Welltok: Looking at a Corporate Real Estate Project ‘Inside Out’

Welltok furnishings
Teknion’s Interpret Benching is shown here with Teknion’s DNA Modular Lounge, both being implemented in Welltok’s new space.

Words by Kimberly MacArthur Graham

Typically, the emphasis in a corporate real estate project is on the front end: the brokerage transaction and initial project scope. But a recent International Facility Management Association panel discussion, featuring the team behind complex deals including the Welltok corporate headquarters relocation, turned that notion on its head, suggesting that successful projects have much deeper roots.

Intrigued, Building Dialogue hosted a follow-on conversation with the same group of experts. In addition to planning early and re-evaluating often, they emphasize keeping the team’s collective sights focused on the long-term and, of course, selecting a qualified team you trust and like. Here they share the best tips, techniques and secrets from both forums.

The Experts:

Jeb Evans, Vice President of Real Estate, Facilities & Procurement – Welltok

Kindell Williams, Managing Director and Principal, LEED AP BD+C – IA Interior Architects

Joe Sigdestad, Principal – Avison Young

Megan Walsh, LEED AP BD+C, Principal – Catalyst Planning Group

QUESTION: What is the biggest advantage to having the team on board at a project’s start?

Jeb Evans

Jeb Evans (JE): From the owner’s point of view, it’s being inclusive. I get insight from the entire design team early on all aspects, like choosing the right site. It’s also helpful to have early intelligence from experts like attorneys. My goal is to make sure we’re designing a space that truly meets the needs of the business – which means it attracts and helps retain the employees we want.

kindell williams

KIndell Williams

Kindell Williams (KW): Understanding our client’s employee demographic is key; you want to make sure the building site and the surrounding area has the right amenities. Also, touring the site early allows the architect to give input on things you might not initially think about, like views, existing conditions that might need upgrades and how easily the program can be applied to the site. It’s not just making sure there’s enough space for various groups, but also the amount and quality of meeting spaces, acoustic issues, security issues, etc.

JE: Involving the owner’s facility manager early really helps in this regard since they know how the business runs day to day. For example: Is there a need for a loading dock or a freight elevator? What are the storage requirements? What about the flow of people and materials? Will traffic and noise be a concern with a given configuration?

joe sigdestad

Joe Sigdestad

Joe Sigdestad (JS): People tend to think of the lease as the end goal, but it’s really just a byproduct of the process. Involving the brokerage team early helps the client think longer term. What if you enter into long-term office lease, then there is a change in the business plan, a sale or acquisition that requires the space to be sublet or sold? Plus, in my business, timing and relationships are everything. If I can cut through the fluff and find out the real needs on both sides of a transaction, everybody comes out ahead.

KW: Relationships are key to the entire process; that’s why all of us are here.

JE: That’s right. Developing relationships and trust with the team speeds up the learning curve.

megan walsh

Megan Walsh

Megan Walsh (MW): On-boarding the team early can really impact project schedule. Ideally, you should have key stakeholders from all parties at the table at the outset of the project to address every aspect of the project’s life cycle. Getting the entire team’s perspective and integrating that team at Day One is imperative for a successful project and successful long-term operation after the project is completed.

QUESTION: What characteristics do you look for in a project team?

JE: I look for people – employees and consultants – who think of a portion of their role as customer service. I also look for insightfulness, the ability to listen to what people are really saying and understand what they want. Take my information and project it forward by offering me new ideas and advice. All these guys [the panelists] are my team. They are not my employees, but they are just as much my team. It’s important that there are no barriers; no “us” and “them.”

MW: We are an extension of the client, so having an inclusive process where the client treats the team as partners really helps – and building that relationship and trust factor is paramount. That is the core foundation that can reset a project’s mentality.

JE: Understanding the people who work with and for you is necessary to building a strong team. Sometimes people are talented, but not a good fit with the team. Know when to cut them loose and coach and grow the rest. Then make sure everyone knows their roles. We can overlap, step on toes or get offended, but to work together effectively, you have to understand one another.

KW: Communication is critical, and not making assumptions. Even teams that have worked together before should look closely at every project and discuss it; every owner and project has different goals.

QUESTION: What are the pros and cons of outsourcing?

JE: A third-party outsourcing arrangement can be extremely effective under the right circumstances. Recognize your company’s internal strengths and weaknesses and decide which services to outsource based on that. I do think most companies should get support for their real estate projects from external experts. Definitely think about your team prior to the project starting. If you wait too late to choose the right team, you’re bound to be dissatisfied with the results.

QUESTION: What is the biggest challenge in managing a facilities portfolio of real corporate estate assets? 

JE: Timely and accurate information. Many of my peers do not consider the length of time it takes to make a change to the real estate portfolio or the commitment the company makes when it signs a lease. Frequently, I find that information we are given is inaccurate and we lease either too much or too little space and are soon trying to make corrections.

MW: Having projects with varying geographies, like Welltok’s national portfolio, means managing markets that are very diverse – like Boston versus Denver. Each has its own nuances.

JE: You do have to be geographically nimble. We’re no longer geographically dependent. Bill Benton, the AY broker handling Welltok’s portfolio on a national basis, is located in a different city, but he works with us seamlessly.

JE: Inertia can be a problem. You might be in a great space now, but maybe it won’t be in two years. Jeff Margolis, Welltok CEO, is very forward-thinking. This project is big for a company of our size, at our stage of growth. It’s more than we need now, but making this move will avoid long-term disruption.

MW: So many people take a moment-in-time view, but you really need to think long-term.

JS: Right. We knew the Welltok site wasn’t right long-term and this solution worked out better in every way. But we had to be thinking beyond the immediate. It requires thinking, “Where do we want to be in three, five or 10 years?”

KW: You have to be good with the crystal ball! The best you can do is minimize risks and build flexibility into the space.

JE: Flexibility is key. What you believe your future holds is inevitably going to be wrong. Plan for that and build in enough flexibility to adjust as necessary

QUESTION: Which design trends are impacting facilities infrastructure?

KW: Office design is changing in many ways. Workstations are shrinking in size; most existing buildings were not designed to accommodate the heat load or outside air requirements of this denser workspace, and restroom quantities may not be sufficient. And you have the mobile worker, who wants to move around and work at a desk, a collaborative area or a focus room. This flexibility requires WiFi, laptops, headsets or software to roll calls over to cell phones, etc., meaning you have to have adequate cell coverage or negotiate adding in a booster. Workers also are more concerned about well-being; they want access to the outdoors, whether it’s a patio, balcony or operable windows. This can create challenges for the HVAC system.

JS: Also, increasing power requirements, parking requirements, tenants requesting additional retail amenities, accommodating flexible hours, etc.

KW: And not everybody works the same. Some work remotely, some are OK with benching and others are extremely distracted in an open environment like that. Some people use collision areas to catch up with co-workers and other’s IM you. Personalities play a big part in why we create different space types – you need places for introverts and extroverts.

JE: And everyone needs privacy and quiet at times, even if it’s just for a phone call.

KW: Yes, so it’s important to find out what works culturally and design to that.

QUESTION: How is the brokerage community offering more value during the lease and work letter negotiations?

JS: Teams are taking the time to whittle down the list of potential properties up-front. The more the brokerage team knows up-front – specific densities, power requirements, hours of operation, true parking requirements – the better we can draft initial RFPs. And we’re consulting with the FM early, since they will have to live with what is negotiated. The more involved they are in the initial process, the easier it will be for them to physically operate and manage the facility. Of course, we like to involve the architect and the rest of the team early to review all aspects of the property.

KW: Collectively, we often see or think of new things that may impact the terms of the lease.

JS: Spending the time up-front is what smoothes the project and gives great results. Otherwise, you might see the dream turn into a nightmare!

JE: Having confidence and trust in your team goes a long way. I don’t have to second-guess what anyone on my team is doing.

MW: You have to trust your fellow team members to make not just quick decisions, but smart decisions.

Featured in the June 2016 issue of Building Dialogue

Edited by Building Dialogue