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Jeff Elie: 'Corporate real estate is transforming'StaffMarch 1, 2006Building Design and Construction
Jeffrey L. Elie is VP of Global Real Estate and Facilities for Kaplan Inc., an education division of the Washington Post Co. Previously, he was real estate director for the McGraw-Hill Companies and assistant vice president for Citibank, N.A. Next month, he will complete his term as chair of CoreNet Global, whose 7,500 members manage $1.2 trillion in worldwide corporate assets totaling 700 billion sf of office, industrial, and other space. BD&C: What makes CoreNet Global different from other real estate membership groups like the Urban Land Institute or the National Association of Realtors? Jeffrey Elie: CoreNet Global's mission is corporate real estate and the surrounding services that make up a whole project. We have members from financial services firms, telecommunications companies, insurance firms, the electronics industry, brokerage houses, the major automotive companies—General Motors, Ford Land, Toyota, and so on—plus architects, engineers, landlords, developers, lawyers, and construction people. Nearly half (49%) of the Fortune 500 companies belong to CoreNet. Our mission is education, networking, best-practice sharing, and research. BD&C: CoreNet recently issued its "Synthesis Report: A Framework for Thriving in the Networked Enterprise," which describes how "networked virtual organizations" will deal with globalization, technology advances, changing workforce demographics, and new business risks. How did this come about? JE: In 2004, we started Corporate Real Estate 2010 to describe how the workplace would be transformed by the year 2010. Now, there are 11 reports that make up "2010," and they show that a lot of the things that were discussed back in 2004 are already being adopted by many organizations—for instance, Bank of America and the Royal Bank of Scotland. BD&C: What are you seeing in terms of the quality of the physical workplace? JE: There's really nothing new. We've gone through different evolutions—ergonomics, open work space, perimeter offices, internal offices. You're always going to have firms that are either heavily officed or heavily cubicled. But that's totally different from how much office space you need. The big trend is common technology. We had cubicles even before we had computers, so now the cubicles have changed—we've had hardwire, then electrified panels, then wireless—but the concept of the cubicle hasn't changed. BD&C: How are corporate space needs changing? JE: Well, there's no doubt that there is a sharp increase in the mobile and remote work force, which leads to initiatives that decrease corporate real estate requirements. Cisco Systems has experienced a 37% decrease in real estate requirements in recent years. Years ago, a company might have had a certain product line that required 10,000 sf of space. Today, that space need might go down, but then you see companies offering more products, diversifying their product lines. So you're not necessarily seeing a net drop in space needs. The other reason is that not every company is changing space needs as dramatically as Cisco has. BD&C: The 2010 initiative implies that corporations will adopt the "triple bottom line"—focusing not just on economic return, but also social responsibility and environmental stewardship. Do you see this happening among CoreNet Global members? JE: I believe it is happening, at companies like BP, Herman Miller, Johnson Controls, and Toyota. That is going to be the rule of thumb for sustainability. It may come on at different times for different corporations, but it's going to happen. BD&C: From your experience, where could the AEC industry do a better job working with corporate clients? JE: They could do a better job in understanding corporate culture. Then, within that corporate culture, making recommendations on how to enhance work productivity through design: lighting, natural lighting, aesthetics, all from understanding the client's culture. There are times when the architects or engineers come in, and they show examples of what they've done before for some company, but it doesn't always work for another company. At Kaplan, with 600 locations, I can't tell you the number of times we get them trying to push us into something that doesn't work for us. Kaplan's needs are different from the typical corporate office needs. We have office needs, classroom needs, and call center needs. Our client is the student, and our job is to understand them—their classroom time, their break time, making that experience from the time they walk in to the time they leave at night, everything they touch and feel and smell, everything has to be just right, or the students won't come back. BD&C: So what's your biggest worry at Kaplan? JE: Keeping the growing portfolio running. Making sure that we are open for business, environmentally safe and friendly for our clients and staff on a daily basis. And making sure, even with the constant change that we have here at Kaplan—new courses, growing by acquisition—that our overall asset is protected. © 2008, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.
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