As my term as IAMC chair concludes at the Indianapolis Forum, I want you to know I’ve enjoyed this opportunity to serve you and to make a difference for this organization, which I love.
IAMC has notched some impressive accomplishments since I’ve been chair, such as the London Forum, steady membership growth, new strategic plans for education and marketing, and improved programming for Local events. I’m proud of these. However, I’d like to point out several less dramatic, but possibly more important, changes.
Most broadly, I see an advancing awareness among members that IAMC is a close-knit community of professionals with access to a rich repertoire of benefits and services provided through various platforms. Only five years ago, most members viewed IAMC as primarily the Professional Forums. The change toward a broader perspective is not yet complete, but we see it happening.
Back then, being Forum-centric was a good thing and served the needs of the times. The Forums were our primary product, revenue source and delivery vehicle for member services. But in 2016 and moving forward, our products, funding sources and delivery methods need to evolve as the member expectations and corporate cultures continue to shift. Further, the incoming generation of end-users want IAMC services via Web, iPad and smartphone in addition to the Forums. We’ll have to accommodate them.
In the future, IAMC will continue to be member-centric. The quality of the membership is high, and it’s going to get even better. The top selling point to potential members remains the composition, quality and breadth of experience. But we will supplement this by extending the geographic coverage of the membership and conducting Forums and Local events in Asia, Europe, Latin America and North America. Further, the membership will also be comprehensively served and knit together via online capabilities such as Webinars, podcasts, Web-delivered video education modules and social networks, among others.
I know this is a glossy image, and it may seem to be a long distance from where we are today. But online service delivery is how most professional associations are already planning to provide a proportion of their services. This capability will stand us in good stead, in particular with our younger incoming members. Rest assured, however, that we will steadfastly hold to one of our core values, which is that relationships come first.
I want to give a confident vote of support and thanks to those working quite effectively to lead us into the future. IAMC has a strong core of leaders, including the board, committee chairs and staff.
For my part, when my term as IAMC chair is up in October, I plan to stay fully engaged. I too am looking to the future, and I like what I see. Thank you for your support. It has been an honor and privilege to serve this great organization and its members.Samantha Turner
This article is excerpted from a Mar. 13, 2016, IAMC New Orleans Professional Forum Distribution Industry Group program. This was moderated by Michael Landsburg, Vice President of Real Estate, NFI Industries. Prologis sponsored the session.
When it comes to broker relationships and key performance indicators (KPIs), one size doesn’t fit all. Some companies use a single brokerage firm nationwide, while others cultivate relationships with different brokers in different markets. In general, KPIs are developed and used to align corporate real estate’s (CRE’s) activities with the corporate strategy. However, some corporate real estate teams have abandoned formal metrics because their work is highly transactional or no one in the company cares about monitoring broker-service KPIs.
Although real estate market information is more accessible than ever before, many companies feel brokers add value through their deep knowledge of specific landlords, creative financing options, and additional services, such as software management and project construction management. Once organizations develop a strong relationship with a brokerage firm, they are often reluctant to even consider bids from competing brokers.
Aligning service provider efforts with corporate strategies can be challenging.
In many companies, the C-suite barely understands what corporate real estate people do. For example, senior managers may establish corporate objectives to drive rent down when the market simply won’t allow it. To provide broader context to company leaders, one attendee said the real estate and finance teams jointly developed a KPI, which is occupancy cost as a percentage of total sales. This illustrates whether the company is driving total occupancy costs down, and not just rents.
Some organizations view KPIs as outmoded or unnecessary.
One participant noted that he doesn’t use KPIs anymore because he was the only one in the organization who cared about them. It was a lot of work to fill out surveys about things like options, stepped-up holdover clauses, reduced operating expense language and more.
Another noted that KPIs and strategy aren’t what people thought they were five years ago. The speed of business makes corporate real estate teams act in reactionary ways, rather than responding to long-term strategies. One participant said his company is focused on the new president’s objectives for 2016. As a result, the CRE team’s activity is composed of transactional one-offs as they divest brick-and-mortar locations and replace smaller distribution centers with big-box facilities to support e-commerce and logistics.
Although market intelligence is now more accessible thanks to technology, brokers add value for companies in other ways.
Since the Internet makes information so transparent, brokers are no longer needed to gather real estate market intelligence. Companies now pay brokers for relationships with landlords and other value-added services.
One attendee said his department expects its brokers to educate them about landlords in the market, including the landlords’ capability to make improvements, who manages the properties, how expenses are managed, and what the landlords’ long-term objectives are. During the economic downturn, some of the good brokers came to the company to discuss blend-and-extend options. This was good input, and in some cases the company pursued this path.
Companies often fee-share with their service providers.
Among the attendees’ companies, most fee-share with service providers. One company’s brokerage firm pays 100 percent of legal fees related to real estate, and they handle all project construction management. Another attendee’s company fee-shares on a case-by-case basis on the international side. In this case, the service provider keeps a balance sheet, but money doesn’t move between countries. This eliminates tax issues that arise when funds come in from international locations. One participant’s company also does fee-sharing, but the percentage varies on the front end.
Several other participants also engage in fee-sharing. Two firms never take cash back, and instead use the proceeds to fund other services or consulting engagements for the brokerage company. Another participant noted that while they fee-share for many transactions, they don’t discount for dispositions because they want brokers to be incented.