, says Doug Sharp.
After several years of consolidating facilities and reducing occupancy costs, corporate real estate executives are going beyond cost cutting to offer strategies for enabling work and boosting productivity. "You can only cut so many costs," says Sharp. "As soon as you talk about how to enable work, you're bringing value. That's a very different conversation."
Innovation is playing a critical role in the new thinking about corporate real estate strategies. Corporate real estate executives can boost the return on company assets by creating facilities that, for instance, bring departments closer together and make it easier for to collaborate and streamline workflow. "A conversation about how the workplace can be more efficient is one that C-suite executives would love to have," says Sharp. "Innovation is the key to that conversation."
When it comes to sustainability, corporate real estate departments tend to focus on recycling and energy-efficiency programs, says Michael Jordan, Vice President of Sustainability Strategy for Jones Lang LaSalle. But these programs are only a starting point. Taking the concept many steps further, KeyBank's corporate real estate department sought to become a true business partner with the rest of the organization as it began to integrate sustainability into daily operations. KeyBank's sustainability initiative created a "great opportunity" to change the conversation from focusing on efficiencies and operations to looking at how the company could be a better corporate citizen.
Michael Jordan describes the experience of KeyBank, which is creating a sustainability program focused on shareholder value.
"The real opportunity for impact comes in shifting away from corporate philanthropy and volunteer programs to leveraging employees' passion for sustainability," says Jordan. "Once you teach employees about climate change and sustainability in a bank, for instance, those employees are much better equipped to make investment decisions about renewable energy, to gauge the environmental risks inherent in a lending program, and to better engage with consumers. And they become more engaged with their company, leading both to top-line improvements and cost savings."
KeyBank has staked out a leadership position in its industry with its companywide sustainability program focused on building shareholder value and inspiring employees.