For most of its history, CoreNet Global focused on asset management issues in corporate real estate. The emphasis has been on professional development through continuing education, certification and networking with the goal of helping members thrive in an increasingly global market. But to attain these goals, research took something of a back seat until last September when the organization hired Bruce Ellis, a former scientist at the Georgia Tech Research Institute.
As vice president of research, Ellis is heading up a new department within CoreNet called the Applied Research Center (ARC), which will develop a program of research activities. With a budget of $600,000 — twice that before his arrival — Ellis hopes to make CoreNet the go-to resource for real estate research. NREI talked with Ellis, who spent 10 years in the real estate industry before becoming a research scientist, about his plans for ARC and how it will affect CoreNet members.
NREI: You were hired as vice president of global research for CoreNet Global. It's a brand new position. Why was the position created and why now?
Ellis: My remit is to build a research organization that would meet the highest standards in any region in the world. We're hiring top-caliber MBAs, but it's also our research methodologies and being able to draw upon intelligent real estate practitioners with hard-gained experience. The timing was right. There's been a significant trend and demand from our membership to get more representation at the strategic planning table and even in the “C” suite.
NREI: What is ARC's research focus and how does it differ from efforts in the past?
Ellis: Real estate has strategic value, but not all corporations realize it right now. Our research focus will revolve around long-term trends such as outsourcing, cost reduction and consolidation, and how corporate real estate executives need to position their portfolios and careers to anticipate those trends.
NREI: How will your research activities be of practical value?
Ellis: Traditional benchmarking looks at relatively simple metrics such as cost per square foot per employee or revenue per square foot, say, in a manufacturing space. Rather than looking at cost or revenue per square foot, we'll look at more complex metrics surrounding trends such as outsourcing. The strategic driving factor behind outsourcing is reducing cost and, one would hope, increasing a focus on core competencies. A set of metrics could be developed that would show the impact of that shift on share price, or earnings or cost of goods sold. Companies could then use that to measure themselves against other participants in a similar industry.
NREI: What kind of research tools will you use?
Ellis: We'll be looking at case studies and surveys. But there are other methodologies that we may use that are more rigorous. Take something as simple as interviewing. We might do a broad cross section of interviews across industry sectors, which would be recorded, transcribed, analyzed, and run through software where codes are assigned to certain terms.
NREI: Who are your research partners?
Ellis: We're going after two distinct sets of research partners. One is the corporate end-user; the other is the service providers. These two groups will tackle research issues together under our guidance. These research partners will not only provide funding, but also provide expertise from within their organizations.