< Previous8 JULY 2021 S I T E S EL E C T I ON “The events of 1987 were over in a matter of minutes. But it took us years to recover. That sort of impact is something companies can easily underestimate.” And so, Brett Manning, senior VP of Global Corporate Services for Silent-Aire in Edmonton, Alberta, Canada, recalls the 1987 F4 tornado that ripped through Edmonton, packing top winds of 260 mph. Included in the estimated US$647 million in damages was the Silent-Aire global headquarters. “It wiped out the facility.” July 31 is still referred to as Black Friday by the Edmonton community. But Manning is a big believer in lessons learned, and as the provider of hyperscale cooling and modular data centers mounted a global growth initiative, leadership baked into those plans an increasingly robust disaster preparedness and recovery program. “The tornado shaped and molded how we guide our operations,” he states. “We know now what starting over is like.” It was an expensive lesson, and he says that, just like his shop, other IAMC members should tailor the lessons they’ve learned into a workable, bulletproof disaster recovery program. “To me, every company should have a robust continuity and resilience program,” he says. “And a big piece of that should look at potential locality risks in various markets, factoring those in and taking the necessary steps to minimize those risks.” Which, of course, shapes the site selection process. In 2013, the company expanded into the U.S., and in addition to the normal checklist (square footage, rental rates, availability of direct fl ights to Edmonton, etc.), “we also looked at potential risk factors for manufacturing facilities,” he says. The fi rm settled on Arizona (Manning is based in Gilbert). Extreme heat aside, the Grand Canyon State is fairly weather-neutral. The same approach was in place for Silent-Aire’s 2017 Ireland expansion. The problem for all corporates, unless the decision-makers keep resilience “top of mind,” (as Manning says), is short-term memory. For instance, back in 2016, when the UK voted to exit the European Union, “We didn’t really learn about the value of resilient supply chains then,” says Matt Whittaker, managing director of Property Services for Bis Henderson Consulting in Northampton, UK. “So, we didn’t prepare wisely. Then COVID came, and there were very few plans for maintaining inventory.” But having a risk-mitigation program in place is only half of the discussion. “Any plan is only as good as the frequency you refer to it,” Manning adds. Indeed. Disaster recovery plans need to be living documents, shared with all stakeholders and updated as glitches and improvements are uncovered. The Silent-Aire plan is reviewed by the executive committee annually and road- tested quarterly. “That allows us to prioritize how best to mitigate those risks. It’s a continuous improvement process.” COVID and a Canal It’s no exaggeration to say that every company around the globe was caught off guard in February of 2020 when COVID-19 swept the world. So now the question becomes, how prepared are we for the inevitable “next time”? The answer to that question can be measured by the availability of product on your local store shelves. As Whittaker indicates, supply chains were clearly starved in the fi rst weeks of the pandemic, just as they were strangled when the 1,312-foot Ever Given cargo ship ran aground and blocked traffi c in the Suez Canal for six days in March. It’s estimated that $9 billion worth of product slides through the canal daily — some 12% of the global supply chain. Recovery from that event is expected to take months to fi x. Rely on Lessons Learned for a Robust Disaster Recovery Plan Every company should have a robust continuity and resilience program, and a big piece of that should look at potential locality risks in various markets.” — Brett Manning, Silent-Aire still referred to as Black Friday by the Edmonton community. Every company should have a still referred to as Black Friday by the Edmonton community. Every company should have a by John Salustri10 JULY 2021 S I T E S EL E C T I O N “A lean supply chain makes practical sense when it’s business as usual,” says Whittaker. “Then COVID or the canal comes along, and what’s the fi rst thing impacted?” Lean supply chains, often done in the name of effi cient procurement, can actually be code for saving money, he says, and he “prophesies against that. I think we’ve gone too far down the route of commoditizing the supply chain to lowest possible costs. The result is supply chains that aren’t resilient.” Here too, a robust and forward- thinking emergency prep plan is key. “The challenge is to put value back into the supply chain,” says Whittaker, who explains that, while the UK is somewhat immune from natural disasters, be they earthquakes or tornadoes, no one can escape the impact of what he calls “seismic events, like COVID or the canal blockage. Such events provide the opportunity to redefi ne that value for greater robustness … but the consumer will have to bear some of that cost.” Adventures in Disaster Mitigation Forewarned is forearmed when it comes to natural disasters, and while pandemics and sideways container ships can’t be predicted, a living resilience plan can go far toward hastening recovery. “Delivering affordable, reliable power is job one,” says Jeremy Sowders, Economic Development manager for Hoosier Energy, the power generation and transmission cooperative headquartered in Bloomington, Indiana. “However, we’re also in the disaster recovery business. It’s critical for Hoosier to remain online to help clients — residential and commercial alike — when they are not.” The provider’s job can be made a lot easier by companies that know what they need, another result of planning ahead. “When we work with companies building new facilities, they may have specifi c critical functions for their business and ask for additional buildout in their electrical infrastructure.” Armed with that information, the utility can identify those critical needs upfront and plan ahead to provide redundant power, “including dual service through multiple substations and switches.” Silent-Aire’s Brett Manning hesitates to suggest what any other company might need to create a thorough disaster plan, since every fi rm is different “in scale and scope. Nevertheless, preparation applies to everyone, in every situation. Think about your business, the potential risks and steps you can take to mitigate that risk.” That said, he does suggest some essentials. “We looked at risk mitigation from three perspectives,” he explains. “First is our people.” Here he lists emergency communications and methods for ensuring all staff members are accounted for. “Next is our physical plants.” This is a sort of triage to gauge the operational status of each facility and its ability to get back online. Here it should be noted that all Silent-Aire operations are stocked with the same equipment globally, so any facility can back up another in an emergency. “Finally, it’s about processes,” Manning says. This is a longer-range consideration that (once again) falls under the heading of lessons learned. “Are there changes we can make that will mitigate any risk to the fi rst two?” Sowders agrees, especially as it pertains to communications. Before disaster strikes, always make sure the local authorities “have the most up- to-date information on who to contact and how best to reach us [to ensure] we can connect when time is ticking.” And keep those names updated. There should never be on your list names of people who left the fi rm two years ago. He adds that Hoosier, like most utility operations these days, has a “sophisticated system that can detect outages. But a quick phone call can confi rm what we already know. Seconds can save hours of downtime for our customers.” Ultimately, it falls to the individual company, its executive team and staffers down the line to build a thorough, robust and resilient disaster planning and recovery program — and to keep it updated with new lessons learned. As Brett Manning points out, there’s no set formula, given the varying and diverse needs of the company. But there is one universal truth that should drive every initiative in disaster planning, as Matt Whittaker states: “Hope,” he says, “is not a strategy.” A lean supply chain makes practical sense when it’s business as usual. en COVID or the [Suez] canal comes along, and what’s the rst thing impacted?” — Matt Whittaker, Bis Henderson Consulting A lean supply chain A lean supply chain Jeremy Sowders12 JULY 2021 S I T E S EL E C T I O N Future Focused e Industrial Asset Management Council is approaching its 20th anniversary in 2022. But this is no time to look back. In keeping with the theme of the upcoming IAMC Fall Professional Forum in Kansas City, Missouri, October - , I recently convened a group of IAMC Active corporate members to think about the future of industrial real estate. Joining me were: • Jim Eckert , Director of Corporate Real Estate for the Global Real Estate Solutions team at Owens Corning, headquartered in Toledo, Ohio; • Michael G. Connors , Senior Vice President of Real Estate at CORT, A Berkshire Hathaway Company, based in Chantilly, Virginia; • Scott Cameron , Global Real Estate Manager for Sonoco, based in Hartsville, South Carolina (near Florence). A series of IAMC white papers focused on how future facilities will be more “ ex.” Are companies incorporating exibility into their portfolios? “When we’re looking for warehouses, we’ll sometimes want to put in a showroom where customers can shop our furniture rental solutions, or a furniture outlet where we can sell our previously leased furniture on site, so we look for zoning that permits more than one use,” says Connors, “and a property that may lend itself to redevelopment for adding a showroom that may be open to the public in the future. One example is a facility we had in Texas which was opened up initially as a warehouse only, and we ended up later creating a rental showroom and furniture outlet, and now it may have a call center added, which the zoning allows for.” “When I think of ex facilities, I think of o ce, and some of the exibility we’ll have in the future going forward with people working from away,” says Eckert, though o cing is a small part of operations. “Many of our manufacturing sites are very heavy industrial sites. We’ve worked toward making these less single-purpose in character than they have been historically. It’s a big challenge for us. How do we build a single-purpose facility in a way that it can be repurposed for reuse later and for exibility of reuse and exit? e other part of our portfolio is warehousing and logistics. We’re really careful when we locate facilities and do build-to- suits in that we want exibility, and want to have a clear exit strategy — because strategy changes — so they can be made into ex manufacturing spaces or repurposed for other logistics operations.” Sonoco too is invested in long-term manufacturing sites. “Where we look for exibility is on the agreement side,” Cameron says. Since many facilities are closely tied to one or two customers, “we try to tie the terms to the length of our contract with the customer, or we negotiate a break clause based on whether the customer renews the agreement. We haven’t had that problem, luckily. Also, if we’re going onto a new site, we always like to look for a property with room to expand, or if a building is next to it, we get rst right of refusal on that property. We don’t tend to repurpose a site, but to stay there forever.” e topic of what to do with shopping malls comes up, and sparks more general observations. “We as a country have had the luxury over so many years and decades of having so much space to work with and resources to build with that we have not done a really good job of planning our assets well, from construction and location to infrastructure used to support it,” Eckert says, noting how fast e-commerce is eating up warehouse space and leaving manufacturers in the lurch location-wise. e challenge for cities and municipalities is to set the stage for long-term sustainable development. “If we continue to operate on an ad hoc basis, based on what we need today by ADAM BRUNS adam.bruns@siteselection.com IAMC SPO TLIGHT S I T E S E L E C T I O N JULY 2021 13 and not what we will need in the future, we’ll end up with facilities that will not serve us for a long time.” Life-Cycle Thinking e discussion then turns naturally to how corporate sustainability and social responsibility goals are in uencing these leaders’ work. In addition to partnering with landlords on LED lighting upgrades and replacing tired HVAC units, thus reducing energy consumption, Connors points out that CORT’s business model is very sustainable by nature. “We invest in durable products manufactured to our high-quality standards and expertly maintain the pieces throughout their rental life,” he says. “We rent our products anywhere from two to six times for a total of three to four years on average. At the end of their rental life our furniture is delivered to a CORT Furniture Outlet to be sold to its forever home.” “Sonoco is trying to reduce greenhouse gas emissions,” says Cameron. Sonoco is working on a project right now to convert a former industrial property the company purchased into a large solar installation. “We’re also looking at all of our larger facilities across the United States and globally where we have excess property or large at roofs to install solar. Sonoco is also a large recycler: Our industrial division uses a lot of paper, and most of what we use we make. e majority of the paper we use is recycled.” ere is one last aspect that has more to do with Sonoco Products: “ e world throws away so much food,” Cameron says. “Sonoco is working to improve packaging so food can last a bit longer.” In Owens Corning’s case, “We provide not only the berglass, but technology associated with the wind blades themselves, to help make them more e cient, bigger, longer and faster,” Eckert said. Making buildings and roofs more durable and vehicles lighter are Owens Corning goals, as is increasing the use of recyclable and renewable materials and improving product design for reuse. “We’re collaborating with suppliers to increase transparency around materials we use,” he says. “ e concept of a circular economy has become prevalent in our conversation — everything is just continually put to use and recycled.” In addition to doubling the positive impact of the company’s products, Owens Corning aims to halve the negative impact of its operations, and advance workforce inclusion. “Our aspirations also include keeping people safe, improving quality of life of employees and improving communities,” said Eckert. Improving that quality of life can help talent recruitment and retention, our nal discussion topic. “Talent is a very big piece of our relocation strategy,” said Eckert. ere is an increasing need for technical talent, as operating and maintenance of equipment and the IT aspects of operations require a di erent level of expertise. “When I’m doing site selection and talk with communities about base requirements in terms of wage level, we’re usually well above that. It’s a big part of what we do — making sure the talent tis there, the ability to train that talent is there, and that there are schools that will continue to replenish that.” “If you ask any CEO what the most important assets in the business are, he’s going to say people,” says Connors. “Right now, it’s challenging to recruit and keep good people. And real estate can help with the types of facilities it creates for their associates to work in. So, I think our jobs have become more important, not only from the accounting perspective, due to the new accounting standards that companies must adhere to, but by ensuring the facilities, their locations, the technology and amenities provided are rst class, so when a prospective employee comes through the door, they have a favorable rst impression. It’s critical that CEOs recognize if I don’t have a good real estate team, that puts me in second place (or worse) when recruiting against my competitors.” Owens Corning’s headquarters in Toledo, Ohio, shown in this archive photo, earned its LEED certifi cation a decade ago, part of an all-encompassing sustainability outlook that’s still evolving. Photo courtesy of Owens Corning14 JULY 2021 S I T E S EL E C T I O N NOR TH AMERICAN REPOR T S Injecting Life into Manhattan Commercial Leases Amid widespread concerns of an on-going swoon in New York City’s broader commercial real estate market, life sciences leases are growing at a record pace, according to a June 1 report by CBRE. After a remarkable 2020 that witnessed steep declines elsewhere but 65% growth within the life sciences sector, NYC’s lab leasing activity already has reached a record high for a single year, at 257,000 sq. ft. (23,880 sq. m.) through May 2021. “This year’s leasing activity has been bolstered by the Icahn School of Medicine at Mount Sinai’s 165,000-sq.-ft. [15,330-sq.-m.] research-focused lease at 787 Eleventh Avenue and C16 Biosciences’ 19,000-sq.-ft. [1,765-sq.-m.] lease at the Hudson Research Center, where the Bill Gates-backed startup will relocate from its incubator space at BioLabs New York,” reported CBRE. Source: Lafargeholcim Foundation for Sustainable Construction by GARY DAUGHTERS gary.daughters@siteselection.com Rebuilding from the Rubble Unmaking Architecture, New York — an AI-based tool to optimize re-use of demolition rubble — earned top recognition among recipients of the Next Generation Prizes-North America, awarded by the Switzerland-based Lafargeholcim Foundation for Sustainable Construction. “Starting from an indexed library of demolition rubble, a computational tool is able to guide the design of new buildings in order to optimize available materials. The entire library,” the citation explained, “can be matched like jigsaw puzzle pieces onto adjustable shapes, producing signifi cant money savings as well as a reduced carbon footprint for building construction.” The project is the work of Daniel Marshall, a Brooklyn-based façade consultant and former teaching fellow at MIT. Source: CBRE Sq. F t. in T housands 250 200 150 100 50 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 2021 182.4 151.9 17.9 12.9 74.1 4.4 60.7 72.4 155.9 257.4 38.0 S I T E S E L E C T I O N JULY 2021 15 Source: Dominion Energy O shore Wind Gains Traction The Biden Administration moved on multiple fronts to advance its goal of generating 30GW of o shore wind power by 2030. On June 8, the Interior Department announced its intent to assess potential opportunities for clean energy development on the Gulf of Mexico Outer Continental Shelf. A Request of Interest to assess interest in potential wind development is focused on areas o the coasts of Louisiana, Texas, Mississippi and Alabama. On June 11, the administration announced its fi rst proposed o shore wind lease, encompassing an area between Long Island and the New Jersey Coast called the New York Bight. On June 14, Virginia Gov. Ralph Northam announced that wind energy projects o Virginia and North Carolina (see “O shore Wind is Blowing Up,” Site Selection, May 2021) will be accelerated under a streamlined permitting process adopted by the Bureau of O shore Energy Management. “I never thought I’d see the day when Texas took the same path California took decades ago when lawmakers took manufacturing jobs for granted and hurt their economy.” — Tony Bennett, president and CEO of the Texas Association of Manufacturers, on the legislative death of Texas’ popular Chapter 313 manufacturing incentive Kansas City Southern Chooses a Suitor On May 21, Kansas City Southern o cially ditched a deal reached with Canadian Pacifi c Railway and announced a ground-breaking merger with Canadian National Railway to create the fi rst freight-rail network linking the U.S., Mexico and Canada. The new rail network is to connect ports in the three countries with the expectation of leveraging the U.S.-Mexico-Canada Agreement on trade that rolled out in 2020. Kansas City Southern assessed the roughly $30 billion deal with Canadian National as superior to an agreement reached in March with Canadian Pacifi c. Earlier in May, Canadian National announced an order for 1,000 high-capacity grain hopper cars to be built in Mexico.INVES TMENT PROFILE: COLORADO Your Genuine Self: Companies and Individuals Alike Fulfill Their Potential in Colorado Scroll through the 175 major corporate facility projects Site Selection has tracked in Colorado over the past three years and one trend emerges above others: Tech firms like what they see in the state. The talented individuals those companies crave like what they see there too — the state’s population grew by 14.8% (744,518 new residents) between 2010 and 2020 to 5.77 million. That’s the sixth-strongest surge in the nation. More are on the way. Recent studies by U-Haul and Linkedin found that Colorado was among the top states and Denver and Colorado Springs were among the top cities for in-migration during the pandemic. Colorado’s State Demography Office forecasts that Colorado’s population will exceed 8 million by 2050. From 2010 through 2019, Colorado averaged 50,000 net in-migrants per year — equivalent to the number of advanced college graduates the state produces annually. “We have a really strong in- migration, which creates this confluence of ideas and thoughts,” says Michelle Hadwiger, Director of Global Business Development at the Colorado Office of Economic Development & International Trade (OEDIT) “It’s created an environment where people are more collaborative." On the tech side, it’s so active in Colorado that a new tech company is born every 72 hours. “It has a lot to do with the density of talent in Colorado — we have the second highest educated workforce in the country," Hadwiger says. "We’re a knowledge-based economy, so it makes a lot of sense to be over-indexed in advanced technologies, and people can work where they want to live now." The run of investors includes a healthy share of foreign firms, lured in part by an open and neutral culture that makes it easier for people from all over the world to transition. The ease of international travel from Denver International Airport helps too. “It’s the 10th biggest airport in the world, and an exceptional economic driver for the state,” Hadwiger says. “And unlike other major airports, it has the ability to expand. We built ours in the middle of nowhere, and that’s working to our advantage.” Even when you’re not flying, your company’s business is: The state’s Mountain Time zone means same- day communication and project collaboration can be done with colleagues in both Europe and Asia. ‘Really Cool’ is Really Attractive Hadwiger says company leaders charged with location decisions always talk to other executives, who tell them when they interview talent about relocating to Colorado, they always accept. Anecdotal evidence by ADAM BRUNS adam.bruns@siteselection.com Colorado’s authentic natural beauty and a healthy lifestyle outlook set the stage for authentic relationships and opportunity. Aspens near Meeker by Gaylon Wampler Photography, courtesy of VisitCOS.com 16 JULY 2021 S I T E S EL E C T I O N S I T E S E L E C T I O N JULY 2021 17 This Investment Profile was prepared under the auspices of the Colorado Office of Economic Development & International Trade. For more information, visit oedit.colorado.gov. corroborates this claim: The Molson Coors relocation from Denver to Chicago saw low acceptance rates of relocation packages, while the Google Boulder Campus is one of the most highly sought in the country by employees. “People are coming here from the coasts,” says Emilie Kintner, an education technology leader from Boulder who just signed on with AMP Robotics last year as the company’s new head of talent and culture. “It’s a nice central hub, it’s beautiful, and the standard of living is still relatively affordable compared to other locations in the country.” AMP deploys AI, sensors and robotics to cull valuable materials from waste streams and capture some of the $11.4 billion in recyclables lost to U.S. landfills annually. The company employs around 150 and is hiring for nearly 40 positions globally, 35 of them at its sites in Denver, Louisville and Broomfield, Colorado. Founded in Boulder by CEO Matanya Horowitz, AMP’s fortunes have been boosted by successful venture capital raises, as well as support from OEDIT in the form of early-stage, export and other grants, some of which assisted AMP with the cost of international business development, "which laid the foundations for our current growth in Canada, the United Kingdom and Western Europe,” says AMP senior marketing and communications manager Carling Spelhaug, a transplant from Chicago. The company’s mission is attractive to aspiring engineers, environmentalists and technologists. One recent hire, Manager of Talent Acquisition Melissa Evans, recently posted on LinkedIn, “Not only are we connected through our company mission of enabling a world without waste, but we are connected through bringing our genuine selves to work.” Plus, says Kintner, “How can you not think AI and robots and recycling are really cool?” The snappy names associated with really cool companies pepper the long list of recent investors — DataDog, Strive Health, Wix.com, FileInvite, Strava, Quizlet, Facebook, Marqeta, Gusto, Zenpayroll, Booyah, Cipher Skin, Nextworld and yes, Amazon, among others. Moreover, their niches in cybersecurity, fintech and AI complement the state’s typically strong aerospace, engineering and life sciences clusters. Does the cluster effect work to everyone's advantage? “Absolutely,” says Kintner, noting that the surge in tech startups in the state began when the national Techstars organization launched its very first incubator in Boulder in 2006. By 2014, she says, Colorado was getting sticky for startups and multinationals alike. “It's a great place to hub out of,” Kintner says. “While there are instances where we are competing with other organizations, it’s like a flywheel that got going and it's not slowing down.” Balance Pose Work-life balance is already a Colorado calling card. But how do you balance the fast and loose startup spirit with high-altitude corporate professionalism? The state hits the right note there too. Kintner describes AMP as “fun, collaborative and communal but with a high level of professionalism you’d find with a company five times our size.” Meanwhile, multinationals flocking to the state are living out their sustainability and ESG missions, coloring in high-minded policies with real-world dimensions that apply to whole communities as well as whole people. OEDIT’s Michelle Hadwiger knows about balance. She led the process of blending the state’s international trade and business development divisions. The OEDIT mindset is not siloed, but global and informed by data. With more than 30 federally funded laboratories in the state and growing partnerships between large and small businesses, the corporate- startup web of relationships only continues to deepen. "The spirit of Colorado is different than other markets," Hadwiger says. "It’s a known thing. There is something special about the collaboration in Colorado that you don’t get in those cutthroat states on the coasts.” Hadwiger at one time ran the Colorado Innovation Network (COIN). Today that network no longer exists. What went wrong? Absolutely nothing. It fulfilled its catalytic purpose. A true ecosystem had evolved, known simply as Colorado. Emilie Kintner, Head of Talent and Culture, AMP Robotics Michelle Hadwiger, OEDIT Director of Global Business DevelopmentNext >