Event photography by Amanda Brooks

Dr. Ted Sargent of MIT and Universityof Toronto applied the arcane but fanscinating world of nanotechnology to everything ranging from real estate and medicine to the military and DNA engineering. Challenge all assumptions about technology and the future, he urged.

A  real estate executive in the energy business?

The concept sounds unlikely, but to Dr. Ted Sargent, anything's possible.

The MIT and University of Toronto professor and leading-edge researcher of nanotechnology tied together both worlds - real estate and quantum physics - during the closing General Session of the CoreNet Global Summit in Madrid.

Speaking to an overflow audience of more than 300 corporate real estate (CRE), workplace and related executives, Sargent - chosen as one of the world's top young innovators in 2003 - used United Technology Real Estate as an analogy for the application of nanotechnology to CRE.

With UT President Ron Zappile sitting in the audience, Sargent calculated on stage that the corporation could draw up to $100,000 an hour by deploying blankets of nano-driven photo-voltaic cells on the rooftops of its 4,600 properties worldwide.

"Taking United Technology's 100-million-square-foot portfolio," Sargent estimated, "UT could use all its rooftops to capture the sun's power."

Converting the square footage to 10-million square meters, and multiplying it by the benchmark of one kilowatt per square meter of energy, Sargent's calculation totaled 10 gigawatts of power per hours - the equivalent output of 10 nuclear power reactors combined. "Convert to power at .10 per kilowatt hours, and UT could generate up to $100,000 per hour to sell to the market."

Of course, such an approach would revolutionize not only the powering of the workplace, it would cause a sea change in the centralized utility industry. "It would change the economics of ownership (of properties). Power is de-localized but this would challenge the current paradigm, bringing about peer-to-peer distribution of power versus downstream delivery."

Not only that, but the space currently taken up by power-related equipment would be freed up, in turn creating more space in existing facilities, Sargent continued.

Sargent, who wowed audiences at the recent CoreNet Global Summit in Toronto, also captivated the imagination of the Madrid attendees. He defined the crux of nanotechnology as the design of molecular matter toward specific functions. "Underlying atomic molecular structures give rise to functions (and) the nano-scopic becomes the macro-scopic."

Sargent's passion for sharing scientific views and innovation so that everyone can understand them showed through, as well. He expanded his lecture to the field of medicine, demonstrating how current research at Atlanta's Emory Hospital and nearby Georgia Tech is already showing doctors how nanotechnology can be used to diagnose specific forms of cancer and how the use of infrared dyes and laser technology can find even the smallest traces of tumors often missed by MRI's and Cat Scans today.

He predicted that nano-diagnosis will lead to nano-therapy using cancer drugs.

Sargent's view of the future is based on his key question to the audience: "What are the assumptions that could change through technology and how will they help us in the future?" He referred to "informative tranquiliscism," the transliteration of far-reaching ideas and concepts into realistic applications. "Must cancer kill, must energy pollute, must the night obscure?" he asked.

Expanding his projections to the development of advanced polymers that can be combined with nano-sized energy cells, Sargent implied that a whole new world can open up for the corporate real estate and property management industries - largely through the introduction of affordable, innovative, flexible, efficient and high-tech materials that could redefine the way buildings are designed, constructed, operated and disposed of.

The author of "Dance of the Molecules" even theorized that buildings can be used as sensors.

He also shared a vision of how the military, DNA, batteries and even apparel will someday incorporate these emerging micro-technologies. "Quantum physics can be totally explainable, and can be all this," he concluded. And then some!

Being in Europe at the cradle of sustainability, you would expect a compelling presentation on the topic as offered here in Programme VII, and the expectations were met.

Moderator Nick Axford, PhD, of CB Richard Ellis, kicked off the discussion by pointing to the CoRE 2010 research report on Sustainability. As the report co-author, he framed the discussion around the basic rule of thumb of sustainability: people, profits and planet. "The drivers are globalization, consumerism, legislation and investors," he told the audience of corporate real estate and workplace professionals, many of whom play active sustainability-based roles within their companies.

Sustainability can be viewed as 'altruistic self-interest,' according to panelist John Duggan of Gazeley (left) who was joined in the Madrid education program by Mike Breen of The Breen Consortium International (center) and moderator Dr. Nick Axford of CBRE.

The three-member panel examined sustainability and corporate social responsibility from two fresh perspectives: green warehousing and the strategic location decisions. In fact, not only did the panel effectively tie-in the CoRE 2010 sustainability research, its members also related it to the CoRe 2010 report on The Strategic Role of Place.

Regardless of the context, corporations must balance their shareholder interests with social and environmental responsibilities through what panelist John Duggan, CEO of Gazeley LTD - a Europe-based division of Wal-Mart specializing in warehouse development and operations - described as "altruistic self-interest."

Axford recounted how Dow Jones rates sustainability as "an attractive business approach to create long-term shareholder value."

He also urged the industry to accept more accountability for placing sustainable components into building designs, a factor that is slowing the adoption rate of green development in the U.S. and internationally. In his view, occupiers are best positioned to step up and insist that their counterparts in development, construction and investment build in more LEED and other sustainable pieces in future projects. The CoRE 2010 sustainability study shows some encouraging signs through an increase in the number of corporate end users expressing willingness to pay higher premiums for green development.

"It's the vicious circle of blame," as Axford decried. "It can be the virtuous circle of sustainability, and it starts with occupiers who can best influence the investors, developers and builders."

The program then turned to two case studies by panel members Duggan and by Mike Breen, president of The Breen Consortium International.

Duggan's focus on warehouse green development and operation opened a new vista into the sustainability spectrum. Citing guru Bill McDonough's call to "remaking the way we make things," Duggan outlined a case about Gazeley's 8-million-square-foot distribution hub employing 5,000 people in Magna Park, UK, describing it as a "best practice distribution model (incorporating) landscaping, waste and water."

He also shared the company's so-called "eco-template" for its Bedford, UK, operations where an added investment of US$50 per square foot for green development is yielding a six percent reduction in energy emissions and a 45 percent decrease in water usage, the latter at no cost.

"Companies need a cultural transformation process," to effectively engage in sustainable practices, he explained. "It's about thinking differently."

Pointing out that sustainability can favorably impact corporate price-to-earnings ratios and profit as the two key pieces of realizing both shareholder and corporate social responsibility aims, Duggan emphasized that sustainable practices "are no longer marginal, no longer simply 'nice to have' because it can determine significant value and makes for a legitimate franchise to operate." It also becomes a meaningful employee recruitment and retention vehicle.

"Gazeley started to treat the world as if we wanted to stay," he concluded, referring to the finite natural resources of the plant versus trends like population growth and the emergence of developing economies.

Mike Breen then tied the concept of sustainability to the strategic role of place. His case study of client Oracle proved the point that companies can balance their financial and social responsibilities, and do so effectively on behalf of shareholders, employees, suppliers and the community at large.

The goal of the case was for Oracle to move 500 jobs to its Reading, UK, headquarters despite the fact that the campus has little excess capacity for parking. The objective then became the reduction of the number of employees who drive to work. The solution lay in large part through the eventual outsourcing of services and incentives surrounding:

A chief innovation was Oracle's substitution of 14001-ISO transport credits in place of emission credits.

The promotion to reduce employee driving volume succeeded. The metrics show a 19.4 percent increase in car-sharing as well as a 3.3 percent rise in cycling, due mainly to the company's efforts to expand and improve the bicycle paths leading to the campus from Reading.

"We realized the need for changing behavior, changing what people do," to get to work, he recounted. "It is the marrying of sustainability with good business practices, and it's a win-win for companies, employees and the environment."

Front row left to right: Peter Hogg, Andrew Burt, Ted Pearce. Back row left to right: Jeff Wilson, Carl Longworth, Jonathan Berney

Jonathan Berney, Partner, and Peter Hogg, Head of Asset and Facility Strategy, both of EC Harris, co-moderated this session that looked at what they and the panelists consider to be the four essential elements CRE needs to impact the overall business enterprise at a strategic level. Each of the panelists brought their perspective on this topic based on their own organizations' current level of interaction with third-party service providers. These interactions ranged from the level of "out tasking" very specific items to partnerships that are truly integrated into the company's organization.

Peter Hogg illustrates the three levels of partnering

The four essential elements are:
• Operational Efficiency
• Technology expertise or infrastructure
• Commercial leverage
• Organizational and behavioral change skills

Peter Hogg raised the question of how CRE becomes flexible enough to adapt quickly to business needs. He presented a range of models that show CRE in various functional capacities within the overall business organization. These models were then illustrated by the members of the panel.

Andrew Burt, the Director of International Corporate Real Estate for the Walt Disney Company, was the first to share his approach with the delegates. He described his relationship with his service providers as one of "out tasking", meaning that he works with local providers who have a very focused scope of responsibility. This allows him to exercise the greatest amount of control over the process.

Ted Pearce, Head of Property for the Bank of Ireland, uses a more integrated approach. He looks for "supply chain partners" who share the same goals as CRE, which in his organization are aligned with the goals of the company's board of directors. He brought up the important point that obtaining objective data that proves the efficacy of these supply chain partners is difficult.

Jeff Wilson, Regional Operations Manager, UKISA & Nordics, for IBM, uses the highest level of integration of all the panelists. IBM has outsourced almost all of its CRE function in an attempt to move CRE into the arena of IBM's overall business model of "On Demand". He has utilized data warehousing and consistent application of technologies to improve the flexibility and speed of CRE. He believes that today, instead of the struggle between the big fish and the little fish, "The fast fish are eating the slow fish."

Carl Longworth, Head of Workplace Services for BBC Property, gave the delegates a word of caution. He urged CRE professionals to be careful when entering into a relationship with a service provider. He suggested that all these relationships should be governed by a "solid, fair contractual arrangement supported by mutual respect and collaboration." He also suggested that there is truly no such thing as "cultural fit"; he suggested that "cultural empathy" should be the goal.

The panelists' presentations were followed by a lively discussion with the delegates present. Among the questions raised was whether there is any one service provider that is capable of handling all of a corporation's real estate and related needs. The overwhelming answer to this question was "No"; there are still substantial shortcomings in the level of expertise of some service providers, and most service provider companies are too small at this time to offer the largest organizations the full range of services that would allow them to outsource their CRE function one hundred percent. This idea led to some speculation of how service providers could address these issues, but all agreed that time will tell whether such a high level of service is truly needed or wanted.

Tim Asson (left) and Peter Copley

In this compact 30-minute session moderated by Tim Asson, Director Corporate Real Estate for Nelson Bakewell, delegates heard the story of how Reuters, the venerable news and financial services organization, re-invented itself in a time of real crisis for the company.

Peter Copley, Group Property Director for Reuters, told delegates how his organization was in desperate need of a turn around. The company's stock price had plummeted, and Reuters was losing ground to younger, more innovative companies. A new chief executive launched a groundbreaking three-year program called FAST in an attempt to not only save the company money, but to bring about the sweeping cultural changes he felt were needed to compete in the 21st century.

FAST stands for Fast, Accountable, Service and Team. The program proscribed changes in all facets of working life at Reuters: HR, IT, marketing and PR, as well as real estate. The program mandated the consolidation its workforce into one location, where previously workers were spread out over many different locations around London. The financial reasons for the move were obvious, but Reuters took advantage of the opportunity to infuse the design of its new headquarters with an expression of its culture and brand. The design uses totally open workspace plans, and through the use of technology, enforces to staff and visitors alike the company's purpose and culture of "freedom from bias."

The FAST program will conclude at the end of December 2005, but it is already being hailed as a success. Reuter's stock price is up, and the consolidation has resulted in a savings to the company of approximately 4 million.

Deutsche Bank's VP of Corporate Real Estate and Services Johannes Ketel with BRICSNet CEO Farid Jinian, who emphasized the bank's global infrastructure solution as "web-based and fully integrated to address immediate needs and the future, or the full life cycle of a building or facility."

Even the naysayers of the Monday panel debating the strategic value of corporate real estate (CRE) might have been favorably impressed with the globally integrated workplace and technology platforms presented in the Tuesday Education Session featuring Deutsche Bank and Telefonica. Moderator Barry Varcoe, head of Group Workplace Operations for Royal Bank of Scotland (RBS), set the tone for the key message that CRE is indeed playing a strategic role and adding shareholder value.

“Real estate changed in the mid-1990's,” recounted Varcoe, a finalist for the 2005 CoreNet Global Innovators Award for the RBS “Embedded Culture of Innovation” model. “It became more complex between 1997 2002,” he said while citing benchmarking that shows the industry's migration away from transactions and toward strategies starting about a decade ago, also contradicting the views expressed against strategic value in the Monday luncheon debate.

Telefonica's real estate executive profiled the company's new GAINS system with technology partner AOS Iberia while moderator Barry Varcoe (right) of the Royal Bank of Scotland shared research showing a trend toward the increasingly strategic role played by real estate.

Varcoe added that for today's CRE, it's all about information. “Do you have the information you need?” he asked, evoking the idea that CRE is elevating its role in an increasing number of corporate enterprises such as RBS by becoming adept at gathering and sharing important data, information and knowledge. Not only did he affirm the growing predominance of decision support by CRE, he validated the concept of Integrated Resource Infrastructure Solutions, a CoRE 2010 focus as authored by CoreNet Global.

“For CRE, the better the information we have to share, the better the decisions that are subsequently made,” he stressed.

The Deutsche Bank team supported the key point in its case presentation of the global bank's proprietary BRICSNet system. VP of Corporate Real Estate and Services Johannes Ketel explained how the bank's operations in 37 countries across multiple legacy systems created a profound multiplicity that challenged the smooth integration of operations with metrics and IT platforms in support of key location and other business decisions.

1. Gain control of the portfolio
2. Create opportunities for efficiency
3. Move to higher strategic ground
1. Lease administration in the U.S. by 2004
2. Help desk in Germany by 2005
3. Space management in the U.S. and Germany by 2005, by 2006 for the U.K.
4. Smart dashboard metrics for the future

Ketel's IT colleague, BRICSNet CEO Farid Jinian, emphasized the solution as “web-based and fully integrated to address immediate needs and the future, or the full life cycle of a building or facility.” The BRICS system is thus able to support portfolio management, lease administration, maintenance and project management while also delivering on transaction management, asset management and space management. “A large degree of flexibility is needed,” Jinian observed.

• Square Meters/FTE
• Cost/FTE
• Cost/Square Meter
• Vacancy
• Trend Lines

By 2007, the panelists said they hope to have expanded the integration efforts with external data marts and with “Smart Alerts” tied to best practices.

The Telefonica side of the story also proved the point that CRE is becoming more strategic as an enabler of innovative solutions and support models. As the number one telecommunications company in Spain and Portugal, the privately-owned carrier is also ranked fifth worldwide and has nearly 150,000 employees in 40 countries occupying nearly 8-million-square meters of space.

Following the centralization of CRE services in 1998, the key solution for Telefonica's need to integrate became its GAIN system, a common platform for real estate information, according to Roberto Rojas, general manager, AOS Iberia. “GAINS is a single globally scaleable solution,” he said. “We re-evaluated all IT systems we had outside and included real estate. We need a common tool to manage it all . . . occupants, providers, management, and corporate real estate.”

One important improvement was the recent loading of 45,000 architectural and facility drawings into the GAIN globally-accessible database. Other new features include business life cycle support, sales support, document management integration, employee and provider portals (intranet support sites) and financial integration via SAP and ERP interfaces.

It's all leading to positive results. The integration through GAIN has already resulted in an accurate real estate inventory, space optimization, improved building operating efficiencies and the consolidation of projects and design management. Of course, it's led to another critical development: CRE is now supporting key decisions by top management.

Benelux Chapter Awards Student Scholarships to Madrid Summit Robert J. Kuiper (center), an executive in the Shell Real Estate Services unit of Shell International BV and a leader of the Benelux Chapter of CoreNet Global, introduced two student scholarship winners at the recent Madrid Global Summit. Remko D. Jaspars (left) and N.M.J. Janssen (right) won scholarships covering travel and registration for the Summit as a result of submitting a winning case study to the Benelux Chapter. The winners are students at DF Delft University. "This prize was awarded for a graduate project that has made a special and innovative contribution to the development of Corporate Real Estate Management," said Kuiper.