SAN DIEGO-A talk-show style general session during CoreNet Global Summit here this week titled “2020 Foresight: Visionaries Foresee the Future of CRE” explored what corporate real estate will look like in 2020. The session’s most memorable takeaway: It’s not just data for data’s sake, but rather insightful data that elevates CRE executives to greater leadership roles in corporations and makes them instrumental in decision-making processes that shape those corporations.
The session, led by Mark Gorman, VP corporate real estate and facilities for Ciena Corp., brought together panelists Sarah Abrams, SVP global real estate for Iron Mountain; Sanjiv Awasthi, VP global real estate and P&D for Cigna; Tony Shou Fat Wong, director of workplace resources and APJ, corporate real estate for Cisco Systems, Inc.; and Pay Wu, strategy & planning leader, real estate services, for Deloitte Services. The end users and the audience discussed the findings of year-long research initiative CRE 2020, on which GlobeSt.com previously reported and which were revealed during the Summit, to explore their validity.
“Service providers and corporate end users can mesh into true partnerships,” said Abrams during the session. “The users can leverage the service providers’ technology, and the service provider has the ability to add insight to the data provided. It’s up to us to make ourselves relevant in leadership roles in the corporation, and there are many opportunities for this. Corporate real estate has driven corporate initiatives [in the past].”
The fact that so much real estate data is available can be read as a positive or a negative, the speakers said. It’s important to weed out what is valuable to the corporation and present it to decision-makers with enough insight for them to make informed decisions about the direction of the company.
“Real estate has to partner with other aspects of the business,” said Awasthi. He added that getting workers involved in site selection is key to finding and keeping talent.
In discussing whether demand forecasting will improve by 2020, Wu said, “The demand side is important—we need to understand what’s coming down the pike demand-wise.” However, most of the panel and attendees agreed that demand forecasting is currently not reliable enough to be the driver of corporate real estate decisions and may not be by 2020.
“Real estate is the tail on the dog—you don’t operate with the real estate first because that will always get you in trouble,” said Abrams.
Wong added that often the market moves too quickly for corporations to react based on demand forecasting.
The panelists and attendees also discussed CREs bringing in their own technology and found that this may not be cost-efficient for some companies dealing with software on a larger scale. “There’s a lot of scripting going on,” said Wu. “IT is struggling to keep pace with what’s current. Software is a challenge for larger companies.”
Also, while independent contractors who bring in their own technology tools can be hired based on this technology, it still needs to fit into the infrastructure of the company, Abrams said.
A final point Abrams made: “Understand the costs of making mistakes because you will make mistakes. Prepare for the downside—no one has perfect portfolio optimization—but they can’t make a smart decision unless they know all the facts.”
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
