Summer 2010 by Colliers

Knowledge Leader

co ll iers i n ternational propert y mag azine

the clock is ticking Global investor sentiment survey

building Value

Strong Brands are big assets

service icons

legendary Customer Service

summer 2010

Enterprising: How Mats Johansson is changing the game at Skanska Commercial Development

Contents 4 Outlook 20/20

21 First Impressions Count

By cultivating strong brands, companies and landlords can prosper through any economic climate. BY HEIDI STOUT TRETHEWAY

6 Spotlight

Lipsey Sur vey ranks industr y brands/ The costs of going global/How health reform legislation will affect real estate/Q&A with Mark Jaccom, CEO of the New York tri-state region for Colliers International.

10 B2B

For these companies, customer ser vice is legendar y.

BY TERESA KENNEY

C lockw i se f r om to p left : C ou r tesy of L i qu i d A g e n cy ; M H P M P r oject L eade r s ; C h r i s B a r r ett ; J ay B lack

By KERRY ALEXANDER

14 Personal Biz

31 Behind the Scenes

U.S. and Canadian business profiles featuring Whiterock REIT and Sutter Health.

36 Bank Notes

With capital providers back in the game, what can you expect to see in the near future? by JACK M. COHEN

37 Follow the Leader Presentations sounding a little dull? Follow these simple keys to inspire and engage your audience. by GERALD CLERX

Fitness tips to keep you active when you’re on the road.

38 CSR

BY SALLY KASSAB

16 Business Smarts

Experts across the globe weigh in on where the commercial real estate market is today and where it’s headed tomorrow. By BRIAN K. MILLER

12 Working Space The Richmond Olympic Oval takes the proverbial gold in sustainability and urban renewal.

Under the leadership of Mats Johansson, Skanska USA Commercial Development’s successful business model is based on “Scandinavian intelligence.” By HEIDI STOUT TRETHEWAY

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26 The Clock Is Ticking

BY HEIDI STOUT TRETHEWAY

When recruiting top talent, make sure your office space sends the right message.

The importance of giving back to the communities you work in. by CHERYL REID-SIMONS

40 In Focus

Colliers International launches a new look and a fresh perspective. by dOUG FRYE

Cover Photo by Jason Grow

38 Colliers international Spring 2009

Volume 4 u Number 2

From the Editors’ Desk

Knowledge Leader

co ll i ers i n t er n at i o n a l propert y m ag a z i n e

David Bowden

Dylan Taylor

IN BETWEEN THE LINES

Executive Managing Editors

Dylan Taylor and David Bowden Editor

Teresa Kenney b Associate Editors Kerry Alexander, Kristen Okerman

Most of us play dual roles in our lives. For many companies, we’re the provider of a product or service and they choose to do business with us. For others, we are the client and they compete for our attention. Either way, as supplier or customer, we know the value of making an impression and carving out a niche for ourselves in the market. And we know the importance of creating, delivering, preserving and, in some cases, evolving, our position so that we continue to stand out from the crowd and stay current in the minds of our clients. We like to think of this as an enterprising approach to business. And we found that this philosophy—a core component of the Colliers International business—resonates with many of the pioneers and leaders in today’s business world. To capitalize on that, our summer 2010 issue of Knowledge Leader features some of the most enterprising people, companies and ideas out there today: • Brand strategist Marty Neumeier walks us through the equity power behind a brand and how to create competitive advantage in the minds of the consumer. • In Working Space, we look at a project team that struck gold with their creative and inspiring design for a now-iconic community landmark. • Skanska’s Mats Johansson shares his firm’s philosophy for success and how “Scandinavian intelligence” plays a key role in their business strategy. • In the Clock is Ticking, we look at how being ahead of the curve—or in this case, the clock—in investment cycles can be a business advantage. • Community leader, John McLernon, shares his passion for giving back and explains why social responsibility is everyone’s business.

In our Enterprising issue, all of these thought leaders, and others, provide valuable insight into just how important it is to remain on top of your game and continually find new and better ways to be the best at what you do. For us, that’s to provide a memorable experience for our clients and to accelerate the success of everyone we come in contact with. We hope that you find this issue of Knowledge Leader to be a memorable read and that you take away something that will help you to accelerate your success—or someone else’s—in your business or community.

David Bowden Chief Executive Officer | Canada Colliers International

Dylan Taylor Chief Executive Officer | USA Colliers International

Art Director

Amy Wallace Project Manager

Heidi Page Contributing writers

Kerry Alexander, Gerald Clerx, Jack Cohen, Sarah Eadie, Doug Frye, Sally Kassab, Teresa Kenney, Brian K. Miller, Cheryl Reid-Simons, Heidi Stout Tretheway Proofreaders

Kerry Alexander, Jennifer Garton, Lilium Pierson, Heidi Stout Tretheway This magazine is published by Colliers International

To order more copies, learn about advertising options or subscribe to Knowledge Leader, visit Knowledge-leader.com.

Tiger Oak Publications 1518 First Avenue, Suite 500 Seattle, WA 98134 Knowledge Leader is published three times annually by Tiger Oak Publications, Inc., with offices at 1518 First Ave. S., Suite 500, Seattle, WA 98134; 206.284.1750. © Tiger Oak Publications, Inc. All rights reserved. POSTMASTER: Send address changes to: Knowledge Leader, Colliers International, 601 Union Street, Suite 5300, Seattle, WA 98101. Publications Mail Agreement No. 40064408. Return Undeliverable Canadian Addresses to: Express Messenger international, P.O. Box 25058, London, ON N6C 6A8. Printed in USA.

knowledge leader summer 2010

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Outlook 20/20

h ot to pi c s m a k i n g h e a d l i n e s to day

What’s in a Name? by cultivating strong brands, companies and landlords can prosper through any economic climate. By Heidi Stout Tretheway

knowledge leader summer 2010

What is a product worth? Even without a price tag, consumers are remarkably good at guessing correctly. There’s the product itself: a shirt, a car, a computer. And then there’s the customer’s mental math—the result of his or her experience with that brand. The shirt? Very stylish. The car? High safety standards. The computer? Easy to use. Peel off the labels. Replace with new ones. Now what are they worth? When the value of a product or service changes with its label, brand value is at work. The brand consultancy firm Interbrand calculates that the values of top-tier brands are in the billions of dollars. In fact, Interbrand reports that household names such as Coca-Cola, Ford, BMW, Nike and Kodak have brand value worth more than half of their respective market capitalization. Marty Neumeier, an international speaker on branding and the author www.knowledge- leader.com

M a r ty Neume i e r : C ou r tesy of L i qu i d A g e n cy

Branding guru and author Marty Neumeier assists companies with building successful brands.

of multiple books including The Brand Gap and Zag, describes the process of brand building as a combination of logic and magic. It can transform a product or service trapped by commoditization and price wars into a product for which there is no substitute. “A brand is not a logo. A brand is not a corporate identity system. It’s a person’s gut feeling about a product, service or company,” Neumeier explains. He notes that brands require nurturing from the company and consistent interaction with customers to build a guarantee of trustworthy behavior. The billions of dollars that companies spend each year on carefully controlled visual identity systems, including brochures and signage, are wasted if the customer experience falls short. A great logo won’t make up for a rude salesperson or an inferior product because, ultimately, these too are part of a brand. “The foundation of a brand is trust,” Neumeier says. “Customers trust your brand when their experiences consistently meet or beat their expectations.” This extends to all aspects of a company, including its employees, products, services, stores and customer experiences. Take a quick surf across websites dedicated to customer experiences and you’ll see how expectations for a brand amplify or diminish the perceived significance of issues. Customers who don’t expect a lot of sales support from, say, a discount chain or warehouse, typically don’t complain when they can’t locate a salesperson immediately. But when this same issue came up at a highend department store, a customer

Estimated Value of Top 10 Global Brands 1. C oca - C ola $ 6 8.7 Billion 2. IBM $ 6 0. 2 Billion 3. Microsoft $ 56.6 Billion 4. GE $ 47.8 Billion 5. N ok ia $ 34.9 Billion 6. McDonal d’s $ 32. 3 Billion 7. Google $ 32.0 Billion 8. T oyota $ 31. 3 Billion 9. Intel $ 30.6 Billion 10. Disne y $ 28.4 Billion (source: Interbrand, 2009)

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Landlords who base their income on percentage rent are likely to see net income rise or fall based on the power of the brand’s ability to drive consumers to the store.

blogged a 500 word rant about spotty service for all to see. When customers come to expect—and trust they will receive—a product or service, the weight of just one poor experience usually doesn’t shake that trust. Strong brand value can give your company a second chance to restore a customer’s faith in your product or service. As people gravitate toward a kind of tribalism in their purchasing patterns, Neumeier sees a significant shift in the marketing landscape. Brands can capitalize on the power of indentifying with these tribes—groups of people who bond over a common interest. Harley Davidson and Apple are two examples of companies that have capitalized on the tribes that formed around their products. “Differentiation has evolved from a focus on ‘what it is’ to ‘what it does’ to ‘how you’ll feel’ to ‘who you are,’” Neumeier explains in The Brand Gap. “While features, benefits and price are still important to people, experiences and personal identity are even more important. Brand names are tribal gods, each ruling a different space within the tribe.” Grouping brands to take advantage of tribes is evident in power centers—openair retail centers where typically one retailer per category leases space. It’s also found in shopping centers, where stores cluster to capitalize on specific demographics. At one end of a local mall, baby clothes, kids’ shoes, a toy store and a portrait studio are clustered

together, while at the other end you may find music stores, teen clothing and accessories, and a movie theater. In commercial real estate, branding holds value for more than just the retailer and consumer. Landlords who base their income on percentage rent are likely to see net income rise or fall based on the power of the brand’s ability to drive consumers to the store—in good economies and bad. “The power of branding should make landlords choose tenants carefully, based on who has the brand equity to ride out a downturn,” Neumeier explains. He chuckles, recalling a family member who takes the scientific approach to investing while Neumeier goes by feel, based on brands people love and talk about. “When brands develop strong loyalty, it shows up in love for the brand long before it shows up in the stock price,” Neumeier observes. “Investors tend to wait to see the earnings go up, but before that happens, we might see a year of really good brand loyalty built.” Neumeier witnessed this love effect after Apple launched the iPod, when Target made design affordable, and while NetFlix built a following. “Landlords should look beyond tenants’ balance sheets and use their intuition, if they’ll let themselves,” Neumeier advises. “If you can see where the momentum and excitement is, bring these brands to your building and let them help your business.” K L Colliers international summer 2010

spot lig h t the people, places

and events shaping the industry

» accol ades

Climbing to the Top Colliers International is ranked one of the industry’s most powerful brands Colliers International has climbed to the No. 2 spot in the annual Lipsey Survey of the top 25 brands in the commercial real estate industry. The firm rose from sixth place in 2002 to fourth in 2003 and has had a lock on third place since 2004. “We have risen in the rankings largely due to our bestin-class service and the high quality service offerings that we provide around the world,” affirms Doug Frye, global president and CEO of Colliers International. “Although we are pleased to have moved up to second place, we will continue to pursue our strategy of ensuring our clients receive the 6

knowledge leader summer 2010

highest levels of service and consistent delivery over the long-term.” The survey results are culled from ballots, informal focus groups and opinions of more than 50,000 commercial real estate leaders and practitioners, including mortgage bankers, commercial brokers, asset managers, property managers and related professionals. The survey is conducted by The Lipsey Company, a training and consulting firm specializing in the commercial real estate industry. To learn more about the survey, visit www.lipseyco.com. www.knowledge- leader.com

» current

events

Health Care and Real Estate

U.S. legislation and aging demographics will change how—and where—health care is delivered One of the few sectors showing steady growth and higher margins in the U.S. economy during the recession has been businesses related to health care service. As life expectancies increase and baby boomers age, more health care services are going to be required over a longer period of time. And now, with the passage of the federal health reform legislation into law, all health care-related real estate owners and operators must focus on the optimal use of two critical resources: real estate and cash. So what are the real estate opportunities flowing from demographic pressure and health care reform? As always, the answer to the question is not to simply build more. Investors and operators must look at their existing real estate and answer the question, “Are the properties welllocated for the new and enhanced services required by the customers?” From data centers for new records to long-term care facilities for baby boomers and community wellness centers to reach the newly insured, health care real estate is going to be incredibly active. The dynamics are changing, and the rewards for investors and operators who bring quality, cost-effective services to the United States will be dramatic. — Jeremy Tasker, Colliers Healthcare Services Group

» insider

tips

Cost Comparison Competitive Alternatives compares the business costs of global markets Knowing the cost of doing business in various markets can be a real advantage when it comes to making key operational decisions. Colliers International has again partnered with KPMG—a global network of professional firms providing audit, tax and advisory services—to produce the 2010 Competitive Alternatives report. Published every two years, Competitive Alternatives is an extensive guide for comparing business costs in the world’s major economies. The study contains vital information for any business seeking location advantages for its international business operations. The 2009–2010 study examined 122 cities in North America, Asia Pacific, Europe and Latin America. Specifically, it compared 60 cities in all 50 states in the United States, 38 cities in 11 provinces in Canada, 12 cities in Europe, 2 cities in Japan, 4 cities in Australia and 6 cities in Mexico. www.knowledge- leader.com

Competitive Alternatives compares the costs of doing business in a variety of categories in these urban centers and includes a multiyear trend horizon across a variety of cost components and industries. Key cost categories include labor, income tax, utilities, energy, real estate and transportation. The report also compares a variety of non-cost factors that can influence the business appeal of particular locations, including economic conditions, innovation, labor availability and skills, regulatory environment, cost of living and quality of life. Within the real estate component, the report compares light industrial land prices, industrial building costs, and downtown and suburban office costs. Colliers International has been the exclusive provider of the real estate knowledge for the report since 2002. Download the full report at: www.competitivealternatives.com. Colliers international summer 2010

spot lig h t » Q& A

executive insight with:

Mark Jaccom

Colliers International, CEO — New York Tri-State Region

projects in the Bronx. Although I have fond memories of my childhood, I am reminded of the tough times we went through, so this quote means a lot to me personally. Who are your heroes?

A respected leader in the New York real estate industry, Mark Jaccom has led his firm through a series of landmark changes over the past two years, transitioning from Williams Real Estate to FirstService Williams, and now to Colliers International, all the while maintaining a commitment to exceptional service to his clients in one of the leading global real estate markets. If you could have dinner with any business leader, who would it be and why?

Investor and philanthropist Warren Buffet. In addition to his enormous success as a businessman, his prescience as an investor—he always looks for strong management in a company—and his philanthropic efforts are inspiring. Do you have any favorite words to live by?

“Don’t forget where you come from.” It keeps you humble. It encourages responsibility for what you create, and it keeps you true to yourself. I find this statement to be a strong influence when I am trying to put things in perspective. It brings me back to when I was growing up in my old neighborhood in the 8

knowledge leader summer 2010

I have several who have influenced me with their actions and words: World War II General George S. Patton, Jr., “We herd sheep, we drive cattle, we lead people. Lead me, follow me or get out of my way.” General H. Norman Schwarzkopf, commander of the coalition forces in the Gulf War, “True courage is being afraid and going ahead and doing your job.” My father, Sergeant Ralph Jaccom, who had a 25-year career in the Marines,“Be honest. Be tough. Always put yourself in the other person’s shoes. If your instincts tell you something is bad, it’s bad.” These people studied the past to address current situations from a historical perspective. They were leaders you could look up to who had strong regimented skills as they dealt with the world at a time of war. I believe the world of business is our battlefield. Do you have any favorite business books?

My personal library includes: The Power of We: Succeeding Through Partnerships by Jonathan M. Tisch, chairman and CEO of Loews Hotels. My favorite quotes include: “Eliminate or reduce obstacles by converting potential adversaries and enemies into allies and friends,” and “Make your organization a more positive, ethical and friendly place to work, which attracts better employees.” Good to Great by Jim Collins. In his book, Collins coined the phrase “a culture of discipline.” When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results.

The Trusted Advisor by Charles H. Green. I have met and dined with Charles and admire him so much that I have had him speak to our senior brokers. His inspirational message is that if people learn about each other and trust each other, all else will fall into place. What do you see as new industry trends to note?

It’s survival of the fittest. Growth, acquisition and expansion of business lines will provide clients with a broader platform of services. What did you want to be when you were young?

A music producer. What was your first job?

I worked at RSO Records (a record label in the 1970s headquartered in London) as assistant manager to Robert Stigwood, owner of RSO. The company produced records for artists such as the Bee Gees and Eric Clapton. What do you consider to be an “enterprising” moment in your career?

The day I decided to come to Williams and create a place brokers and employees wanted to be a part of. Joining with FirstService helped fulfill that dream, and now we are part of Colliers International, one of the largest real estate companies in the world. Who are your role models?

My mentor for 30 years has been William Mack, president of Apollo Real Estate Advisors. A highly respected industry leader, he took the time to teach and mold me. From the very start of my commercial real estate career, he has always treated me with respect, and over the years he has become a trusted friend and someone I can always look to for advice. K L www.knowledge- leader.com

B2B

B u s i n e s s to B u s i n e s s Ti p s

Urban Legends Tales of near-mythic service help iconic brands build the promise of exceptional customer care. By Heidi Stout Tretheway Some stories are so remarkable that

Candidates for employment at the Ritz-Carlton hotels, like this one in Atlanta, must undergo a rigorous interview process, which includes a series of questions to determine their level of empathy.

they take on a life of their own. Rewind to 1975. The retailer Nordstrom had just purchased three stores in Alaska from Northern Commercial Company, a department store that sold everything from tires to trousers. Nordstrom retooled the store to focus on upscale clothing and its famous shoe department. Soon after, a customer who had purchased tires from Northern Commercial came to the newly converted Nordstrom store to return the tires. The salesperson gave the woman her money back—even though Nordstrom never has sold tires. In 35 years, this story is so often repeated that a marketing expert telling the story added, “I don’t know if it’s true or not, but it’s part of the brand now.” Stories of service excellence attach themselves to brands with a stickiness unmatched by clever advertising. Icons of service excellence not only consistently deliver great service, they also create memorable experiences that are repeated over and over in stories.

“We realize that for most people, service excellence is hard to define,” says David Bowden, CEO of Colliers International in Canada, “but people absolutely know it when they see it. That’s why we’ve put so much thought into training programs that address both quality delivery and the positive attitude of our team. Great service has to be authentic; it has to give our clients great results and show our genuine care for their business.” 10

| knowledge leader summer 2010

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T he R i t z- C a r lto n : Ro n S ta r r

Pick the Right People

Employees of a branch of Umpqua Bank in Hazel Dell, Wash., came to the rescue of Christine Van and Danh Nguyen who were forced to relocate their wedding to the branch at the last minute because of a fire at their original venue.

For iconic service companies such as Nordstrom, The Ritz-Carlton and Umpqua Bank (a West Coast bank gaining a reputation for its out-of-the-box approach to consumer banking), the first step is finding exceptional people. Nordstrom prefers to “hire really nice people and teach them to sell.” Umpqua Bank CEO Ray Davis has said that he prefers employees with retail backgrounds, to avoid the mindset of many experienced bankers. At the Ritz, the candidate selection process can require as many as 14 interviews. In one interview, a manager asks a series of questions designed to gauge the natural level of empathy in a candidate. “I was fairly confident I was just the sort of caring, conscientious person the Ritz was looking for,” admits Paul Hemp, a writer from the Harvard Business Review who shadowed the Ritz-Carlton’s room service for a week. “In fact, though, even after fudging my answers to a few questions, I got only ten points out of a possible fifteen in the composite hospitality assessment. Tim [Kirkpatrick, the Ritz’s training director] said that wasn’t bad— ‘though, honestly, we’d shoot for someone with a 12.’”

sha n n o n R i g s

Daily Focus After recruiting great people, iconic brands reinforce their culture daily. At Umpqua, it’s a five-minute motivational moment to promote team building. At the Ritz, it’s a 15-minute lineup before each shift, where stories of service and the hotel credo are repeated. At Nordstrom, morning announcements include both good and bad customer feedback to remind salespeople of their ultimate focus. This consistent reinforcement builds iconic brands. And it’s these brands, not competitors, that inspire Dylan Taylor, CEO for the U.S. for Colliers International. “When you’re serious about building a company that’s known for service, you can’t just measure yourself against the competition,” says Taylor. “You have to go beyond your business segment and industry to look at world-class organizations known for exceeding clients’ expectations. That’s the real yardstick for ultimate success.” www.knowledge- leader.com

Extreme Accountability A consistent theme among iconic service brands is the latitude employees are given to take initiative and solve problems. During orientation, Nordstrom employees are given just one rule: “Use your good judgment in all situations. There will be no additional rules.” While most retail salespeople would be reprimanded for taking back products the store does not sell, the direction from Nordstrom has always been to “err in the customer’s favor.” At the Ritz-Carlton, every employee is authorized to spend up to $2,000 per guest, per day to surprise and delight customers. Two Ritz employees told Knowledge Leader that this exceptional freedom also comes with a strong sense of personal responsibility to care for their

resources. In the past decade, neither of them spent more than $600 in a single instance. Last September, when a popular wedding site in Hazel Dell, Wash., caught fire, the manager of an Umpqua Bank across the street came to the aid of the suddenly not-so-happy couple. Without asking for corporate approval, she invited the bride, groom, family and friends into the bank, where the minister performed the service and the reception was held. A wedding in a bank? Unusual, yes, and no doubt destined to become the next oftrepeated story of exceptional service. While some companies strive only for high scores, iconic service firms are building legendary brands by weaving heroic stories of service into our culture. K L Colliers international summer 2010

Working Space

s m a r t d e s i g n f o r t h e wo r k p l ac e

Ring of Gold It shone as a world-class venue at the 2010 Olympic Winter Games. Now the Richmond Olympic Oval continues its winning streak as a stellar example of sustainable design and urban renewal. By Kerry Alexander

knowledge leader summer 2010

Olympic speed skaters raced to the finish at up to 40 miles per hour on long metal blades only a millimeter wide. Their strength and grace captivated the millions watching the Vancouver 2010 Winter Olympics. Equally captivating was the competition’s setting: the Richmond Olympic Oval, a football-field-sized indoor ice arena topped with a five-acre wooden roof. The City of Richmond, British Columbia, and the Vancouver Organizing Committee for the 2010 Olympic Games (VANOC) partnered on this $178 million architectural jewel and engineering marvel that served as a centerpiece for the Games and now anchors the city’s waterfront redevelopment. MHPM Project Leaders was retained to take this project to its own finish line: on budget and in service by the fall of 2008. Franklin Holtforster, president of MHPM notes, “Our mandate was to create an iconic facility that would provide a memorable experience for Olympians in 2010 and continue to serve the residents of the City of Richmond in the future.” Mayor Malcolm Brodie of the City of the Richmond adds, “We had an ambitious vision and a tight timeline at a time when construction costs in the region were escalating wildly. The project team delivered on our vision and design objectives—and did it on time and on budget.” www.knowledge- leader.com

M H P M P r oject L eade r s

The Richmond Olympic Oval was the venue for the speed skating competitions at the Vancouver 2010 Winter Olympics and now serves as a recreation complex for the City of Richmond. It includes two ice rinks, fitness studios, sports hardwood courts, a rowing tank and a combat sports center.

The Oval’s structure is a global first. “Every other long-track speed skating oval is built on grade, but this Oval sits atop a suspended slab,” explains Holtforster. “For the Richmond Olympic Oval, we raised the main stadium floor and tucked the parking garage, change rooms, offices and support facilities into the space below. This change ensured the visual connection to the Fraser River and the mountains beyond, while at the same time reducing the building footprint.” Equally important to meeting the cost and schedule was honoring the planning organization’s commitment to sustainability. “VANOC made a commitment to sustainability for all its venues, so it was an essential factor in the project from the beginning,” notes Holtforster. Achieving the targeted LEED (Leadership in Energy and Environmental Design) Silver certification involved pushing the limits for www.knowledge- leader.com

innovative building with wood, concrete and sustainable technologies. Rain water is captured from the roof to fill on-site ponds and reduce runoff; natural light pours in through translucent polycarbonate walls; and heating and cooling requirements are met, in part, by using waste heat recovered from ice making. “The attention to detail in the Oval’s design and construction is what sets it apart,” offers Mayor Brodie. “With nearly every element of the building, we looked at ways to improve its function by making it more sustainable, improving flexibility or performance, or enhancing aesthetics. The public art and design pay tribute to Richmond’s history, culture and geography.” The crowning glory is the massive roof constructed of pine-beetle-killed lumber, a sustainable and regionally available resource. “The unique wood roof, constructed of not

much more than 2 x 4s and plywood, was a major risk. Nothing like it had been tried before,” admits Holtforster. “Our engineers, Fast & Epp, deserve particular credit for the technical achievement, and our client deserves credit for permitting the team to pursue it.” Brodie concurs, noting that the use of wood in place of metal promotes sustainability, provides practical benefits and is “visually stunning.” Another standout feature is the abundance of natural light. While most sports facilities are lit artificially, the Oval’s design plays into natural light and views. “The skaters were impressed,” comments Holtforster. “They describe it as an uplifting space.” The Oval has received numerous accolades including the award for Best Sports and Leisure Structure from the Institution of Structural Engineers in the United Kingdom, The Royal Architectural Institute of Canada Innovation in Architecture Award of Excellence, The Globe Foundation and World Green Building Council Green Building Practices Award, and the Canadian Wood Council Woodworks Institutional Design Award. “The Oval changed the face of Richmond by putting us on the international map,” acknowledges Brodie. “Now it is the centerpiece of a major new urban waterfront neighborhood that will become a destination for both residents and tourists alike.” In April, the Oval began its transformation from an Olympic venue to a recreation complex and special events center for the Richmond community. It houses two permanent ice rinks for hockey and skating, 12 hardwood courts for basketball and volleyball, a 200-meter running track, four fitness studios, an indoor rowing tank, a combat sports center, and a video wall where bikers can view themselves spinning through virtual courses around the world. It also boasts an indoor parking garage for 454 vehicles. “We’ve already had hundreds of thousands of users through the front doors, and the Oval community continues to grow post-Games,” notes Brodie. “Projects are delivered by teams,” observes Holtforster, “and success on the Richmond Olympic Oval was a team effort. Credit goes to that team. Cannon Design, Dominion Construction, the consultants and the trade contractors made it happen. It was a great project and an honor to work with such talent.” K L Colliers international Summer 2010

Personal Biz

Enhancing the executive lifestyle

Keeping Fit on the Run Think you don’t have time to work out? Fitness experts share tips on how you can stay active while on the road. By Sally Kassab

knowledge leader Summer 2010

fitness centers often sit empty because business travelers simply don’t carve out the time to use them. And can you blame them? Let’s face it, the last thing you probably want to do after battling jet lag and sitting through business meetings is exercise. But experience tells us that working out will not only help you shed a few unwanted pounds gained from airport fast food or fivecourse business dinners; it will also make you feel better, emotionally and physically. So how do you make a fitness program work when work takes you away from home? “Staying mentally sharp on the road is tough enough; staying physically fit is an even greater challenge,” says

Hotel

Evan Money, author of The One Day Diet: How to Live a Cancer Prevention Lifestyle. “Logically, you know working out will only benefit you both mentally and physically, but it’s always the easiest thing to blow off.” To help you get moving, we’ve asked experts, including frequent travelers and personal trainers, for their secrets to incorporating exercise into a busy travel schedule. • Ask the hotel to give you a “workout” call, suggests Carol Margolis, frequent traveler and founder of www.smartwomentravelers.com. If a call won’t work in the morning, ask them to schedule it for sometime in the evening, Margolis says. “This call prompts me to put away the laptop and go exercise. It works!” www.knowledge- leader.com

• Travel with exercise bands. If you really have no time—or energy, for that matter—for an elevator ride down to the hotel gym, you can always do some lunges and bicep and tricep curls with added resistance in the privacy of your own room. Nearly every exercise you do with weights at home can be done with bands on the road. • Set a 15-minute goal. Everyone can take 15 minutes out of their day for a quick walk around the hotel. Even better, for a more effective workout, spend that time going up and down the hotel stairs. • Speaking of stairs... “The first time you go up, take the steps one at a time at a quick pace. The second time, switch to two steps at a time,” says Dr. Eric Plasker, best-selling author of The 100 Year Lifestyle Workout. “The third time, go up sideways, and the fourth time, go backwards. This way, you’re working different muscles throughout your body.” • Shuffle up your exercise program with “Hit the Deck,” a box set of 30 cards that includes a programmable interval timer. The card deck works each muscle group with challenging interval exercises and includes three intensity levels: No Sweat, I’m Glistening, and Sweating Buckets. Do one card—or the full deck of 30—in your hotel room. Check them out at www.powerhousehitthedeck.com. • Try some simple exercises while catching up on current events. Doing moves such as knee lifts, shadow boxing, and karate kicks while watching the news will get your heart rate into the exercise zone, suggests Bob Prichard of the Somax Performance Institute in Tiburon, Calif. “Thirty minutes will cover most news broadcasts, and you have your exercise for the day.” • Save the big workouts for home, recommends Thomas Wright, a black belt in many forms of martial arts. “Just do simple stretching exercises and a few key strength exercises on the road.” www.knowledge- leader.com

If you want a more specific routine, here’s one created just for Knowledge Leader. It’s a cardio boot camp that you can easily do in your room, although you’ll probably be more motivated in the hotel gym.

Begin your exercises after a brief warm-up, and rest for 15 seconds between each exercise. Jumping jacks – two minutes Push-ups – 15 repetitions If this is too many reps, try starting out doing them on your knees and then work up to supporting your entire body. Front kicks – 15 repetitions Side kicks – 15 repetitions The plank – hold for 30 seconds to two minutes This one is difficult, so don’t feel bad if you can’t do more than 15 seconds the first time. Lie flat on your stomach, supporting your body on your elbows. Slowly lift your stomach so that your feet and elbows are the only part touching the ground. Squeeze in your stomach and hold. High-knees running in place – three minutes Tricep dips – 15 repetitions With your arms at your sides, put your hands, fingers facing forward, on a chair or the edge of your bed. Dip so that your arms are at a 90-degree angle. Slowly lift back up and repeat. Squats – 15 repetitions Sit Ups – 30 repetitions Quick feet – two minutes Think football practice drills—run in place at a fast speed. If the above regimen doesn’t appeal to you, try doing 10 minutes on each cardio machine in the hotel gym, slowly increasing the intensity of each rep. And remember—regardless of how you choose to get moving while on the road, any exercise is better than none at all. K L

Colliers international Summer 2010

knowledge leader Summer 2010

www.knowledge- leader.com

For most developers, it was a worst-case scenario: Property values plummeted, financing evaporated, tenants vacated and construction came to a screeching halt.

Business Smarts

That was August 2008, and Mats Johansson had just launched his new development business. But with economic thunderclouds gathering and the capital markets in crisis, Johansson was enjoying a silver lining. “For our kind of business, starting in 2008 was great,” explains Johansson, president of Skanska USA Commercial Development Inc. “It was the perfect time to buy sites for future development. While we haven’t seen as much distressed property as we thought we’d find, we have been able to find heavily discounted opportunities in really good locations.” When Skanska’s commercial development business launched, the team expected a soft market led by falling residential prices. “We never dreamed it would be so dramatic,” Johansson says. “But in the end, it only helped us. We have patience and confidence in what we’re doing.”

Under the leadership of Mats Johansson, Skanska USA Commercial Development’s successful business model is based on “Scandinavian Intelligence.”

Beyond Building

Photos by J aso n G r ow

By Heidi Stout Tretheway

www.knowledge- leader.com

Skanska is a construction powerhouse in both the United States and Europe. Since the 1970s, Skanska has worked as a contractor in more than 30 markets in the United States, though its commercial development arm is a relative newcomer to the country. “We wanted to export the approach to commercial development that has been successful for us in Europe,” Johansson recounts. “To do that during the recession, while most of our competitors were blocked from access to external financing, was actually a good start for us.” Skanska USA Commercial Development initially tapped three people with real estate backgrounds from the construction side of the Colliers international Summer 2010

company and one of Johansson’s Scandinavian colleagues. Together they formed a task force to answer the question of where and on what Skanska should focus its commercial development. In Europe, Skanska’s development arm focuses on residential and commercial product types as well as infrastructure. In the past decade, Skanska has built more than 40 million commercial square feet in Europe. So far, Skanska Commercial has selected just three metropolitan areas in the United States—Boston, Washington, D.C., and Houston—and has acquired sites in each area.

What defines Skanska’s ‘Scandinavian intelligence’? •

Buildings developed with at least 25 percent lower energy consumption than is required by the American Society of Heating, Refrigerating and AirConditioning Engineers (AHSRAE) 2004 baseline building standards A focus on low life-cycle costs rather than initial investment that includes calculating and evaluating the costs over the life of the building Measurable performance for long-term value that includes measuring energy consumption and seeking to reduce the carbon footprint for projects Simple architectural expression with inside-out thinking that creates areaefficient solutions with the tenants’ needs in focus A focus on indoor office working environments to include an inflow of natural daylight, a high-quality sound environment and a high technical standard Straightforward technical solutions to allow for simple technical maintenance and low property management costs in the future The use of well-known, eco-friendly materials

•

knowledge leader Summer 2010

But Johansson said his team is also reviewing a few cities on the West Coast with interest, such as Seattle and San Francisco. Johansson’s team has grown in the past 18 months to 17 people total, including local experts with deep roots in the targeted markets.

Self-Financed Speculation “Our [business] model is unique because our company’s well capitalized through our construction arm. That creates a steady cash flow and revenue stream that allows us to move forward without outside lenders,” Johansson says. Self-financing and speculative building projects are rare in 2010, but Johansson sees it as a competitive advantage because his firm retains equity and full control until it’s time to sell a stabilized, income-producing asset. “We want to secure land in good positions or old buildings we can refurbish and work with entitlements,” Johansson explains of his buying profile. “We don’t have to sit and wait for the right kind of market situation as other developers do,” because most commercial lenders require a substantial amount of preleasing before a project gets the green light for construction. “Depending on the location and local market demand, we can build without any pre-leasing, use our own resources, lease it out and then when we have done our job and gotten great tenants, sell it to an institutional-grade investor,” Johansson says. “The reason people like doing business with Skanska is that they are authentic,” says Hadley Dean, managing partner in Central and Eastern Europe for Colliers International. Dean worked with Johansson during the four years he led Skanska’s commercial development in Poland. “There are three things Skanska does,” Dean explains. “First, they always leave something in the deal—they don’t try to screw the last cent out of the investor. Second, they attract good quality talent, which adds value to the building; and third, they don’t try to skimp on the quality of the building. The end result is the building’s well leased, it’s sold at a fair price, and it’s exceptional quality.” This approach is so successful that Skanska’s business model performs even when the economy doesn’t. For example, Dean says,

Skanska was able to sell two buildings in Poland in the middle of the credit crisis—at a time when no other buildings sold. In the United States, Skanska Commercial Development recently started its first project, a 160,000-square-foot office building at 10th and G Street in Washington, D.C., only five blocks from the White House. “I don’t know many other developers that are building without any pre-leasing right now,” Johansson admits. “But our reason to do it is that there’s not much supply in this market and the location is prime.”

Cultural Consistency Johansson’s five-year vision for his business line puts Skanska Commercial Development in four or five cities, each home to two or three ongoing projects and a strong land portfolio for future development sites. “For us, commercial development is not about having a high number of projects; it’s about having the right projects,” he explains. Beyond developing self-financed commercial buildings and expanding Skanska Commercial’s land portfolio for future development, the business unit is also pushing for build-to-suit projects. Although Johansson himself is Swedish, he’s quick to portray Skanska in the United States as “an American company with Swedish owners.” In his 16 years with the firm, 10 of them in Europe, Johansson notes that the winning formula is not to “just send a bunch of Swedes here [to the United States] to do business; it’s better to build local staff people who really know their playground.” So how does culture translate (not only from Sweden to the United States) while keeping the unique Skanska culture alive in the company’s commercial development arm? “At first, I had just the three people on board from Skanska’s construction unit and another colleague from Sweden,” Johansson recalls of building his team. “They were the seeds, and with the Skanska culture in place in each of our target markets, we were able to step-bystep hire good local people who fit what we are trying to achieve.” Johansson describes his business culture with the words “focus” and “patience.” “Our people have very high standards for doing business, including a clear code of conduct and a lot of transparency—it’s a www.knowledge- leader.com

straightforward approach,” Johansson says. He adds that Skanska is a flat organization without a lot of hierarchy and it tends to take a conservative approach to projects. Plus, its people are decisive. In fact, the company boasts a “Scandinavian intelligence,” which it defines as energy efficiency, a long-term view of performance and value, human-oriented architecture, and simple technology that keeps projects lowmaintenance. “Our intent is to be green for real,” says Johansson, who is a LEED (Leadership in Energy and Environmental Design) accredited professional. “The Scandinavian mindset is about being a world leader for green, and we like to export a lot of the success we’ve had in Europe, building with energy efficiency top of mind.”

Efficiency Experts Skanska USA Commercial Development’s buildings aren’t likely to top a skyscraper list because the company isn’t out to build trophy properties. Instead, it focuses on high-quality buildings with less flash that are designed from the inside out—the humans and their workspaces come before a building’s potential statement on a skyline. “We understand the needs of both tenants and investors, and we’re known for very efficient buildings,” Johansson says. Project managers focus on how common areas look and how work spaces will be used, and then they structure the building around this functionality with efficient floor plates. “We aren’t building something people will talk about 100 years from now, but we’re also not building something with too many square feet you don’t need. We see ourselves as the efficient, green developer who thinks longterm,” he adds. Given the capabilities of Skanska Commercial, its U.S. business line is open to joint ventures and partnerships with investors or developers who don’t have the capability to move forward with their projects right now. “With our green expertise and our selffinancing capabilities, that’s a kind of diversification that’s unique in the market right now,” Johansson notes. “We’ll stick with what we can do efficiently, focused on working with local people who share our vision.” K L www.knowledge- leader.com

Colliers international Summer 2010

Invesco's Atlantabased headquarters.

First Impressions Count When recruiting top talent, make sure your officeâ&#x20AC;&#x2122;s Design is sending the right message.

C h r i s B a r r ett

By Teresa Kenne y

www.knowledge- leader.com

Colliers international Summer 2010

When

you entered the workforce as a young, soon-tobe professional, you might have been inundated with tips on what to wear to an interview to get an edge over other applicants. Clichéd and often unsolicited advice such as “dress for success” and “you only have one chance to make a great first impression” might have been given freely by family and friends. But as you climb the corporate ladder and become the interviewer rather than the interviewee, you may be surprised to learn the advice is pretty much the same—at least as it relates to how you outfit your company’s office space.

“Good people are hard to find,” notes Reg Schram, president of R.R.S. Interior Designers in Toronto. “Money is one way to recruit and retain employees, but it’s not the only way. Environment is very important too, so you have to be mindful of that.” Although today’s job market favors employers, this market, like all markets—good and bad—will turn. And when it does, employers could find themselves scrambling to not only fill newly created jobs, but also to fill newly vacated ones. According to a recent survey by The Conference Board, a nonprofit organization that conducts research and tracks trends for business executives, only 45 percent of employees surveyed say that they are satisfied with their jobs. Furthermore, according to the website CareerBuilder, one in five employees plans to leave his or her current job sometime in 2010. Should this “Great Employee Exodus” (as it’s been dubbed in the media) occur, it could affect a business’ bottom line. On average, it’s estimated that it costs a company one-third of a new hire’s annual salary to replace an existing employee. For a minimum-wage job, that cost is estimated to be approximately $5,026. “Today, employee retention is more of an issue than it has been for past generations. There is more mobility in terms of job changes for anyone in the workforce under the age of 40,” says John Creba with Colliers International’s Toronto office. “Turnover means extra costs for a company.” To understand how companies are using their office space to recruit and retain top talent, Knowledge Leader interviewed representatives from some of North America’s leading businesses and corporations. 22

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k p mb a r ch i tects

In the fall of 2011, PricewaterhouseCoopers LLP will be moving its offices in Toronto to 18 York Street—a LEED-certified building in an emerging area adjacent to the city’s financial district.

Designed by Scott Morris Architects, BDO Canada LLP’s reception area projects a comfortable and stylish—yet practical—first impression.

cou r tesy of S cott M o r r i s A r ch i tects I n c .

Birds of a Feather To attract employees who share your company’s values, it’s important to create a work environment that rings true for your company’s culture. “There always seem to be those companies out there who want to be the most posh. We’ve consciously gone the other way. We want our offices to be easy on the eyes, but not over-thetop opulent,” says Russ Weir, chief operating officer for BDO Canada LLP (BDO), chartered accountants and advisors. “When interviewing potential employees, if they are looking for companies that have imposing offices and cavernous lobbies lined in marble, we aren’t for them. We want to create an environment where, regardless of your position, you can feel comfortable talking with a partner at the firm.” Creba agrees. He and his business partner, Alex Waclawski, assist BDO in finding new office space in markets across Canada. “BDO’s clientele comes from all different industries, so anyone who walks into their offices should get the impression that they are practical and efficient. The space shouldn’t leave guests intimidated,” asserts Creba. “You can tell a lot about the spirit of a company www.knowledge- leader.com

by its office design. Most people don’t want to be in a closed-off organization; they want transparency. They want a friendly, efficient work environment. People work in places because they like the culture and the collegiality,” explains Deborah Scott, founding principal of Scott Morris Architects in Toronto. Paul Harris is a founding principal and creative director with Stratagem Healthcare Communications, a healthcare advertising agency headquartered in San Francisco. In 2008, his company moved into 8,500 square feet of space near the city’s financial district with the expressed intention of attracting and keeping top creative talent. “We wanted the workspace environment to deliver a positive, uplifting response when our employees come to work. People in our industry are more acutely aware of their work environment than people in other industries,” says Harris. “What matters most to them besides working for a great company is a good workplace environment.” When tasking San Francisco Colliers broker Cal Nakanishi with finding the new space, employee recruitment and retention was at the top of the list.

“The move was part of their recruiting strategy, and the space they chose reflects their creative culture,” says Nakanishi. “In San Francisco in the mid ’70s early ’80s, most of the advertising agencies were located in the historic Jackson Square and Lower Telegraph Hill areas, which had cheap warehouse space. Agencies could experiment with very imaginative uses of their office space,” offers Harris. “One agency had a sofa constructed from the back half of a Chevrolet, blinking taillights and all. And some had pool tables and foosball tables—they were the dotcom offices before there were dotcom offices,” he adds. “With our new space, we combined the best of the ’70s and ’90s with the disciplined style of the healthcare industry.” In addition to a creative workspace, many college graduates entering the workforce today are placing more value on a company’s commitment to social responsibility. In a 2009 study by the Harvard Business Review, it was found that 75 percent of U.S. workforce entrants saw social responsibility and environmental commitment as important criteria in selecting employers. More and more companies are taking note of this trend when selecting new offices. Colliers international Summer 2010

Invesco’s Atlanta headquarters was the largest LEED Silver-certified fit-out in the Southeast.

neighborhood. In addition to office, there will be residential and entertainment components as well,” says Forster.

Glen Wong, senior director of corporate properties at Invesco Ltd., a global investment management company, oversees Invesco’s office properties around the world. “One of my first tasks when I joined the company was to relocate the corporate headquarters in Atlanta,” says Wong. Key project goals included designing workspaces that “foster a team-oriented culture and attract, motivate and retain top talent by providing a workplace equal to what they would find in New York or London.” Wong chose a building with a LEED (Leadership in Energy and Environmental Design)-certified shell and core. The subsequent build-out was the largest LEED Silver-certified fit-out in the Southeast. “We, as a corporation, were interested in sustainable design and we wanted to see what we could do to be more environmentally sensitive,” explains Wong. “Since our move to our new offices, we have also fit-out a 45,000-squarefoot, build-to-suit office that is LEED-certified in Canada. In New York, we are working on a 100,000-square-foot office project that will be LEED-certified, and in India, we are looking at the opportunity for a 75,000-square-foot office project to be LEED-certified.”

Location, location, location An office’s address is another factor that potential employees take into account, considering transportation options and nearby amenities like shops, services and restaurants. Colliers International brokers Gordon King, Michael Holzgang and Brad Christenson 24

knowledge leader summer 2010

worked with Northwest Evaluation Association (NWEA), a national non-profit educational services organization, to secure its new office space. Currently located in Lake Oswego, Ore., eight miles south of downtown Portland, NWEA recently signed a lease to occupy the Port of Portland Building in downtown Portland. The move, which is scheduled for December 2010, will be the largest relocation to the downtown core from the city’s suburbs on record. In a news release addressing the move, NWEA Chief Executive Officer Matt Chapman notes, “This move will allow us to increase our overall connectivity to the city of Portland and recruit employees from the entire metropolitan area.” “Using the office space as a tool for recruiting prime candidates was one of the main objectives of the move. And a downtown address just made sense with the type of work they do,” says King. “They are a creative mix of people.” Some companies are choosing to relocate to areas that are untried, but promising. PricewaterhouseCoopers LLP (PwC) in Toronto, for example, is preparing to move its offices in the fall of 2011 to 18 York Street—a LEED-certified building in an emerging area adjacent to the city’s financial district. “PwC is a result of the 1998 merger of Price Waterhouse and Coopers and Lybrand. We had multiple offices at the time of the merger, so we did some rationalizing of our space,” says Dave Forster, managing partner for PwC in the Greater Toronto Area. “Our new offices will be in an emerging mixed-use

Design specialists Schram and Scott both say that when designing a new space or redesigning an old space, there are certain elements that employers should take into account that boost productivity and creativity—such as natural daylight and common areas for staff to relax or collaborate. PwC’s new space, for example, will include a “touch-down” area for employees dropping into the office and an oasis space that replaces the traditional coffee room, as well as a third floor with exclusive staff training rooms and an outdoor urban forest. And NWEA’s future home has a high ratio of conference and “huddle” rooms, as well as an expansive, 3,000-squarefoot deck—complete with glass canopy and fireplaces—that overlooks the Willamette River and Mount Hood. “You listen to all of the HR studies and the differences between a [baby] boomer and someone just graduating from the university. New graduates want a professional environment, with the opportunity to grow. If they don’t have that opportunity they won’t stay,” explains Scott. “So you need to have a perceived order to your professional space. It’s a bit of a road map—how you lay out your space should indicate how things are done in your office, who employees can go to for assistance, and how employees can advance in their careers.” And take into account the differences between generational work styles. Adding elements to the workspace that may seem insignificant, can be very effective. “The average workforce today is about 35 to 40 years of age, and they are used to multitasking. My son’s generation is always texting and doing two or three other things at one time. That’s the environment they’re comfortable in,” notes Schram. “So for an accounting or investment firm, for instance, you might add a flat screen T.V. in view of your associates’ desks that continually displays stock pricing.” In the end, designing or choosing office space really comes down to creating an environment that attracts the type of employees you want to attract, and then keeps those employees happy and productive. “Employers need to establish a social fabric internally,” asserts Creba. “It helps to connect people and makes a company more comfortable to stay with.” K L www.knowledge- leader.com

C h r i s B a r r ett

Handsome is as handsome does

C ock i i is T ck ng The

Through a pioneering survey, experts across the globe weigh in on where they think the commercial real estate industry is todayâ&#x20AC;&#x201D;and where itâ&#x20AC;&#x2122;s headed tomorrow. By Brian K. Miller

knowledge leader summer 2010

www.knowledge- leader.com

It’s time. In what may be a first for a commercial real estate services firm, Colliers International surveyed major real estate investors around the globe for their take on the current and near-term property market. The investment sentiment survey was taken during the first quarter of 2010, and the response was clear: Vacancy is topping out and rents are bottoming out; it’s time to begin adding assets for the next up cycle. “The vast majority of respondents are the far-sighted, deep-pocketed guys who are more conservative and, as a result, generally aren’t experiencing the same level of pain as some of the smaller players, but I was still somewhat surprised by how generally bullish they are across all sectors,” says Colliers International’s Ross Moore. “When we had the meltdown in the early and mid ’90s, I can remember meeting with big institutional investors who said we’d overbuilt so much we wouldn’t need another new office building for 15 years and that once they sold off what they had, they were never going to invest in commercial real estate again,” says Moore. He adds, “This time around, even though values have fallen as much as 40 percent—which is a massive number—people aren’t nearly as pessimistic. It’s very interesting to see this level of acceptance. They’re hurting to varying degrees, but they know it will come back and they want to be ready for it.”

www.knowledge- leader.com

In the survey, respondents are asked to think of the real estate cycle as a clock, with 12:00 being the top of the market and 6:00 being the bottom of the market. When the hour hand reaches 8:00, the upswing is beginning. By the time it hits 10:00, vacancy is steadily falling and rents are rising across the board. Respondents pegged the United States and Asia at 6:00 currently; Western Europe, Eastern Europe and Canada at 5:00; and the Middle East at 4:30. Australia and New Zealand are at 7:00 and rising, according to the respondents, while Latin America, at 8:30, is already officially on the upswing. One year from now, respondents believe only Eastern Europe will still be trending down at 5:00, while Canada, the United States, Western Europe and the Middle East will be at 7:00; Asia, New Zealand and Australia at 8:00; and Latin America will be holding steady at 8:30. The fact that institutional investors are ready to wade back into the market is heartening news given the dead zone of the past two years. Global real estate capital flows in 2009 were off 46 percent relative to 2008 and were 79 percent below 2007 levels. Real estate transactions worldwide totaled just $141 billion in 2009, less than what was tallied in the Americas during just the first three months of 2007. Colliers international Summer 2010

12 Timing is everything

top of the market

bottom of the market

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The survey respondents, the bulk of which are split evenly between North America, Europe and Asia, view the last two years as a good reminder that real estate is highly cyclical and that timing will be more critical than ever to making profits, which is why their due diligence will be more rigorous than ever. Most respondents expect it will be sometime in the first half of 2011 before more normal cap rates—7 to 7.5 percent for office, 8 to 8.5 percent for industrial and 6.5 to 7.5 percent for retail—emerge in Europe and the Americas, and late this year for Asia, New Zealand and Australia. All respondents are concerned about access to debt capital. They say access has improved over the past year in Asia, Canada, Latin America and Western Europe, while it remained the same in the United States, New Zealand and Australia, and has declined in the Middle East and Eastern Europe. One year from now, access is expected to improve for all but the Middle East. As for the cost of debt, respondents say it is higher now than a year ago in the United States, Europe, Middle East, New Zealand and Australia; it is slightly lower in Canada, and it is unchanged for Asia and Latin America. Twelve months from now, the cost of debt is expected to be higher everywhere but Asia, Eastern Europe and Latin America. “[Survey respondents] are the large domestic players who grew throughout 2005, 2006 and 2007 and were going global when the crisis hit,” says Jamie Horne, chairman, Colliers International-Asia Pacific. “In the latter half of 2008 and through 2009, these guys were assessing what they owned and explaining to their investors and boards exactly where they are in terms of their existing portfolios—

where they took a hit and where value has been retained.” “Now we’re looking at a point in time where they are thinking the market is getting better and there should be some good deals out there, but they still need to be quite a bit more conservative than they were in the 2005 to 2007 timeframe, sticking to the highest quality real estate, sticking closer to home and not taking on as much debt if that debt is available when they do purchase,” adds Horne. The respondents’ answers suggest they aren’t hurting so badly that they need to cull their own portfolios at the bottom of the market. But they are on the lookout for those who will need to do this, hoping to score some high-quality real estate in the process that was previously out of reach or that will now help increase their overall returns. Respondents’ lack of appetite for risk or investing outside their respective markets is likely a short-term phenomenon, according to Colliers executives, born as much out of a lack of opportunity as a renewed cautiousness. The stated desire to stick close to home may be attributable to the fact that U.S. firms are expecting good deals to become available in their home country, while firms in other countries believe their markets are poised to recover more quickly than the United States. So, although foreign firms are sticking close to home this year, it may only be because they don’t believe the timing is right for investing in the United States. “Last year everything stalled; very little occurred until the fourth quarter as vendors did not have to sell, and both buyers and vendors were not comfortable with where pricing was because there were no benchmarks,” says Milton Lamb, Colliers’ Toronto-based senior vice president of investment and member of www.knowledge- leader.com

Colliers’ Global Investment Services Team. “We just completed a major investor road show in Canada during which only one group talked about selling and everybody was more apt to buy.” “The large pension funds are doing their homework this year in anticipation of being able to find quality, major financial market product in the U.S.—product they wouldn’t normally be able to obtain at reasonable pricing but now may be able to due to market dislocation. They are expecting to get access to some of the CMBS-related [commercial mortgage-backed securities] product this year but are expecting a lot more to mature in 2011 and 2012,” he further explains. On the debt side, Lamb says that on the heels of very little financing in 2009, most of the major life companies, banks and pension funds in Canada have a strong appetite for lending this year, albeit relatively conservatively. “I’m talking 60 to 65 percent loan-to-value [LTV], which isn’t a big change in Canada where even in the headiest days, the LTV on the vast majority of loans wasn’t ever higher than 75 percent,” Lamb says. “That’s why we didn’t see the same uplift or the same drop as other markets; we didn’t drink as much of the champagne, so we have less of a hangover.”

Time is on your side Large investors from Canada aren’t the only international players positioning themselves to go after distressed assets tied to CMBS debt that was provided between 2005 to 2007 and set to mature between now and 2013. Lisa Campoli, a Colliers executive vice president based in Boston, says investors from Germany, Asia and the Middle East are also conducting due diligence for opportunities expected to arise www.knowledge- leader.com

late this year and next, and of course the healthy U.S. players will be in the mix as well. “I think everyone is frustrated that it’s taking quite a bit of time for opportunities to hit the market,” she says. “We are moving in the direction of increased deal flow and increased liquidity, but the pace is disappointingly slow for many buyers.” The pent-up demand has led to some lowerthan-expected capitalization rates on the few core U.S. properties that have become available, which may ultimately increase deal flow. “There have been some key deals done in the first quarter that have demonstrated much more attractive asset pricing than many have expected, with cap rates into the 6 percent range instead of the mid 7 percent range,” Campoli says. “It may turn more core property owners into sellers.” With regard to distressed assets—the other end of the property spectrum—Campoli believes the reason those have taken longer is the lenders. “Whether they are balance sheet lenders or special servicers, there’s been no pressure for them to write them down and push them out onto the market,” she explains. The middle of the spectrum, meanwhile, is suffering from a lack of interest. “There’s plenty of potential in core assets and highly distressed ones, but what’s missing at the moment is the middle of the range, sort of value-add assets on the supply side,” acknowledges Campoli. “It’s a bit of a barbell.” As for there being a buy-sell gap, to which some respondents alluded, Campoli thinks it is less a disagreement on price than a current lack of product. Looking forward, she notes, “We’re seeing enough of an uptick in deal flow that benchmarks are starting to fall into place.” That is to say, it’s time. K L

upswing

10 vacancy is falling rents are rising

Colliers international Summer 2010

Behind the Scenes

Jason Underwood, chief executive officer and trustee at Whiterock REIT, shares his insights and enthusiasm about Canada’s investment market, sustainable building practices, and his vision for the future. By Sarah Eadie

June 2005, Whiterock Real Estate Investment Trust (Whiterock REIT) began trading on the TSX Venture Exchange under the direction of Chief Executive Officer and trustee Jason Underwood. When he introduced the trust, Underwood had dreams of building a high-performing Canadian investment platform that focused on delivering best-inclass services and products to clients. Fast forward five years to today—in a market of limited investment activity—and Whiterock’s portfolio continues to grow, with $900 million in assets owned and managed, 50 percent of which are located in the Greater Toronto Area. In fact, in the past nine months alone, Whiterock has added $370 million (CAN) in real estate to its portfolio, which currently includes office, industrial and retail properties located in select markets across Canada, including Alberta, Saskatchewan, Ontario, Quebec, Nova Scotia, New Brunswick and Prince Edward Island. Underwood, a Florida native, grew up in a

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In the past nine months alone, Whiterock has added $370 million (CAN) in real estate to its portfolio. www.knowledge- leader.com

”

family of real estate developers. His father was a condominium developer who taught him the “bricks and sticks” of the business. After graduating from Cornell University, Underwood was drawn to commercial real estate and the opportunity to build a diverse service platform while connecting with clients. Underwood says his approach to client service is much like operating a small business. “We are getting close to $1 billion dollars in assets under management,” he says, “However, we still have a small business approach: Know your customer and product and continue to service your customer and improve your product.” As Underwood puts it, “Managing our real estate portfolio is like running a resort: Our customers check-in every day, and most often spend more time here than anywhere else. Given that, I want to run an operating platform that is absolutely customer driven.” While customer service drives how Underwood manages his portfolio, enterprising approaches to sustainable business are among his greatest motivators. Whiterock has been heavily involved in Canada Green Building Council’s “GREEN UP Program,” providing tools, performance standards and resources to help building owners and operators understand, measure and compare the performance of their building portfolios. This, in turn, helps building owners find efficiencies and make improvements. “We’ve been gathering all of our utility bills over the past year and have begun tracking our consumption,” notes Underwood. “We’re also working with the Real Property Association of Canada on their ‘20 by ’15’ initiative, a national energy consumption target for office

buildings. The goal is for office buildings to reach a target of 20 equivalent kilowatt hours of total energy use per square foot of rentable space per year by the year 2015. I think it’s a wonderful initiative that we’ve become involved in. My goal for Whiterock is to not only run a best-in-class platform and make outsized returns for our investors, but also be a leader in sustainability.” Underwood’s enterprising approach is also evident in the way his business operates day to day. Whiterock employees work in an open-concept environment without cubicles or private offices. “I sit in the middle, and everyone can hear everything I say and do,” explains Underwood. “I think it’s important that people don’t operate in defined boxes. Everyone should be able to offer suggestions or share their thoughts.” When asked about what lies ahead for Canada’s investment market, Underwood believes “the wind is at our back.” “A lot of people came into the downturn thinking that real estate would perform similarly to the last downturn, but it hasn’t. In our last downturn, commercial real estate was in oversupply; this time around it’s been more financially- and creditdriven,” Underwood observes. “As people start to realize that, I expect to see money coming back to the sector rapidly. There is currently a lot of access to capital in Canada; owners are ready to sell because they can get better valuations now than they could a year ago, and bid-ask spreads between buyers and sellers are closing considerably,” he says, adding, “I expect to see more transactions in the near future, and Whiterock will participate in our fair share.” K L Colliers international Summer 2010

Behind the Scenes

The Doctor is In For Sutter Health’s Director of Real Estate Ed Erwin, measuring a property’s value has very little to do with dollar signs. By Teresa Kenney

Quality health care . In the United States, this headline-grabbing issue has been the hot topic of debate on news programs, across dinner tables, and even in boardrooms. For Ed Erwin and his colleagues, however, delivering quality health care is not so much a debate topic as it is a business model. Erwin is director of real estate for Sutter Health, one of the leading not-for-profit networks of health care providers in the United States, with 100-plus member clinics, hospitals and practices located primarily in northern California. “Our southernmost member is in Los Banos [in central California] and our northernmost is in south Oregon. We go as far east as the foothills of the Sierra Nevada, and we have one hospital in Hawaii,” explains Erwin. Although the organization was officially created in 1981, its namesake, John Sutter, was one of California’s earliest pioneers during the Gold Rush. Sutter founded Fort Sutter in 1841 in an area that is now Sacramento, and the first hospital bearing his name was constructed near the fort in response to the influenza epidemic of 1918. Sutter Health’s roots are rich with innovative pioneers like Sutter. During the Great Depression, physicians at Sutter General Hospital saw a need for an alternative vehicle for health care financing, so they created the first open enrollment hospital insurance plan in the United States. And, in 1962, Sutter Memorial Hospital surgeons Edward Smeloff and Robert Cartwright revolutionized care with the Smeloff-Cutter prosthetic heart valve. 32

knowledge leader summer 2010

Sutter Health’s connection to enterprising solutions is seen in its real estate portfolio as well, where a property’s value is placed on its use, not its price tag. “The most important thing we look for in a property is its value in relation to patient care— how it will serve the needs of our operations, and more specifically, the people we treat. We’ve acquired land, homes, hospitals—we even own a shopping center, a vineyard in Sonoma, and a hotel in San Francisco,” says Erwin. “How we put a piece of property to use for our patients is of far greater value to us than its price.” The most rewarding project that Erwin has worked on since joining Sutter Health in 2006 was the acquisition of a hotel in San Francisco’s Cathedral Hill district. “We purchased the hotel and the properties

“The most important thing we look for in a property is its value in relation to patient care.” Ed Erwin, Sutter Health

surrounding it to assemble a site for a new hospital. It’s a very high-profile corner, encompassing a block and a half,” explains Erwin. “It was a very challenging and complicated transaction but will also be very rewarding once construction is completed. The total project costs exceed $2 billion.” Erwin says that he’s motivated by his job because “it’s always interesting and diverse and challenging. It’s very satisfying. I’m not providing the medical care, but I am helping to build the environment for that care.” When asked what advice he would give to someone coming into the real estate industry today, Erwin advises, “Be patient. Long term, real estate is a fantastic career. It’s a difficult time right now, so you just have to approach your work as building your reputation and your presence for your career. Right now, I think a lot of investors are taking advantage of the down economy in terms of getting bargains, and those lower costs will serve well for companies and individuals over the next few years.” In 2009, the Lewin Group, a national health care and human services consulting firm, ranked Sutter Health as California’s top health system in health care quality. And that’s really what matters most to Erwin. “Success to me is working my little piece of the world in a way that helps my company better meet the needs of our patients and communities,” says Erwin. “Real estate is not our core business; it’s a means to deliver service. So my success is contributing in my way to help our network do a better job for our patients.” K L www.knowledge- leader.com

Investment/Leasing Opportunities A SELECTION OF COLLIERS INTERNATIONAL AVAILABLE PROPERTIES FOR SALE

135,504 SF Industrial Building For Sale

FOR SALE & Lease

20 Barnes Court Vaughan, Ontario, Canada

10 Didak Drive Arnprior, Ontario, Canada

• 15.35 acre site • Zoned General Industrial that allows for outside storage • Located in Arnprior Business Park, 20 minutes from Ottawa • Close to Highway 417 • Ceiling height: up to 28' • Electrical: 2,000 KVA, 3 Phase on two transformers • Dock and grade level loading • List Price: $2 million

Ed Belanger 613.683.2210 ed.belanger@colliers.com

• 115,997 SF on 5.102 AC • Heavy power and cranes • Excellent manufacturing facility • 22 feet clear (42,281 SF) and 33 feet (65,681 SF) • Asking Sale Price: $7,950,000 • Asking Lease Rate: $5.50/SF

Warren Wilkinson 613.683.2207 warren.wilkinson@colliers.com

John Powell 416.791.7235 john.powell@colliers.com Bill Pitt 416.791.7234 william.pitt@colliers.com

FOR SALE

Waikoloa Highlands Center

264,492 SF Class A High Rise 150 Spear Street San Francisco, California

68-1845 Waikoloa Road Waikoloa Village, Hawaii

• Exclusive grocery anchored shopping

center in Waikoloa Highlands • Below replacement costs with strong barriers of entry • 8.78% cap, 10% cash/cash on 76% occupancy = great cash flow with upside! • Durability of income from existing tenants

FOR lease

• Owned by Principal Global Investors

Tom J. Lagos 213.532.3299 tom.lagos@colliers.com Mark D. Bratton 808.523.9708 mark@colliershawaii.com

• Located on coveted Spear Street Corridor • 5,000 – 15,500 SF available. • Beautiful bay views • Efficient floor plates • In-house quick-responding property management and 24/7 security • LEED Gold certified.

Scott Harper 415.288.7837 scott.harper@colliers.com Shane Quivey 415.288.7878 shane.quivey@colliers.com www.150spearstreet.com

FOR lease

Containers 428 Terminal Avenue Vancouver, British Columbia, Canada

• Phase One: 75,527 SF with +/18,500 SF floor plates • Phase Two: 145,600 SF with +/19,000 SF floor plates • Targeting LEED Gold • 18 month construction timeline for occupancy from lease execution

FOR sale

SUMCO’s Advanced Tech Owner/User Opportunity 537 Grandin Road Maineville, Ohio

Colin Scarlett 604.661.0879 colin.scarlett@colliers.com www.containersonterminal.com

• ~35,000 SF office, ~15,000 SF warehouse, ~75,000 SF clean-room manufacturing • Offering price below replacement cost • Good site infrastructure • Unique two-source power supply • Extraordinary water supply (2M GPD), corresponding sewer capacity • Large chiller capacity • Onsite hazardous material neutralization capability

Doug Barrett, SVP, Director ATREG 206.223.0206 doug.barrett@colliers.com Erin Conger, Vice President ATREG 206.223.0496 erin.conger@colliers.com www.atreg.com/sumco

Investment/Leasing Opportunities A SELECTION OF COLLIERS INTERNATIONAL AVAILABLE PROPERTIES FOR lease

FOR SALE

World Class Industrial Facility

Premier Orange County Industrial Space

625 Luxembourg Street Granby, Québec, Canada

905-917 East Katella Avenue Anaheim, California

• High capacity electrical system • Clean room environment • Crane systems in place • Building: 237,451 SF • Land: 1,206,634 SF

Norman S. Laff 514.764.2824 norm.laff@colliers.com Arnold Fox 514 764 2823 arnold.fox@colliers.com www.colliersproperties.com/ 625luxembourg

• 152,280 SF Industrial Building (divisible to +/- 51,363 SF) on 5.1 AC • High identity platinum triangle location on Katella Ave. • Just west of Anaheim Stadium • Immediate access to Freeways 5, 57 and 22 • 19 dock high doors • 24' ceiling clearance • Fenced yard

Steve Schloemer 949.724.5523 steve.schloemer@colliers.com Andrew Becket 949.724.5517 andrew.becket@colliers.com

FOR SALE & Lease

FOR lease

State of the Art Facility!

The Landing at Hawk’s Prairie

1055 Squires Beach Road Pickering, Ontario, Canada

1200 – 1350 Galaxy Drive Lacey, Washington

• 1055 Squires Beach Rd. is a 209,890 SF industrial building on 9.38 AC of land • Located east of Brock Rd. and south of Bayly St. in Pickering, Ontario • Less then 10 years old • 28'-clear height, 17-truck level and 3-drive in shipping doors.

Hanan Goldfarb 416.791.7228 hanan.goldfarb@colliers.com Paul Finlayson 416.791 7242 paul.finlayson@colliers.com

• The premier retail development in South Puget Sound • Located south of Seattle, WA • 8-building two phase development • 125,000 SF • LA Fitness anchored, abundant parking, near Joint Base LewisMcChord • HHI $70,511, 5-mile pop 203,793

www.colliers.com/toronto

Connie Boyle, CCIM 253.680.6628 connie.boyle@colliers.com www.colliersproperties.com/ landingathawksprairie FOR SALE

FOR SALE & Lease

124,997 SF Available For Sale or Lease

Investment Opportunity at the Four Seasons Resort Whistler

1335 Park Center Drive Vista, California

4591 Blackcomb Way Whistler, British Columbia, Canada

• Central North San Diego County

location • Divisible into 38,000 SF • Outside storage available • Newly refurbished interior & exterior • Building top signage • Column spacing is 40' by 40' • Four dock and six grade level doors • For sale for $103.50/SF or lease from $7/SF

Tucker Hohenstein 760.930.7966 tucker.hohenstein@colliers.com Conor Boyle 760.930.7967 conor.boyle@colliers.com

• En-bloc offering of 59 luxurious units that provides a purchaser with the ability to acquire a large position of the best units • Managed by Four Seasons Hotels and Resorts • Long-term value with the ability to realize revenue from inclusion in the Resort’s formal rental pool program • Ability to utilize the units for personal use

Tom Andrews 604.661.0846 tom.andrews@colliers.com Alam Pirani 416.643.3414 alam.pirani@colliers.com www.colliershotels.com

Investment/Leasing Opportunities A SELECTION OF COLLIERS INTERNATIONAL AVAILABLE PROPERTIES FOR SALE

FOR lease

5049 – 74th Avenue South east

High-Tech Office/ Flex Building

Calgary, Alberta, Canada

5510 Northeast Elam Young Parkway Hillsboro, Oregon

• 55,296 SF on 3.88 acres available • Includes 14,553 SF of office

• 5 drive-in doors; 1 dock door • 2 – 10 TON cranes; 1 – 15 TON cranes • Drive-thru loading in warehouse • Surplus yard for storage • Located in Foothills Industrial District

• 45,444 SF for lease with mix of

Jon C. Mook 403.571.8756 jon.mook@collierscalgary.com Casey Stuart 403.298.0421 casey.stuart@collierscalgary.com

perimeter private offices, multiple conference rooms, work stations, testing lab, computer room • Walking distance to Commuter light rail station • Shipping/receiving areas with two dockhigh doors and one grade level door • 1,755 amps of available electrical power; fiber optic served

Mike Thomas 503.499.0059 mike.thomas@colliers.com Howard Larson 503.499.0083 howard.larson@colliers.com

FOR lease

FOR SALE

Memphis Metro Market

User sale 102,160 SF

11624 South Distribution Cove Olive Branch, Mississippi

12851 Midway Place Cerritos, California

• 1,170,218 SF available for sublease

in the Memphis Metro Market with potential tax incentives • 251 (9' by 10') loading docks • 3 (12' by 14') drive-in doors • 225 trailer spaces expandable to 400 • 36' clear height • 50' by 50' column spacing • Column Spacing: 50` x 50` • Sprinkler: ESFR • Parking: 225 Trailer

• Cerritos Industrial Park

Gene Woods, SIOR, 901.312.4905 gwoods@colliersws.com

• Large fenced yard • 24' minimum ceiling clearance • Extensive landscaping • Corporate environment • Multi-tenant capability • Immediate access to I-5, 91, and 105 freeways

FOR SALE

Mar Azul – Prime Oceanfront Development

Highway 2 & Villeneuve Road St. Albert, Alberta, Canada

• Excellent commercial development opportunity: 31.15 AC, $15,572,500 ($500,000/AC) • Zoned AG – Agricultural Land • Close to major retail stores: Walmart, Home Depot, SaveOn Foods, Future Shop, Totem & McDonalds • Excellent highway exposure

Pat Remolacio 949.724.5585 pat.remolacio@colliers.com www.colliersires.com/ 12851midwaypl/

www.collierswsproperties.com

North Land Development

Bret Hardy 213.861.3321 bret.hardy@colliers.com

Aruba, Dutch Caribbean

• Located in downtown Oranjestad,

Aruba, Dutch Caribbean

• Waterfront property adjacent to

Aruba’s only cruise ship terminal

Mike Keating 780.969.3028 mike.keating@colliers.com Matthew Best 780.969.3036 matthew.best@colliers.com

• Partially completed 7-storey mixed-

use development

• 129,000 SF of retail and residential

space

• Potential for hotel use or complete

project as planned

Mark Lester and Alan Johnson 604.681.4111 www.uniqueproperties.ca

Bank Notes

Commercial Financing News

Flush Funds After holding their cards close to the vest, capital providers are back in the game. By Jack M. Cohen, CRI, CMB Recently, I attended t wo high-prof ile industry conferences. The overarching theme for both was the same: The market is flush again with capital and capital providers looking to lend. Several insights emerged from these two conferences, including:

Money is available. Life insurance companies believe they will lend $32 billion to commercial real estate—double what they invested in 2009. Additionally, six new commercial mortgagebacked securities (CMBS) conduit lenders are taking applications and actively making loan quotes. The market has trifurcated into tiers. Tier 1 is life insurance companies, which are seeking the highest quality deals with the best borrowers, the best products and the best locations. They will price loans accordingly—as low as 5.75 percent. Tier 2 represents the banks. Bigger and/or healthier banks will “reach up” to Tier 1 and compete with life insurance companies

Apartments, office, industrial and retail are the primary property types of interest to lenders.

knowledge leader summer 2010

when they can. Smaller regional banks, on the other hand, will reach down to Tier 3 and, accordingly, they will price higher. Tier 3 is made up of finance companies and conduits who can’t compete with these lenders—or who choose not to compete because of yields. However, capital and capital providers are actively financing again with an interest rate range of 6 to 8 percent.

Proceeds seem to be in the 60 to 65 percent range but competitive pressure throughout the year should move life insurance companies to 70 percent and CMBS conduits to 75 percent. There is an outside chance that by year-end, a momentum play will create conduits in the 80 percent range. This is bad for the industry but great for users of capital.

Loan-to-value is no longer a driving force in underwriting. Lenders are uncomfortable with market fundamentals and therefore the question of the true value of commercial real estate. Lenders are underwriting against debt service coverage ratio and debt yield. Debt yield is the ratio of verifiable net operating income divided by the principal balance. Lenders want a debt yield number between 10 and 12 percent, down from 12 to 17 percent.

Lenders are motivated to make new loans because doing so helps to mitigate the risks in their existing portfolios. There seems to be no way to differentiate one capital provider from another. They think alike and seek alike. Working with an experienced financial intermediary can help ensure that lenders select the right deals with the right structures for the right reasons. Relationships will matter. K L

Apartments, office, industrial and retail are the primary property types of interest to lenders. There is some appetite for hotels and medical offices. There is light appetite for vacancy—in-place income is key. There is also capital available for the borrower who needs to improve a property but doesn’t have the necessary funds—but it will be expensive. Interest rates will be flat to lower in 2010, and, as the year progresses, spreads are likely to come in. Over the next three years, interest rates will rise.

Jack M. Cohen, CRI, CMB is chief executive

officer of Cohen Financial, a national real estate capital services firm recognized as one of the nation’s largest originators of commercial real estate financing. For more information, visit www.cohenfinancial.com.

www.knowledge- leader.com

Follow the Leader

Pr o f i l e i n l e a d e r s h i p

The Art of Presentation These three keys can help you deliver engaging and inspiring presentations. By Gerald Clerx This isn’t just theory; it is a fact. The study of human behavior, or psychometrics, demonstrates why having the right product or service solution isn’t always enough. Presenting it in alignment with the client’s decision-making process is equally important. So before you deliver your next presentation, take some time to get to know your audience and what they need to hear or see to align with their decision-making needs.

Follow a Logical Structure

Noted Irish playwright and Nobel Prize

winner George Bernard Shaw once said, “In the right key one can say anything, in the wrong key nothing. The only delicate part is the establishment of the key.” This is especially true when it comes to delivering engaging and inspiring sales or information presentations. Unfortunately, many sales professionals and business leaders deliver presentations that fall far short of their true potential. If you want to open doors, close deals and inspire others, here are the three keys you need to deliver powerful presentations:

Tailor Your Content You’ve likely noticed that you can say one thing to one person and he or she will feel utterly compelled to take action, but that same message delivered to someone else will leave him or her completely uninspired. Words, images and evidence that favorably impact one listener can have a neutral or negative impact on another. www.knowledge- leader.com

Structure refers to the sequencing strategy of your message. Think of a presentation as a bridge that spans the gap between your customer’s current reality and desired reality. Everything you do or say must be sequenced in a way that moves the customer toward the desired outcome. A logical structure achieves this objective. When delivering your next presentation, apply the following formatting strategy, which applies a “whole brain” reasoning approach: Begin your presentation with a “Statement of Intention” (SOI) that announces the purpose of your presentation. And keep it short—8 to 18 words. For example: “My purpose today is to show you how to design and deliver engaging and inspiring presentations.” Follow your SOI with the main body of your presentation, segmented into three primary parts. A three-part plan is easy to follow and supports your listener’s logical decision-making needs. In fact, this article is structured using a three part plan: Part 1—Tailor Your Content; Part 2—Follow a Logical Structure; and, Part 3—Apply Delivery Impact Techniques. The final element of your presentation is the conclusion, which should incorporate both a summary statement and a call to action. The summary statement highlights the main

points of your presentation. The call to action requests that your audience take the appropriate next step.

Apply Delivery Impact Techniques You can have the finest content available, formatted within the ideal structure and yet lose the prospect because of an ineffective delivery. Delivery impact techniques help you capture listeners’ attention, maintain their interest, and enhance their retention. Here are five tips for an effective delivery: •

•

Connect: Intersperse your presentation with three to five seconds of eye contact with each person in the room. Hold eye contact long enough to make a meaningful connection. Vary: Shift your vocal tone, pace and volume appropriately to hold interest and/or recapture attention. A monotone will cause the listener’s mind to wander. Engage: Involve your listeners mentally (relevant questions), emotionally (appropriate humor) and/or physically (appropriate actions) to ensure they remain attentive to you and your message. Pause: Use silence to add emphasis or to allow your listeners to reflect on the key points of your presentation. But be careful not to overdo it; otherwise, you will simply appear lost and confused. Gesture: Use purposeful hand gestures to reinforce key points of your presentation, but do so sparingly. Too much gesturing will become a distraction.

When you tailor your content, follow a logical structure and apply delivery impact techniques to your presentations, you will engage and inspire your audience, and, in the process, accelerate your success. K L

Gerald Clerx is the author of the GAP Analysis© professional selling series. For more information, visit www.thegapanalysis.com or call 888.388.6388. Colliers international summer 2010

CSR

c o r p o r at e s o c i a l r e s p o n s i b i l it y

The Business of Giving Streetohome Foundation Board Chair John McLernon (left) with Vancouver Mayor Gregor Robertson at the official launch of the foundation in February 2009.

You’d expect to see someone like John McLernon, honorary chair and co-founder of Colliers International, attending opening night at the opera, mingling with a veritable Who’s Who of Vancouver, British Columbia. In fact, it’s probably no huge surprise to learn that he sits on the board of the Vancouver Opera, the second-largest opera company in Canada. That’s the kind of safe, comfortable civic engagement in which a prominent member of the business community would be expected to participate. But then, McLernon doesn’t settle for “safe, comfortable” choices. And he certainly doesn’t isolate himself from the troubling issues in his 38

| knowledge leader Summer 2010

community that others may prefer to ignore. While some people’s idea of helping the homeless includes donating to a shelter or digging in their pockets for spare change for an outstretched hand, McLernon is digging deeper for a solution to homelessness, trying to resolve it systematically. And while he can comfortably rub shoulders with fellow arts patrons, he’s equally as comfortable being on a first-name basis with some of Vancouver’s homeless and drug-addicted residents through his work with three charitable organizations: The Vancouver Foundation, Streetohome Foundation and Portage BC. “It’s important to help your community,”

McLernon says simply, when asked about his many and varied volunteer positions. The importance of community involvement is something his parents instilled in him. “My mother and father were involved in community activities, and I always thought it was an important part of one’s life,” he notes. In his mid-20s, McLernon served as a director of a private school. “I went through a series of projects—my main focus was initially in education and the arts. I later moved to focusing on the homeless and addicted.” His interest in the issue of homelessness began when he was asked to join the board of the Vancouver Foundation, the largest community foundation in Canada. He chaired the foundation’s homeless youth advisory committee. “Homelessness is one of the most significant issues [facing society] today,” he says. “It’s very complex and before you can solve it, you have to understand it.” As McLernon explains the various facets of the issue, he sounds more like a social worker than a semi-retired CEO. “It’s everything from people exiting foster care, addictions and chronic homelessness to mental health or First Nations [Native American] issues,” he says. “There’s not one box that fits all. It’s one thing to put a person in a home; it’s another thing to help that person be self-sustainable.” McLernon’s growing interest in solving the problem of homelessness led him to chair the Streetohome Foundation, an organization that supports affordable housing and services for the homeless. Today, he is also regional chair for Portage BC, a long-term residential addiction treatment program for young people. “Those are my current responsibilities. It does take up time,” he admits. But the rewards of being so deeply involved in the community far outweigh the costs, McLernon says. www.knowledge- leader.com

T i ffa n y C oo p e r

Investing in your community through volunteering can pay big dividends, personally and professionally. By Cheryl Reid-Simons

Streetohome Foundation committed $500,000 for renovations to the Aboriginal Mother Centre (right). When complete, it will include 16 transitional housing units for mothers with children, as well as a licensed daycare for 25 children.

left : J ay B lack ; r i g ht : Ne i l G r i e g s

“It’s important to be involved in the community from a helping point of view,” he says. “You’ve got the leadership ability to represent yourself and your personal beliefs. You get satisfaction that you’re helping and providing advice—and where required, helping to raise funds.” Aside from feeling good, McLernon says volunteering provides a unique education about what’s really happening in your own backyard. “You learn a lot. Working with different organizations is a great way to learn about parts of your community you might not otherwise have contact with,” he says. It’s also a great way to make business contacts you might not be able to through your day job. For example, McLernon was part of Vancouver’s successful bid for the 2010 Winter Olympics and served as an Olympic Ambassador, providing feedback to the head of the Olympic organization about the public’s reception to the

plans for the Games. “Life’s all about networking. These are fantastic opportunities to network with other business leaders who make a difference in the community. On a personal and corporate level, you’re meeting some very key people outside of the boardroom and working with them in a different way.” It’s also good business for companies to encourage their employees to become active, he notes, something he emphasized when he was CEO of Colliers. “I felt the company should be represented in the communities it was making its revenues and profits from,” he says. “It demonstrates your company’s leadership in the community.” Of course, no one starts out by joining the board of a huge foundation, so McLernon urges people to follow their hearts and their interests

“If you’re working in a community and you’re earning in a community, you should be giving back to the community.” John McLernon, honorary chair and co-founder of Colliers International www.knowledge- leader.com

to get started volunteering. “Some people have very specific interests that they can easily find outlets for,” he says. That’s how he began, volunteering for organizations that represented two of his top personal passions: art and music. He went from being a season ticket holder for cultural activities such as the symphony, opera and theater to serving on the boards of various arts organizations like the Vancouver Art Gallery, the largest art gallery in Western Canada. He was also a founding director of the Waterfront Theatre, a 224-seat performance theater on Granville Island in Vancouver. For some, the entryway to deeper community involvement isn’t as clear. The key, he says, is finding the path that best fits you. “It can start as easily as helping coach your kids in sports,” McLernon says. “Immediately you’re networking with other parents. Then in conversations you can learn about other areas that people are working in and find a place that fits where your interests lie.” McLernon acknowledges that it’s sometimes difficult to find the time to engage in volunteer work. But he insists that it’s important enough to make time to do it. “If you’re working in a community and you’re earning in a community, you should be giving back to the community.” K L Colliers international Summer 2010

In Focus

F r o m t h e Pr e s i d e n t & C EO

Great Expectations A brand says a lot about a company. With a new look and fresh perspective, Colliers International’s voice is loud and clear. By Doug Frye

A brand is more than a marketing slogan. It is a promise. And not just any promise; it’s a promise that people believe will be fulfilled. 40

knowledge leader Summer 2010

their strengths and to communicate those to their clients in such a way as to create alignment between expectation from the customer and delivery of the product or service. This is what gives a brand its power: expectation realized. Recently, Colliers International experienced an exciting move forward for its brand. A series of landmark decisions by our global leadership put us in a position to go to market as a more aligned and singular organization punctuated by a new look and feel. And it’s helped us define our promise, which is to create a memorable service experience for our clients. We are going so far as to coin it the “Colliers experience.” The most important thing about making that declaration—that promise—to the world is that it has to ring true. If Apple didn’t back up its promise of innovation with cuttingedge products, its brand image would suffer. If customers were consistently met with less-thanroyal treatment at a Ritz-Carlton, you can be sure its crown would tarnish. With all the cultural differences that Colliers International enjoys as a global organization, we are amazingly similar in our core beliefs and our commitment to delivering service excellence. Around the world, we consistently do a great job of delivering results for our clients. But it’s how we deliver the results that makes us different. Our clients like to do business with us because they feel valued. It’s clear to us, and to them, that the relationship is worth more than the transaction. This is the essence of our company and the cornerstone of the Colliers brand: the shared belief that it’s not enough to just deliver real estate services—we want to accelerate the success of everyone we come in contact with. Like many legacy brands, we are not moving away from the core values that define us.

Doug Frye is the global president and chief executive officer for Colliers International.

Rather, we are leveraging these values to create differentiation in the market and build our brand equity. We are now in a position to deliver on our promise—and to do this seamlessly, under one name, in all our markets across the globe. And what is truly great about evolving our brand is the host of new opportunities it opens up for us. This evolution takes us to that next level as a company. Our promise isn’t small. We want it to be absolutely clear in the minds of our professionals and our clients what we stand for: delivering the absolute best service experience. We want to be known for the Colliers experience. And we want our brand images to become iconic symbols for this. We have our logo—still unmistakably Colliers International—but with a new vitality. We have our tagline—Accelerating Success—which clearly defines our culture. But most of all, we have our people behind our promise. They define the Colliers experience for our clients. And it is our clients who have allowed Colliers International to emerge as one of the most recognized and respected brands in the world. K L www.knowledge- leader.com

r i ck dahms

Brand. It’s probably one of the most misused and misunderstood words in the business world. When most people are asked to define a brand, they describe a logo or recite a tagline. True, ubiquitous pairings such as Nike’s swoosh and just do it slogan and Coca-Cola’s distinctive script and red-and-white color palette are highly identifiable icons for these companies. They are not, however, in and of themselves, the essence of these companies’ brands. A brand is more than a marketing slogan. It is a promise. And not just any promise; it’s a promise that people believe will be fulfilled. BMW promises that you will have fun driving their cars. The Ritz-Carlton promises that your stay with them will be perfect. Apple promises that it will be innovative. For the most part, we believe or trust these promises because consistently, over a long period of time, this is what we have experienced. When you see that i in front of Apple’s products or the Ritz’s regal lion logo, you immediately think “cool” or “special” because those companies have successfully married their brands with their promises. These companies didn’t develop world-class brands overnight. They worked hard to identify