In one of the discussion sessions we ranked the top current CRE value drivers. You probably will not be surprised at which issues rose to the top of the list.
Financial performance: Always a focus but especially so in tough economic times. A couple of the attendees operate large portfolios for banking companies - think they’re focused on the bottom line these days? The summary statement on this one is that the dollar rules and as much hype as all other initiatives may get, the financials will always rule the day.
Attracting and retaining talent: Eighty million Boomers departing the workforce to be replaced by 30 million younger workers creates a big problem, one that is already being felt. While many Boomers will have to work well beyond normal retirement age the problem is still huge. Discussion about what is important to younger workers not surprisingly centered around quality of life issues. Alternative Workplace Strategies, improved workplace amenities, changing workplace standards, and corporate responsibility are all viewed as key strategies to attract and retain the new generation of workers..
Sustainability and Corporate Social Responsibility: Green is here to stay, and it is here to stay primarily because it makes good business sense. There was a passionate discussion about the true cost of building Green, and not everyone believes that it is a cost-neutral proposition. However, a number of participants outlined strategies to assure cost control on Green projects. They included setting a Guaranteed Maximum Price including Green requirements, conducting rigorous Value Engineering reviews, and engaging project participants (including contractors, commissioning agent, and LEED consultant) early in the project before Schematic Design begins. It is also important to evaluate the project on a Total Cost of Ownership basis using life cycle valuation vs. first cost only comparisons. While Green is now understood to be good business from a financial perspective, it is also closely linked to social responsibility, which is becoming more important to market acceptance and recruiting.
Globalization and emerging markets: There was much talk about offshore projects and examples of how wealth is shifting out of the