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CRE Models:
What's the Right Model for You
#CNGSanDiego
Stan Gibson
Senior Vice President, Wells Fargo
• Stan leads Strategic Planning at Wells Fargo,
100+ MSF globally. He’s been with Wells Fargo
for 6 years and has been in the industry for 30
years.
• Previously, he was with Principle Financial Group,
Vantage Real Estate, and Lincoln Property
Companies.
• Stan has been teaching MCR classes for Corenet
for 15 years, and has been voted Top Faculty for
the 12 years. He teaches Real Estate
Transactions Impact and Portfolio Restructuring.
Mark Wanic Americas Head of Occupier Services, Cushman & Wakefield
• Mark leads Cushman & Wakefield’s Americas
Occupier Services business for all corporate
accounts.
• Prior to his current role, Mark led the Occupier
Services business in the NY area and served as
relationship manager for several large corporate
accounts.
• Previously, Mark held several real estate and
sales roles at Computer Associates, Inc. and
Lucent Technologies (now Alcatel-Lucent),
including living in the Netherlands where he
directed Lucent’s International Real Estate
Operations. Mark received his B.A. in Marketing
from Benedictine University
Steve Forino Director, Global Real Estate, United Technologies
• Steve is the Head of Real Estate at United
Technologies Corporation, a $60B global
conglomerate, and is responsible for 4,500 locations
and 98 million square feet of real estate globally.
• Steve has been with United Technologies for 23 years
in various financial roles and has been the Head of
Real Estate for the past three years.
• He has a BS in Accounting from Post University and
an MBA in Finance from Rensselaer Polytechnic
Institute.
Adam J. Hoy Global Real Estate Director, Unilever
• Adam has been with Unilever, a $60B
European-based FMCG Company,
approximately 2 years and leads the Real
Estate Services group covering global
transactions, lease administration, and
strategic portfolio planning.
• Before joining Unilever, Adam spent 11 years
at Pfizer in a variety of Real Estate, Facilities,
and Procurement roles.
• Adam received his BSBA from Bowling
Green, MBA from Saint Louis University, and
is currently working on his Master’s in Real
Estate Strategy at NYU.
Sally A. Fisher Sr. Director, Global Real Estate Strategy & Americas Transactions
• Sally is Senior Director of Pfizer’s Real Estate
function which provides global strategic planning
support and delivers on Americas real estate
transactions. Sally recently joined Pfizer earlier this
year.
• Previously held positions with Union Bank in
Portfolio Strategy, Cushman & Wakefield in Account
Management, and Jones Lang LaSalle in Corporate
Solutions and Advisory. Prior to corporate real
estate, she spent 15 years in management
consulting.
• Received undergraduate degree in Social
Psychology from San Francisco State University and
her MBA from the University of Michigan. She also
holds a Masters in Real Estate Development from
the University of Southern California and a Six
Sigma certification at the black belt level.
Al Ronci Executive Director, Morgan Stanley
• Al is the Head of Retail Real Estate, Strategy, and the
Client Relationship Manager at Morgan Stanley, he
responsible for ~800 locations and 12 million square feet
of real estate nationally.
• Prior to joining Morgan Stanley, Al accumulated more
than 17 years of Corporate Real Estate and Design and
Constructions expertise, managing both Corporate and
Retail portfolios for Unisys Corporation, American
Express, and JPMorgan Chase. In addition, Al has 10+
years of experience at a top 100-ranked architectural
design firm.
• He currently serves on the advisory board of the New
York Institute of Technology School of Architecture, where
he earned his degree. Al has been a registered architect
with the state of New York since 1996.
Key Takeaways
• Factors to consider
• Impact of changing your model
• Understanding of spectrum of outsourcing
• Hear from companies with various models
What to Consider
• Geographic scope
• Resource management
• Workload leveling
• Culture
• Skills
• Impact on decision-making
• Pricing
• Impact of changing models
Outsourcing Spectrum
STRATEGIC ALLIANCE Provider and client partner change the business paradigm to create a
mutual and competitive advantage, sharing risks and rewards.
OUTSOURCED PARTNER Provides all services for a specific function to the exclusion of
other providers with shared goals and rewards.
EXCLUSIVE PROVIDER Provides one or more repetitive services based on more favorable
contract terms to the exclusion of other providers.
PREFERRED PROVIDER Provides one or more repetitive services based
on more favorable contract terms. May be
one of multiple providers.
SERVICE PROVIDER Provides discrete contract-based
service when and as needed.
COLLABORATIVE ALLIANCES Multiple providers ensure business continuity and
mitigate risk; all teams use consistent processes, tools,
performance measurement, and technology.
UTC Portfolio Overview
53% 37%
8%
Office
Industrial
R&D and Other
98 million square feet
4,504 locations in 73 countries
Variable target square foot per seat
16% owned 84% leased
UTC Real Estate Operations
Outsourcing Model
Single Provider by Region
• Goal
– In 1999, needed to centralize global real estate without the need
for a large internal real estate group
• Benefits
– Provides global/regional/local expertise at point of contact with
centralized oversight
– One global process to ensure information flow with ability to
expand/contract resources depending on volume
– Market pricing with revenue sharing
Finding the Right Fit
Single Provider by Region
Pros Cons
Centralized global management
One standard global process
Global knowledge base
Centralized data
collection/process control
Flexibility
Management intensive
Direct Business Unit
interface
Lower level strategic
development
Unilever Portfolio Overview
13%
80%
Office
Ind
Retail
R&D
Other
120 million square feet
1600 locations in 115 countries
Target 110-140 square feet per
person
63% owned 37% leased
CRE Team
South Asia
RES Director
North/Latin
America
RES Director
Europe/Africa
RES Director
SEAA/N Asia
NAMET & RUB
RES Director
Global RES
Director
Portfolio
Manager
Lease Admin
Coordinator
Lease Admin
Coordinator
Account Lead
N America
Account Lead
Latin America
RE Analyst
Account Lead
Europe
Account Lead
Asia
RE Support
Asia
Account Lead
NAMET &
RUB
RE Support
NAMET &
RUB
RE Analyst
RE Analyst
RE Support
Europe
Outsourced
Insourced
Outsourcing Spectrum
17
STRATEGIC ALLIANCE Provider and client partner change the business paradigm to create a
mutual and competitive advantage, sharing risks and rewards.
OUTSOURCED PARTNER Provides all services for a specific function to the exclusion of
other providers with shared goals and rewards.
EXCLUSIVE PROVIDER Provides one or more repetitive services based on more favorable
contract terms to the exclusion of other providers.
PREFERRED PROVIDER Provides one or more repetitive services based
on more favorable contract terms. May be
one of multiple providers.
SERVICE PROVIDER Provides discrete contract-based
service when and as needed.
COLLABORATIVE ALLIANCES Multiple providers ensure business continuity and
mitigate risk; all teams use consistent processes, tools,
performance measurement, and technology.
Outsourcing Model
Single Partner by Region
• Goals
– Simplify the structure
– Build relationship with one provider
• Benefits
– Alignment of 1 Unilever Regional Director: 1 Provider
– Simplified information flow through one point of contact at each
level of the relationship
Finding the Right Fit
Single Partner by Region
Pros Cons
Simplified communication
Standardized reporting
Standardized process for
completing transaction and
planning
Account status within
service providers’
organization
Capabilities aren’t as strong
in all markets
Diminished desire for service
providers to “compete” for
business
Limited access to talent in
broader CRE marketplace
Pfizer Portfolio Overview
24%
76%
Office
Other
50 million square feet
900 locations in 90 countries
Variable target square foot per seat
88% owned 12% leased
Pfizer Americas Real Estate
Transaction Manager
Americas Real Estate
Transaction Manager
Americas Real Estate
Portfolio Planning Manager
Transactions Analytics Manager
Transaction Manager
Service Provider 1
Transaction Manager
Service Provider 2
Sally Fisher
Senior Director,
Real Estate Strategy & Americas Real Estate
Tom Donatelli
Vice President,
Real Estate & Portfolio Management
Transaction Associate
Service Provider 1
Transaction Manager
Service Provider 2
Transaction Associate
Service Provider 2
Rick Lam
Director,
APAC Real Estate
John Westwood
Director,
EMEA Real Estate
Service Provider Integrated with
Pfizer Processes and Organization
• Accessed for Market Intelligence
• Start performing work upon Engagement Agreement only
• Included on project teams on a need-to-know basis
The view for Pfizer
needs to be
seamless
Pfizer Real Estate
Services Team Integrated Service
Provider
Market
Representation
(Brokerage)
The use of market representation (brokerage) needs to be clear
• We are one team, each with a role to play
• All held accountable to act in Pfizer’s best
interest
• Pfizer strategies kept confidential
• Involved in defining real estate requirements
Outsourcing Spectrum
23
STRATEGIC ALLIANCE Provider and client partner change the business paradigm to create a
mutual and competitive advantage, sharing risks and rewards.
OUTSOURCED PARTNER Provides all services for a specific function to the exclusion of
other providers with shared goals and rewards.
EXCLUSIVE PROVIDER Provides one or more repetitive services based on more favorable
contract terms to the exclusion of other providers.
PREFERRED PROVIDER Provides one or more repetitive services based
on more favorable contract terms. May be
one of multiple providers.
SERVICE PROVIDER Provides discrete contract-based
service when and as needed.
COLLABORATIVE ALLIANCES Multiple providers ensure business continuity and
mitigate risk; all teams use consistent processes, tools,
performance measurement, and technology.
Outsourcing Model
Two Partners per Region
Four Distinct Service Providers Total
• Goals
– In late 2009, after the closing of Wyeth acquisition, Pfizer had many real
estate consolidation opportunities across the globe
• Benefits
– Award work based on capabilities, competencies, and skill sets of
service provider staff, per state or region
– Allows Pfizer to focus on business engagement, strategic projects and
provider oversight, while Integrated Service Providers manage portfolio
planning & full ownership of transaction management
– Pfizer can manage a flexible scaling of resources, based on current
demand
– Pfizer focuses on milestones and critical communication points to
integrate people and processes
Finding the Right Fit
Two Providers
Pros Cons
Speed of execution
Leverage strengths and quality of staff in
each region
All held accountable to act in Pfizer’s
best interest
More incentive for value-add execution
Negotiated fee structure for services with
volume discounts
Flexible model for special projects
Clear role and responsibilities for each
team member
Model is dependent on sufficient
market activity to generate broker
fees
Lack of sufficient resources for
planning have led to over-reliance on
advisory services
Duplication of job responsibilities
between Pfizer staff and Service
Provider were difficult to work through
with “First Generation” contract
Morgan Stanley Portfolio Overview
95%
5%
Office
Data Center
17.4 million square feet
811 locations in 6 countries
Target 264 square feet per seat
18% owned 82% leased
CRE Organization
Outsourcing Spectrum
28
STRATEGIC ALLIANCE Provider and client partner change the business paradigm to create a
mutual and competitive advantage, sharing risks and rewards.
OUTSOURCED PARTNER Provides all services for a specific function to the exclusion of
other providers with shared goals and rewards.
EXCLUSIVE PROVIDER Provides one or more repetitive services based on more favorable
contract terms to the exclusion of other providers.
PREFERRED PROVIDER Provides one or more repetitive services based
on more favorable contract terms. May be
one of multiple providers.
SERVICE PROVIDER Provides discrete contract-based
service when and as needed.
COLLABORATIVE ALLIANCES Multiple providers ensure business continuity and
mitigate risk; all teams use consistent processes, tools,
performance measurement, and technology.
Outsourcing Model
Two Regional Providers
• Goals
– Obtain best practices
– Streamline process
– Enhance control
– Match coverage model to CS and BU structure
• Benefits
– Aligns with organization
– Onsite transaction managers and financial analysts reinforce
information flow
– Shared commission
Finding the Right Fit
Two Regional Providers
Pros Cons
Obtain best practices and perspective
from more than one firm – competition
Standardization and more control over
process and procedures; streamlines
processes
Adaptability to workload peaks and
valleys
Better accountability / tracking / and
governance model (KPI’s /
benchmarking, etc.)
Portfolio strategy services
Shared commission revenues
National coverage and local intelligence
Managing multiple partners
Consistency among partners
(manageable, but needs to be
managed)
Questions and
Answers