Sally Fisher,  Portfolio Strategy Director for Corporate Real Estate at Union Bank in Los Angeles and a headline speaker at the IPD Occupiers Conference in June, speaks to Real Return about the relevance to her of moving “from Cost to Value”, which is the theme of this year’s Conference.

Before joining Union Bank, Fisher worked for Jones Lang LaSalle’s corporate solutions group, and prior to that as an investment portfolio manager in the private wealth sector.  For the previous 12 years she worked as a management consultant advising corporations on strategic planning issues.

Fisher considers that all of these experiences have been valuable in her current corporate real estate position. “My position is at the intersection between real estate and finance.  First of all I am a corporate management professional, and being a real estate decision-maker is subsidiary to that.  The importance of bringing discipline to a corporate real estate group is in enabling decisions to be directed towards the ultimate objectives of the enterprise; if that discipline isn’t there, then decisions are likely to be made in isolation.  So perhaps the most important way of adding value is in understanding the contribution that real estate is making to the profitability of the whole business – and my financial background is key to that.”

She sees the strategic position of real estate within US corporations as having advanced in recent years, not least because of the cost consciousness that has accompanied the economic slowdown. “Focusing on costs has made everyone much more aware of how expensive real estate can be.  So it has to be playing an effective part in the success of the enterprise.  In some ways a harsher financial climate has made it easier to make changes in the way things are organised – such as in data management and analysis - which can help with strategic objectives.  These kinds of changes were starting to happen already, but cost awareness has accelerated the process.”

“This is all part of a movement towards the stronger integration of corporate real estate within the business,” continues Fisher, “and a dramatic increase in the degree of coordination between parts of the estate – with a much greater focus than previously on strategy and planning.  In particular, the financial crisis has given impetus to the integration and alignment of data sources – turning data into information.  The need to make big changes to the structure of the business has meant making much faster decisions; so real estate information has to link efficiently with information elsewhere in the organisation.  We need to be able to produce real estate data at various levels – for example by region or by business groups – on an integrated and consistent basis.  It’s essential to be able to describe what’s going on in different real estate activities, like transactions, facilities or construction, in a way that makes sense to the rest of the business.”

“So creating value has to mean value for the business as a whole and not just from the viewpoint of real estate,” says Fisher.  “We had a recent project for one of the business groups relating to a construction project, where we could have saved US $3million from a pure real estate cost perspective, but branding issues meant that it was seen as in the business’s interests to spend that money.  Of course costs and financials are important, but they are just one element of the equation; speaking in poker terms they are the ante to the game, but they are not the game itself.  We have to be aware of the impact of real estate decisions on the enterprise’s operating efficiency and operating margin.”

“Corporate real estate leaders should be proactive in the enterprise.  Organisations don’t generally have real estate plans in place, so you have to get in and be provocative.  Data management is important for providing a framework within which to make these plans.  Benchmarking needs to be integrated with business objectives, so good data management practices should be established internally before you can think about the possibility of external benchmarking with a peer group. I don’t think most enterprises put as much emphasis on internal data management practices as they should.

“In the future real estate managers need to get closer to the overall business strategy,” Fisher concludes.  “They should spend most of their time in management meetings, not walking around buildings.  They should be corporate managers first and real estate managers second.”

Sally Fisher is very much looking forward to participating in the IPD Occupiers Conference:  “I’m looking forward to getting new ideas through interacting with the other delegates, making new acquaintances and expanding my knowledge of what’s going on in Europe.”

For more information please contact Glenn Corney.