Talk about the strategic positioning of real estate as a partner at the senior management roundtable and with the CFO, and you're talking about realizing the key vision of CoreNet Global.

In presenting its case for the Global Innovators Award, the Whirlpool corporate real estate (CRE) team showed it is doing just that - working in close partnership with the corporation's top financial executive.

Corporate treasurer Blair Clark has outlined two key transformations within Whirlpool, a shift from manufacturing to consumer focus and the development of a global manufacturing platform, and he has endorsed CRE's pivotal role in those shifts by noting in top-down fashion that "real estate is connected to these transformations."

While real estate also reports into the financial group, the key innovation to retaining a seat at the company strategy table has become the Whirlpool CRE team's Global Asset Positioning Tool, or GAPT. The tool enabled the CRE team to generate substantial contributions to Whirlpool's corporate bottom line in 2003:

As a new management tool, GAPT continues to enable strategies such as relocation, reinvestment, status quo and disposition. It is becoming a resource to help the company navigate an important transformation away from locating manufacturing centers in proximity to where Whirlpool sells its home appliance lines and other products in favor of cost-driven locations.

"The churn creates significant complexity in the real estate portfolio," said Carl Nedderman, head of Whirlpool CRE. It's a sizeable portfolio of 425 owned and leased properties that total 51-million square feet with a value in the multi-billion-dollar range. Through GAPT, the company gains "access to local market conditions and other data leveraging the portfolio for maximum efficiency," Nedderman added.

Another noteworthy element of the management model is the highly outsourced nature of real estate operations at Whirlpool, which employs only seven staff in CRE despite its size as a global enterprise.

According to Lee Utke, MCR, of the Whirlpool CRE team, the value proposition surrounding GAPT and the CRE function is multi-dimensional:

The CRE group partners with Finance, Legal Counsel and Risk Management, which Utke described as "an organized function within the company." It's becoming an integrated management team. "Real estate does lead the process but it starts at the top," Utke explained. "We have integrated finance with the company's business requirements and with the strategic direction of the company" based on the continuous input from the key stakeholders assembled by CRE.

"We rely on the team's intellectual capital to understand problems and solutions," observed Debra Moritz of Jones Lang LaSalle, a Whirlpool global service provider. "It's a strong stakeholder management model, and all the players have taken an active role in driving results. It's applicable to any organization."

GAPT works as an automated financial modeling tool that offers a single standard reporting template for every property as well as SWOT analyses and financial data integrated with occupancy data. Benefits include:

For example, GAPT prioritizes properties by the level of opportunity each holds by using color-coded opportunity requirements and restrictions that help assess the financial impact back to the company as well as the EPS impact of the decision. "It's a visual look at the opportunities that exist," Moritz said. "The more senior management can use it and see it, the more it will grow in the future."

"GAPT addresses the forces affecting the industry," Moritz pointed out. "They are globalization, expanding and shrinking markets, supply chain efficiency, labor dynamics and technological advances."

"We have to live with this on a day-to-day basis," Utke added.

GAPT is now regarded as a strong analytical tool enabling innovation and bottom-line contributions, and has provided a seat for CRE at the management table, along with integration with the company's business units. "We don't have trouble getting an audience (with the treasurer) because we have delivered on these results," Nedderman concluded.

– Richard Kadzis, CoreNet Global