1. Better by design:
Reshaping the CRE
function for greater
impact
“A greater focus on strategy has helped CRE get closer to the core
business, and communicate the value proposition of real estate more
effectively”
Mike Napier, Executive Vice President, Real Estate, Business Service Centres and Corporate Travel, Royal Dutch Shell plc

2. 2 Advance • Better by design: Reshaping the CRE function for greater impact • April 2011
Introduction
Today’s Corporate Real Estate (CRE) executive is being challenged
to support an increasingly complex array of corporate initiatives.
These can include global expansion or contraction, sustainability,
winning the war for talent, speed to market, cost reduction or
avoidance, and enhancing operational efficiency.
Faced with such a range of complex and important demands,
engineering an optimal team structure is crucial to achieving best in
class performance. In addition to enhancing performance, a leaner,
more effective team structure can improve business alignment and
reduce cost – demonstrating the full value of the CRE function to the
wider business. Most importantly, the onus is being put on CRE
teams, by their core businesses, to adapt their skills to meet these
changing requirements and demands.
The prospect of adding value through the re-focusing of the CRE
structure is alluring. But how is it best achieved? In response to
questions from a range of clients on this issue – across geographies
and sectors – this paper explores some of the organisational and
operational models which shape a best in class CRE team.
Towards a strategic future
There is already a clear evolution underway, driven by dynamic
macroeconomic conditions, continued globalisation; and a growing
realisation among corporate leaders of the value that can be
delivered by an effective and focused CRE function. This evolution
will ultimately be characterised in a range of ways. But one thing is
clear; best in class CRE teams will be leaner, more strategic and
focused on internal stakeholders, working alongside the wider
business as influencers and leaders of change. This evolution is
likely to require a fundamental reassessment of team structure,
roles and skills.
Choosing the right model
Designing the right CRE model has to take a range of factors into
account, as each organisation operates in very different ways. But in
each case there are common factors which need to be addressed.
Alignment with the core business is the most fundamental of these,
as without this the structure cannot be truly effective. In addition to
this core concern, the size of the team and the skills required of it
depend on a range of key factors outlined below:
• The objectives and targets set by the board / leadership
• The complexity of the real estate portfolio in terms of property and
ownership types
• The existing mandate and remit of the real estate team; which is
particularly crucial as a clear remit and control will strengthen the
process
• The composition of the core business; i.e. number of business
units
• The manner and frequency that the real estate function intends to
interact with the business
• The number of stakeholders and their input into real estate
decisions
• The mandate and remit of any outsource partner; also critical as it
directly impacts the resourcing and focus of the internal team
• The level of management of the partner contract
Only once these factors have been assessed and clarified, can
examination of the most appropriate organisational model begin. In
the remainder of this paper we examine the 4 key organisational
models available, outlining some of the pros and cons of each
before highlighting some recent case studies which give practical
insights into some of the challenges and successes encountered in
implementation.
Figure 1: Towards a strategic future?
Typical Time Potential Value Typical Time Potential Value
Planning
Operations
Strategy
& Relationship
Management
Planning
Operations
Strategy & Relationship Management
50%
25%
25%
70%
25%
5%
50%
25%
25%
25%
70%
5%
Typical Time Potential Value Typical Time Potential Value
Planning
Operations
Strategy
& Relationship
Management
Planning
Operations
Strategy
& Relationship
Management
Planning
Operations
Strategy & Relationship Management
Planning
Operations
Strategy & Relationship Management
50%
25%
25%
70%
25%
5%
50%50%
25%25%
25%25%
70%70%
25%25%
5%5%
50%
25%
25%
25%
70%
5% 50%50%
25%25%
25%25%
25%25%
70%70%
5%5%

3. Advance • Better by design: Reshaping the CRE function for greater impact • April 2011 3
CRE models: the options
A successful CRE team structure can be delivered through a number of
platforms, with the varying size and structure of businesses leading to a
range of hybrids. There are, however, essentially four main models. These
four models share a number of common traits including the need to report
into a single CRE and senior business lead; and the need to establish a
balance between in-house and outsourced activities, for example. But a
number of important differences also exist between the models. These are
explored below alongside some pros and cons.
Option 1 - Functional
A functional business model is a traditional CRE model that promotes
autonomy based on real estate function, with each function or ‘silo’
reporting up to the global lead.
Organisational Structures - Functional
Planning Transactions
Facility
Management
Design &
Construction
CRE Lead
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
HR
IT
Finance, Legal etc
Planning Transactions
Facility
Management
Design &
Construction
CRE Lead
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
HR
IT
Finance, Legal etc
Pros Cons
Simple structure Less focused on business units /
structure
Clearly understood Potentially slower speed to
market
Fits standard CRE skill sets Risk of gaps between silos
Brings good subject matter
expertise
Potential issues with business
engagement
Ease of implementation Potentially inflexible staffing
model
Option 2 - Geographic
A geographic model allows the global lead to have overall control of the
real estate functions with regional executives liaising with the local
business units and service provider representatives on the ground. This is
essentially an extension of the functional model geographically.
Organisational Structures – Geographic
CRE Lead
HR
IT
Finance, Legal etc.
Region B Region CRegion A
Design &
Construction
HR
Facility
Management
TransactionsPlanning
Design &
Construction
Facility
Management
TransactionsPlanning
Design &
Construction
Facility
Management
TransactionsPlanning
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
CRE Lead
HR
IT
Finance, Legal etc.
Region B Region CRegion A
Design &
Construction
HR
Facility
Management
TransactionsTransactionsPlanningPlanning
Design &
Construction
Facility
Management
TransactionsTransactionsPlanningPlanning
Design &
Construction
Facility
Management
TransactionsTransactionsPlanningPlanning
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
Pros Cons
Strong local portfolio
Knowledge
Labour and management
intensive
Effective for decentralised
business models
Added complexity
Aligns well with country led
business structure
Potential issues with alignment
to related functions
Brings subject matter
expertise
Risk of gaps between silos
Fits standard CRE skill sets Less focused on business units
/ structure
Proactivity may be limited

4. 4 Advance • Better by design: Reshaping the CRE function for greater impact • April 2011
Option 3 - Process
This model involves structuring the real estate team and functions around
the process of real estate delivery; matching each activity to the life cycle
of real estate. The structure encompasses transaction management,
portfolio administration, facilities management and project management
within ‘delivery’ and ‘transformation’ processes. Executives accountable
for each process then report up to the CRE lead.
Organisational Structures - Process
Workplace
Delivery
Process
Workplace
Transformation
Process
CRE Lead
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
HR
IT
Finance, Legal etc
Workplace
Delivery
Process
Workplace
Transformation
Process
CRE Lead
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
HR
IT
Finance, Legal etc
Pros Cons
Mirrors real estate lifecycle Cultural / functional resistance
Less siloed approach Challenging to existing skill set
Enables consistent delivery Risk of shadow organisation
Integration allows greater
speed to market
Requires a broad mandate
Can facilitate easier access
to best practice
Design, set-up and process can
be complex
Can reduce project cycle
time
Can be difficult to articulate to
internal and external audience
Option 4 – Market/Customer
A market customer model works by assigning relationship managers to
key business units who then report back to the CRE lead. The model
operates on a supply and demand basis with relationship managers
managing business demand; while portfolio managers and subject matter
experts manage the supply side. Each business unit manages a range of
strategic and tactical services on behalf of the business unit.
Organisational Structures – Market / Customer
CRE Lead
HR
IT
Finance, Legal etc.
CRE Infrastructure
Information Management
Performance Management
Administration
Reporting
HR
Subject Matter
Experts
Supply-side
Portfolio
Managers
Relationship
Manager
Business Unit C
Relationship
Manager
Business Unit B
Relationship
Manager
Business Unit A
Pros Cons
Complete alignment with
business
Requires trust of business
Adaptable / flexible Complex structure
Integration allows greater
speed to market
Challenging to existing skill set
Scalable Potential for “siloed” service
delivery by business line

5. Advance • Better by design: Reshaping the CRE function for greater impact • April 2011 5
High Performing Real Estate teams – Case Studies
The journey towards a best in class CRE structure is a progressive one. Indeed the ability to plan over time can help reduce conflict and helps the
business digest change gradually. The following case studies look at a range of real client experiences and some of the challenges and successes
encountered along the way:
Case Study 1: Shell
“A greater focus on strategy has helped CRE get closer to the core business, and communicate the value
proposition of real estate more effectively”
Background
Shell has around 20,000 properties worldwide, ranging from commercial, industrial and residential to assets including hospitals, schools and sports
clubs! Their office portfolio exceeds 2 million sq m.
The redesign of Shell’s CRE team was part of a broader ‘root and branch review’ of the Shell operating model. As part of this wider process, the CRE
reorganisation was launched in Q4 2008, taking under a year to implement, after a 2 year period analysing the model. Throughout the broader
reorganisation, CRE design was deliberately left to last, with third-party advisors used to benchmark team structure.
Structure
The previous CRE model had, since 2004, been geographically focused into 3 large regions, all of which were culturally and structurally distinct
organisations of varying size and remit. Teams had responsibility for a range of activities including stakeholder engagement, strategy and transaction
management. This had resulted in limited specialisation, with teams tending to be operationally focused, which at times impaired both strategic master-
planning and delivery.
One objective of the redesign was to remove the regional focus and strengthen functions – based on a process model. The end result was a process
model based around 3 key functions: Strategy and portfolio; Programme delivery and Services (facilities management).
Improving the link between the planning process and business strategy was identified as a key issue to address, so “Global Strategy managers” were
created to focus on Shell’s 3 business lines and demand management, in addition to a portfolio planning team working in tandem with strategy and
global workplace teams. As well as being process-focused, the new model needed to be more client or demand focused at all levels. So although the
Strategy team has explicit CRM responsibilities, both Program delivery and RE services also now operate on customer relationship models.
Objectives
Organisational change was a fundamental driver of the redesign as it became clear that the existing CRE model did not fit the broader evolution in
operating model. However there were further objectives which drove the restructuring, which included:
• A need to define processes and measure performance
• To establish a simple, standardised global structure
• To create standardised positions and networks to encourage sharing of best practice
• De-layering and removing complexity (no more than 4 layers from top to bottom)
• To create a robust, resilient and flexible model able to adapt to organisational and operational change
Interestingly, as other process reorganisations were seeking efficiency there was no priority to reduce headcount, and as a result the CRE redesign was
almost completely neutral in terms of headcount reduction.
Outcomes and lessons
A greater focus on strategy has helped CRE get closer to the core business, and communicate the value proposition of real estate more effectively.
Although initially time was required to explain the new model to teams, there is now greater clarity around roles and accountabilities. There is also
improved integration and reliance across teams, although processes are constantly being tested to avoid new “silos” developing.
The new structure has also presented challenges getting the correct skill set in each role, and in overall talent management, with many of those in
operational positions seeking to be more involved in strategy. However one of the most critical issues is managing demand – greater strategic
engagement has led to even greater demands on CRE resources – so be careful what you ask for!

6. 6 Advance • Better by design: Reshaping the CRE function for greater impact • April 2011
Case Study 2: Philips
“Our key CRE objective is to create a simplified, integrated structure and deliver seamless,
efficient provision of real estate and facility management services for the business”
Background
Philips’ global portfolio amounts to 5.7 million sq m worldwide, with over 870 buildings spread across 72 countries.
Rather than a single isolated redesign of the CRE structure, Philips has undergone a process of continual evolution over the last few years. With 3
strong, distinct business lines or ‘Sectors’ to support, CRE seek to achieve operational excellence against these different business-line driven agendas.
Real estate requirements and dynamics often change rapidly driven by both strategic, top-down initiatives and bottom-up demands from business lines.
Structure
5 years ago, there was no formalised global real estate structure, limited understanding of portfolio, and limited integration across teams and regions.
However over the past few years the team structure has undergone a number of advances.
The CRE team is now split geographically into four regions, with regional delivery teams specifically focused on operations in each region, which include
facilities management and workplace management. In parallel with the regional structure a global team has been introduced which has global
responsibility for strategic planning and alignment with the business ‘Sectors’. The global team also has transaction management responsibility.
In common with many CRE teams, the team at Philips have faced pressure to be more client-focused and to create a hassle free integrated service for
the business. In response to this one of the most remarkable changes has been the introduction of client centric, workplace managers - managing client
demand. Workplace managers look after a cluster of locations, with lots of collaboration across teams.
Objectives
The key CRE objective is to create a simplified, integrated structure and deliver seamless, efficient provision of real estate and facility management
services for the business. Beyond this, one of the major current objectives is to free the internal team from day to day operations to enable a greater
focus on strategy. Although not an end goal in itself, the team are working hard to increase strategic alignment and engagement with the business as
ultimately this will enable achievement of core objectives.
Outcomes and lessons
The journey has led to an increase in outsourcing and greater leveraging of service providers for functions including property portfolio data
management, transaction management and facilities management, with the Philips team still working through the outsourcing process and assessing
whether more can be done to free up internal resource.
Despite this increase in outsourcing, portfolio dynamics and current structure mean continuous pressure on resources. Staffing benchmarks are
consistently beaten, so although internal structures are lean this can create issues with being over-stretched.
Although greater evolution is still required to fully realise the team’s core objectives, significant strides have been made. The structure is now a hybrid
version of different models: client and demand focused with functional and geographic elements. Although not necessarily planned in advance there is a
feeling Philips ‘get the best of all worlds’.

7. Advance • Better by design: Reshaping the CRE function for greater impact • April 2011 7
Towards a new model
This paper has explored the four essential CRE organisational models
operating in the market today. Each of these, and the various hybrids that
have developed, can bring strong results when applied and executed
effectively. But the service model for CRE teams is evolving across all
sectors as we see increased focus on building reliable portfolio data
Increasingly, best in class performers are moving from the traditional silos
of transaction management, facilities management, portfolio administration
and project management to a more integrated delivery of CRM, workplace
and process management. By transitioning from structural confinement by
function, geography or business line, we believe CRE organisations mirror
the delivery process and maximise their value to the core business.
An integrated process-led model can offer a number of benefits:
• Increased CRE impact through proactive strategy
• Enhanced CRE relationship with the core business and executive
management
• Broader governance and complete alignment of interests
• Portfolio and property life-cycle approach
• Common process and access to global best practices
• Maximum negotiating leverage and opportunities for cost savings
• Reduced management administration and supervision
• Common IT platform and knowledge management
• Facilitates instant conflict resolution with greater flexibility
• Simplify process for stakeholders and users
• Reduce project cycle time
Reshaping the team structure can be a challenging process. Figure 2
below outlines some of the key steps required for a successful transition.
However, although the benefits can be great, the length of time such a
change can take should not be underestimated. Nor should the potential
challenges be overlooked, particularly in terms of skill sets and realigning
people within new structures.
When it comes to choosing the right CRE organisational structure, there is
no single, standard template that can be applied regardless of company
size and structure. There is, however, an evolution in best practice. Those
CRE organisations that adapt and reflect this evolution will be best
positioned to reap the rewards of a more effective and strategic function
more closely aligned to their core business.
Figure 2: How to get there
Step 4 - Integrated Master Plan
Step 2 - Building Business Case
Step 3 - Refining Polices & Procedures
Step 1 - Current Structure
• Analysis of organisation design
• Understanding current roles and
responsibilities in-house and
externally in the existing
approach
• Complete the CRE Audit tool
(both internal & external workers)
• Key stakeholder interviews
• Analyse headcount data and
projections
• Study financial reporting, portfolio
data, MIS
• Reveal trapped value and focus
on the gap
• Indentify the alternative delivery
options
• Complete gap analysis
• Identify any changes required
• Identity the benefits, risks and
responses of the changes
required
• Select most feasible model for
detailed analysis
• Formulate high level
implementation plan
• Compare cost and benefits of
each model, arrive to the ideal
CRE model
• Define performance indicators
derived from business needs
• Define new rules, procedures,
skill information and resource
requirements
• Indentify outsourcing
opportunities and partners,
procure services
• Work with finance, legal,
technical, HR etc to develop
detailed business case
• Provide initial training
• Integrate CRE plans with
financial, business, other
infrastructure strategies
Step 4 - Integrated Master Plan
Step 2 - Building Business Case
Step 3 - Refining Polices & Procedures
Step 1 - Current Structure
• Analysis of organisation design
• Understanding current roles and
responsibilities in-house and
externally in the existing
approach
• Complete the CRE Audit tool
(both internal & external workers)
• Key stakeholder interviews
• Analyse headcount data and
projections
• Study financial reporting, portfolio
data, MIS
• Reveal trapped value and focus
on the gap
• Indentify the alternative delivery
options
• Complete gap analysis
• Identify any changes required
• Identity the benefits, risks and
responses of the changes
required
• Select most feasible model for
detailed analysis
• Formulate high level
implementation plan
• Compare cost and benefits of
each model, arrive to the ideal
CRE model
• Define performance indicators
derived from business needs
• Define new rules, procedures,
skill information and resource
requirements
• Indentify outsourcing
opportunities and partners,
procure services
• Work with finance, legal,
technical, HR etc to develop
detailed business case
• Provide initial training
• Integrate CRE plans with
financial, business, other
infrastructure strategies

8. 8 Advance • Better by design: Reshaping the CRE function for greater impact • March 2011
Authors
Tom Bayne-Jardine, Head of Corporate Accounts, England
+44 (0)207 399 5496
tom.bayne-jardine@eu.jll.com
Tom Bayne-Jardine is responsible for the firm’s UK based corporate clients, managing a team of 80 staff
delivering real estate services and consultancy advice across EMEA. He maintains client-facing roles as
Account Director for Lloyds Banking Group overseeing estate management, dilapidations, lease renewals
and rent review services on the Bank’s 24 m sq ft UK portfolio. He also has Global Client Relationship
Management responsibility for clients including AstraZeneca, Ericsson and IPG in EMEA.
Shelley Frost, Regional Director, Corporate Consulting
+44 (0)207 852 4695
shelley.frost@eu.jll.com
Shelley Frost is the Lead Director of the Corporate Consulting group within Corporate Solutions based in
London. She has international experience in corporate real estate issues, advising major occupiers on their
property portfolios, workplace, organisational and location strategy. She is also chair of
Jones Lang LaSalle’s Global Specialty Board for Consulting, a group of 600 consultants worldwide. Having
worked across a range of industry sectors, clients have included Microsoft, Cisco, Nestle, Barclays, Shell,
DLA Piper, Dell, General Electric and IBM.
Jeff Schuth, Regional Director, Corporate Solutions
+44 (0)207 852 4679
jeff.schuth@eu.jll.com
Jeff leads the Solutions Development practice for the Corporate Business in EMEA. With over 25 years of
real estate experience, he enjoys an extensive background and experience of creating solutions for global
corporations for their corporate real estate relative to marketing, strategy, consultation, real estate
outsourcing, organisation and solution design as well as account management . Jeff has successfully
advised leading corporates such as Citigroup, Deutsche Bank, HSBC, Xerox and Diageo amongst others.
Tom Carroll, Associate Director, EMEA Research
+44 (0)20 3147 1207
tom.carroll@eu.jll.com
Tom Carroll is an Associate Director in Jones Lang LaSalle’s EMEA Research team. Specialising in the
provision of research and strategy support to Corporate Clients, Tom has international experience working
with Corporate Clients including Deutsche Bank, Microsoft, AstraZeneca, UBS and Credit Suisse. In addition
to research advisory and strategy support for clients, he has also developed a number of white papers on
issues ranging from surplus asset disposal to emerging market strategy.

9. Advance • Better by design: Reshaping the CRE function for greater impact • April 2011 9
Further suggested readings from Jones Lang LaSalle can be accessed via our website at
joneslanglasalle.com
• Best Laid Plans: Key considerations for portfolio planning, 2010
• Lifting your game: Scenario planning for real estate, 2010
• Global Real Estate Transparency Index (GRETI) - Mapping the World of Transparency - Uncertainty and Risk in Real Estate, 2010
• EMEA Corporate Occupier Conditions - Quarterly Market Publication
• United States Office Occupier Outlook - Quarterly Market Publication
• Asia Property Market Digest - Quarterly Market Publication
• Real Estate Standards Global Index
• Making CRE Partnerships Work in Asia Pacific, 2010
• Better by Design – CRE Structures, 2011
• Asia Pacific Corporate Real Estate Impact Survey (CREIS), 2003-2005
• #1 What Corporates Want
• #2 Faster, Better, Cheaper
• #3 Turning the Corner
• #4 Reducing Real Estate Costs - New Motives, Old Objectives
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by
expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9
billion, Jones Lang LaSalle serves clients in 60 countries from more than 1,000 locations worldwide, including 185 corporate offices. The firm is an industry
leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment
Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $41billion of
assets under management. For further information, please visit our website, www.joneslanglasalle.com
About Jones Lang LaSalle Corporate Solutions
As a pioneer of the corporate real estate offering, our platform provides unmatched services across a single project, country or global portfolio. Our
commitment to shaping our business around helping our clients improve their productivity and by delivering on our promises keeps us at the forefront of our
industry. Our global platform of transactions, lease administration, project and facility management services is backed by our expertise in strategic
consulting, workplace and portfolio strategy to provide an end-to-end service offering. With over 30,000 employees focused on serving business globally,
we manage over 600 million sq ft of facilities and 52,000 leases, and complete more than 4,450 projects and 13,000 transactions every year. We have the
experience and scale to drive productivity, risk management and sustainability for our clients across the globe.
Acknowledgements
We gratefully acknowledge and appreciate the support and assistance of Mike Napier at Shell and Leon Van Leersum at Philips with the case
studies used in this report.

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