What does your company manufacture?
Kennametal Inc. is a leading global supplier of tooling, engineered components and advanced materials that are consumed in production processes. We provide customers with a broad range of technologically advanced tools, tooling systems and engineering services. Our products use highly complex metallurgy and materials science in tungsten carbide powders, high-speed steels, ceramics, industrial diamond and other materials that are particularly resistant to heat, abrasion, pressure and wear.
To whom do you report?
Executive Vice President and Chief Financial Officer.
How many years have you worked in the profession?
I have been involved in real estate for over 15 years serving in various capacities including accounting, asset management, account management with a service provider, facility management, portfolio administration, property management and overall responsibility for corporate real estate.
Where and what did you study?
I earned a Bachelors of Science in Accounting from East Carolina University in Greenville, N.C. and a Masters Degree in International Business from Nova Southeastern University in Ft. Lauderdale, Fla.
Describe the most important transaction or project for which you were responsible.
One of our business units was experiencing double digit growth. The call center operations that support our customers were in two separate facilities. The main call center facility contained about 75 percent of the customer support representatives while the other 25 percent was housed in the headquarters facility which also accommodated our regional distribution operation as well as the corporate operations for the business unit. These facilities were at maximum capacity and had two years remaining on the existing leases. Both facilities were "tired" and expansion was not possible. To continue to grow the business, we had an urgent need to add to our customer support teams.
Working with one of our service providers, we uncovered a new facility. This new location was recently completed and was fully furnished. The previous tenant had only occupied the facility for six months before they were purchased by a third party. This location would allow us to combine all of our operations under one roof and would eliminate a significant capital expenditure that was only intended as a temporary fix for the business unit.
We successfully assigned the existing leases to our new landlord. We then in turn subleased from them the distribution center component. Included in the transaction was a significant rent abatement. Both the state and local economic development organizations stepped up with up to $4 million in tax credits to help us offset the cost of the consolidation. The consolidation also contemplated the combining of operations from other states into this new facility.
What is the biggest professional challenge you face on a regular basis?
I have found that business plans more than five years out are almost like throwing darts at a dartboard. In some industries I believe this window shortens to three years or less. This dilemma faces corporate real estate more so than other groups within the corporate organization as our investments are usually significant and the payback on the investment is long term.
How is the role of manager of real estate evolving?
At Kennametal, the role of corporate real estate is for the most part strategic in nature. Like many corporate real estate organizations, we are a very lean organization partnering with third-party service providers on an as-needed basis. We travel extensively for strategic rather than transactional purposes. We work very closely with the various leaders within Kennametal to align ourselves, as well as assisting them in their strategic plans. Once the real estate strategy is formulated, we engage the appropriate parties to execute the strategic plan.
Which technology do you consider to be essential in your professional life?
Our database is by far the most important tool in corporate real estate. It must be current and accurate. We regularly report to various members of our senior leadership team various real estate metrics. These metrics reflect our own internal performance measurements as well as how we measure up against similar type companies. In addition, if we miss a critical date, the ramifications could have significant impact on our business.
What is the value of IAMC membership to you?
We are constantly asked by our executive management team how we look in relationship to our peer companies as far as cost, efficiency, office space policies, etc. Membership in the IAMC offers us the opportunity to network and benchmark ourselves against other users as well as share ideas on best practices.
