Voice of the Occupier: Rakesh Kishan

Hosted by Adam Hoy, Past President of the CoreNet UK Chapter, this episode features an insightful conversation with Rakesh Kishan, Managing Principal at Trascent and leader of the firm’s operations across the Americas and Europe.

Together, they explore the key challenges occupiers face in today’s evolving corporate real estate landscape — and what it takes to stay ahead.

Listen now for expert insights that can help you navigate the future of CRE with confidence.

#VoiceoftheOccupier #CREInsights #CoreNetGlobalUK

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Transcript

 Welcome to the Voice of the Occupier, the podcast from the UK chapter of CoreNet that dives deep into the world of commercial real estate from the perspective of those who truly inhabited. I'm your host, Adam Hoy, and I'll bring you insightful conversations with industry leaders, innovators and visionaries.

Shedding light on the challenges and opportunities facing occupiers today. Let's get started.

Hi everybody, and welcome to another episode of the Voice of the Occupier, brought to you by the UK Chapter of CoreNet. I'm Adam Hoy and I'm really happy to be here again with you today. And really excited to have my guest on with me. Rakesh I've known for a number of years. We've had the opportunity to do work at a, a few different stops in my journey.

Rakesh is a an expert in the corporate real estate field and, and is gonna be a, a great person to have a conversation with today. Rakesh, I'll turn it over to you. If you could give a, a little bit more of an intro to yourself, Adam, great to see you again, by the way. Really delighted to be on this podcast.

And you know, Adam, I founded a company Culture Set and we represent the views of. Hundreds of occupiers. I would say our clientele is sort of Fortune 500, 20% of the Fortune 500. So, you know, from different industries. I think it'll be interesting to share with you today what we're hearing in the marketplace across a broad landscape of corporate real estate organizations.

Percent is a global consulting firm, end user, or you know, sort of advisor only. And we help client real estate organization on their transformation journey. So I think that's the perspective we will bring to the table. Trista's offices in the Middle East and Singapore. In, in the New York area and in Switzerland.

Fantastic. Yeah, you know, we've talked a lot over the years and I've always appreciated the viewpoints that you have and, and you can certainly bring the view across, you know, several industries from an occupier perspective. So really excited to have you on today. One of the places I'd like to start with guests that we, we speak with is about challenges.

And I think if you look back over the last five years specifically as we've. Kind of come out of COVID and, and you know, for a while there, return to office was a big topic at CoreNet events and, and in other summits and other conferences. I think luckily we're, we're, we're kind of past that now, right?

We're talking more about value and, and more about kind of what we can be giving back to the enterprise above and beyond, just ensuring people are back in the office. But in your view, given that's. That broad view you just mentioned across the acpi landscape. Can you talk a little bit about some of the challenges you're seeing in the market right now?

So it's a, it's a very, it's a very dynamic real estate environment today. Adam, as you know, right? There are a lot of geopolitical shifts. So a lot of our clients are focused on how to make sure the portfolio can adapt. To the business needs in a quick agile fashion. How to adapt services, how to adapt the portfolio to to create real estate solution that makes sense in an environment that's dramatically volatile.

And I'll just give you a simple operational perspective, harking back to your pharma days here. Okay. Kind of bring you back to your life science era. You know, Adam, it used to take to get a fume hood for when you're constructing a lab. Maybe needed a two, three month lead time notice to make sure the fume hoods in a lab, whether it's semiconductor lab or a life science lab, what have you, you can plan for it Today because of the geopolitical situation and supply chain issues and tariffs, that lead time is probably gonna be more than one year, and the costs are becoming very unpredictable.

Okay. So I think one challenge. Facing almost all of our client heads of real estate organization is that volatility. And therefore, real estate needs to be agile, adaptive, resilient in the face of uncertainty. So strategy under uncertainty right now for most of them is strategy under uncertainty, which means, yeah, we'd play out the scenario, but we need to pivot.

So that's, that's one big challenge. The other one is, of course, we're at the precipice of one of the. Biggest trans digital transformation we've ever seen. The invent of ai, if you go back, Adam, it's where e-commerce worked when it first came in. You remember the days of Time Warner, a OL mergers. I mean, that was a big wave of e-commerce transformations.

Now people are saying AI is gonna be bigger, bolder than even that we take for granted shopping online on our phones, buying our plane tickets on the phone. Well. Before that e-commerce revolution, there was nothing like that around. So the second challenge our clients are facing is this digital transformation roadmap.

What does a digital transformation roadmap look like for A CRE organization? I mean, they're trying to get their processes streamlined. They're trying to establish data architecture for real estate. They're trying to integrate across into HR and IT and finance organizations. That digital transformation has multiple components to it now, I think the, the last, and I would say final major challenge that we're hearing across the industry is the organization talent.

How will I deliver with my team and my delivery parts supplier, partners out there against these challenges? How will I do it? Do I have the right skill sets, the right roles in place? I think that's the, that's the third challenge and that's a difficult challenge. It's not something you can remedy overnight, but it is something people are trying to think about is are the legacy structures and ways of working are, are they really the right ones for the future?

That is, you know, sort of, we're gonna be confronting. I'll give you a concrete example. One of our clients the CEOs already called in the head of real estate and asked her, will you be ready for AI in two years from now? And I wanna see a plan as to how, so this is already beginning, right? I think those are the big challenges we hear from our clients.

Very interesting. Yeah. I definitely wanna dive into ai. But before we do that, the. The talent and it's, it's a, it's a interesting one. I think, you know, if I reflect on. Different summits and, and conferences I've been to over the years. There, there was always a lot of talk about kind of the talent and succession planning within the corporate real estate world.

Right. I think 10, 20 years ago, a lot of the talent was coming up through. Maybe structured structured programs in real estate, whether somebody comes from a supplier side coming up, you know, as a young broker through a organization, and then maybe over to the occupier side and then developing a career.

I think over time we've seen a lot of different leaders come from other functions within corporations, more general manager types to come in and hire in a lot of the real estate and facilities talent. How are you seeing that play out? What kind of talent strategies are you seeing occupiers use now?

So I wanna overlay one challenge, kind of, kind of a mantle over the talent discussion, Adam. And that is there's going to be, and I was speaking with Scott Wiley, you know the c the, the CEO of Cornet in Columbus, Ohio a couple of weeks ago, and he was talking about how many people will be leaving the workforce.

It's an absurdly high number. There is a demographic cliff where people are leaving the workforce and retiring. That's hanging over us right now. So yes, there is there's a talent issue and where do we see people coming into the organization from? But there's also a talent exodus of experience knowhow as people retire and the baby boomers exit the workforce.

So. Making real estate an attractive value proposition from a new hire perspective is going to be essential in the future. Right. So it's, it's an incoming, there's an exiting workforce. There's an incoming workforce. But going directly to your question, you also have to look at, to see where is real estate reporting today?

Because where it's reporting will. To a degree impact where the talent imports gonna come from. So we see real estate reporting sometimes to the HR organization. We see it many times reporting into the procurement organization. And there are times reports into the CIO organization where it's sort of combined with business, other business services, the CIO heads, a business service organization, and there are times reports to the CFO.

Those are the primary lines of reporting now, depending on where you fall. So when we see real estate being part of a technology organization or headed by a CIO, we see a lot of talent coming in from the IT organization. And we also conversely see some real estate leaders becoming more general managers, got managing contracts delivery.

You know, stakeholder engagement, business engagement, transferring over to the IT side as well. We've seen that at some of our clients. If it's going to be reporting elsewhere, the situation may be different, but what we are seeing is that whether you hire the talent or not, the business partner relationships with procurement with it in particular, are becoming paramount to get the digital talent into the real estate organization.

So being able to access data architects, being able to access technology solutions architects is becoming crucial. And that's going to come either through hire, which is getting increasingly difficult to justify for most corporate real estate leaders. So it's gonna have to come through the, the business partner relationship structure they have in place from other departments within the company to get that talent 'cause it's needed.

Yeah, that makes sense. I think partnering within the organization and then finding talent within your providers that you partner with as well. I mean, I think both are key. One of the interesting things that. We've interacted on over the years and, and I'm interested in getting kind of an update on is the way that occupiers are going to the market.

If I think, you know, back to how long ago, 10, 15 years when we were working to get together, when I was at Unilever, we were looking at how the company was going to the market in the FM space. I know through COVID there, there were a lot of different thoughts on, on. Contractual arrangements, how contracts are put in place.

So definitely an evolution. But I'd love to get your take on. What type of deal structures you're seeing out there now? What are occupiers doing? You know, we've gone back and forth in the industry around, do you go to a big global company for all your service offerings? Do you split it up by region? Do you go by service offering and do it globally or by region?

But what are you seeing? I think our listeners would be really interested in your broad view on kind of the deal structures that you're seeing right now. Yeah. But you know. I hate to begin a sentence with. It depends. Okay. Because, but in a way it does because if you are a generation one client in the sense you are, you are trying to find your partners for the first time, right?

You're, you're outsourcing for the first time, you're externalizing service, delivery, delivery to re-pivot yourself to be a. A business partner to, to the enterprise, you know, where you kind of run a different type of organization and elevate yourself to be more strategically focused structure, but sort of outsourcing a lot of the tactical delivery.

If you are in that stage, I think your go-to-market strategy is gonna be very, very different because there, the paramount issue is people transfer and a lot of companies, when they face people transfer, they like to go to one company. Workforce transfer to one company, common compensation, common standard of care.

They really care about the employees being transferred, their wellbeing, their sort of, you know, recognition of seniority and really make it a partnership there. It tends to be a single global partner, okay? Because the paramount objective is actually getting the people in a good place and creating good career paths for the people and treating everyone equally.

Now, fast forward. 10, 15 years into the contract there, it's all about optimizing performance and addressing any under performance areas. So there they become quite open to moving to a multiple supplier situation. So they might say on the real estate side, they may say, we'll have a lease admin solution through this company.

Let's we'll segregate the two transactions. We have a global partner, but we will use best in market sort of capability. On the FM side, it tends to be regional, but depending on whether you have manufacturing in the mix or not, it could be, you know, sort of manufacturing type supplier and then office and lab type supplier.

So people are gonna look to see where can we get the best solution in second, third, fourth, fifth generation of level of maturity. Now, there are some of our clients that go to sort of what we call the three X model transactions and portfolio strategies, one x. Projects is two x, workplace solutions is three x.

Some of our clients have a three X model, and as those models have matured, even those companies have said, yep, we can stay with the same company, but we're gonna carve out the real estate portion and put it under a different contract. We, we want a more of us focus on, on that piece of the business. For us right now where we are, and if we have it all together, we're thinking that.

Maybe the account lead or the supplier organization may, may not have the mind space or the focus to kind of handle it all. So they are kind of carving out even if it's the same supplier some of the businesses differently. We are seeing that. Okay. But the majority of the companies have a multiple supply model by region, by business unit.

I mean, that's the majority of of the organizations out there. And I'm talking big, large multinational. If you get to. More of a smaller scale company, so we're not talking Unilevers anymore, but you know, companies that may have three, five, 6 million square feet of space around the world, they tend to go three x.

They're like, I want agility. I want a lean, stay back team. This has to be partnership. I want a single point of contact for all my services. Completely different mindset. Yeah. Yeah. That makes sense. So maybe just to carry on with that, I think from a provider perspective, I, I'm not asking about specific providers, but we know there's, there's, there's a few global providers that, that we usually talk about when we go to those big three x deals, big Fortune 500 companies are, are you seeing more niche players in different markets of the world popping up, or, or are you seeing the, the landscape pretty similar to what it was five or 10 years ago?

I think there are some niche players. They tend to be regional. They're not global. So you'll have in Scandinavia a strong competitor to the, to the global players who specializes in the Nordic countries only. Okay. So there, there's a company called Core. You know, they only specialize in the Nordics, but they're very strong.

And they have multinational companies as, as their clients. You go to the US and you will find some suppliers that aren't global, but in the US they can do a great job with technical services. They can manage soft services in the us, not in Canada. Okay. But they tend to be more regionally focused, but they can provide some alternative options to, you know, occupiers looking for suppliers.

The, the thing you know, Adam, is this industry has been consolidating continuously. For the last 15, 20 years, you've seen it. DT z Grub, Ellis Johnson controls I mean the list goes on and on. They were all players in this space. All gone, consolidated, wrapped up, right? So the consolidation has been fierce in this industry.

It continues. There's a handful of global players and there's some regional specialists you can find, but the options aren't that many. Yeah, it's interesting. Yeah. And you, you know, the names that you just brought up, I, I think back to the times where there were more that, that, that could play across it.

That's very interesting. One of the things you mentioned a bit ago, and I definitely wanna spend some time on it, is AI in the real estate world, you know, how are occupiers using ai? I think it's definitely. A hot topic, you know, any conference you go to, it's definitely something that's, that's on the docket.

People are trying to figure out how to work it into contracts, what, you know, what kind of productivity gains we're gonna get through different arrangements. But maybe you could talk a little bit about in, in your view, how are you seeing occupiers using ai? So we're keenly focused on AI as a company as are our clients.

And we recently had Dan, professor Daniel gta. He's a professor at Columbia Business School, and he spoke to our leadership team. He's actually Adam speaking at one of our events in Paris coming up in the, in the fall on demystifying AI and implications for corporate real estate. He, he's talking about that topic because.

There's a lot of jargon and lingo about AI and what it is and what it isn't out there. So we, we, we asked him to talk about it and he, he told us a funny story. He said at one of his presentations, he said, right now, at this point in time, and this is gonna sound a little crazy, he said, AI is like teenage sex.

We were like, what? He goes, everyone's talking about it. No one knows how to do it. Everybody thinks everybody else is doing it. So they say we're doing it too. Okay. So this is a he, a quote he got from another presenter, but he is trying to illustrate a point. We are in the early stages very early stages of ai.

The models are continuously evolving. AI is being used already by some very technologically advanced companies in different areas. So Google is using it to reduce energy in its data centers. Very successful. Business, but that's a very technologically advanced company. So we, we believe our clients are focused on it, but at the same time, I'm talking about global corporate structures where there are use cases identified by the enterprise as to where AI can be used and where it cannot be used.

Okay. So because it involves information and data and unless you have trained people working, there's some wrong, you know, risk of loss of data. Into the into the open marketplace. So I think what our clients are telling us, we know we, we have to stick with our use cases. There are policies in place, but it also makes the case stronger that while we may have restrictions, our supply partners may not have the same restrictions.

How can we better collaborate with the supply partners, the delivery partners to make an impact in the service using ai? So that's the kind of way to get around some of the restrictions you may face. As a corporation around limited use case uses of AI at this point in time. But you know, I think AG agentic AI is the natural sort of extension of where it can be used by corporate real estate.

But the issue Adam Less is about whether or not corporate real estate is gonna to use it. The issue is will you be ready to use it? Because AI depends upon data mining data, and I think the focus right now is a lot of real estate organizations. Have not thought through their data architecture, right? And they're getting data from multiple sources, but it's, they're conflicting sources.

They're not reliable. They need stuff from hr, from finance. I mean, there's a, there is a lot. And that whole data architecture has to be cleaned up, defined data provenance, data dictionaries before you can really be ready for ai. So our advice to clients is, yes, it's a great potential, but you have to be ready for it.

Yeah, it's interesting. You're right. You know, as you're creating the data lake, the data lake's gotta be clean and you gotta make sure that it's the sources are accurate. So, fully agree. I'm wondering, you know, you talked through a little bit about how occupiers may be leaning more on their service providers and their partners with regards to how they can use AI because of different privacy restrictions, et cetera.

You know, one of the things that, that. That I'm seeing in different discussions is how those providers are, are making AI part of their everyday service delivery. Right. The, the, the hope is that as an occupier and you're partnering with world class CRE companies, they're gonna, they're gonna embed some of that new way of thinking into their, into their models, you know?

You, you gave a good reference to kind of, you know, how people are looking at ai. How are you seeing it in the service provider world? You know, how are those companies, do you see it getting embedded in the way that they work? And I know you speak with a lot of you know, leaders across the, the, the service provider landscape.

How are you seeing it evolve within that world? I think there's an urgency there, Adam, to, to make sure that the supply partners are at the forefront. Of absorbing and incorporating ai. I think there's a sense of urgency we haven't seen. So I think they are all of them very acutely focused on using AI and creating the value proposition to their clients because it's going to become a differentiator.

And this industry is looking for ways to differentiate themselves, some of their tying, tying their brand more closely to technology than others. Others are maybe, focus on revolutionizing the way they deliver through, through technology. I think all of them are keenly focused. I think the interesting thing will be, Adam, as these deals become more technology intensive and data intensive and less about people, you know, to, to some degree it's been all about people, right?

But as the deals become more about technology and, and data and integration. I think the deal structures themselves will change, you know, so the way you structure a contract, which has a lot of technology components, is gonna start to look a little bit more like an IT outsourcing contract to an extent.

Of course, service delivery is gonna be on point on sort of on premise. It is about off premise, you know, outsourcing solution. So I think already we're seeing the, the contracts for, as the supplier base has increased the level of technology sophistication and offerings that is giving to, to clients. Those deal structures are changing and the provisions in those contracts are changing to keep up with the level of change in technology and AI that we're, that we're starting to see.

To kind of pivot, one of the things I'd like to ask guests is their view around the future and, and what's coming up in corporate real estate. I think if I look back and if we frame it over the course of this, the decade we're in we know what the focus was on the first part of the decade, we're consumed with COVID and the COVID response and, and how we all kept our, our facilities open, operational, safe, et cetera.

I think I know the answer 'cause we've been talking about it in technology and ai. If you look at the rest of the decade, we're halfway through the, the decade that we're in. Wh where do you think the focus is gonna be, and we may be talking about it right now, but curious as to see if there's anything else that you think will, will dominate the rest of the decade.

Absolutely. So look here, my viewpoints are kind of clear. Okay. So 26 to 2030, right? We're talking about these almost more than halfway through 2025. Okay. Now, just as an idea, just Adam, think about how much the world has changed in the last eight to nine months. Right. Though I, I feel the pace of real estate has accelerated exponentially.

I, I, I just feel there's a, there's a high pace of change in business out there now in the, in the 26 to 2040. I believe it's gonna be very much a do or die situation for many real estate organization. What do I mean by that? I don't mean anything drastic, literally here, but what I mean is the real issue will be can real estate deliver right on the on its digital transformation?

Promise on its resilience, promise, on its flexibility, promise, on its customer experience promise to the corporation and smart workplace solutions. To businesses in a very volatile environment. I think that's going to be the, that's what I mean by do or dike hand real estate. That's gonna be the focus because the world is gonna be, is changing very quickly.

You've seen how much change has already happened in a matter of months, right? You just project that forward. Now remember Adam, there was, you know, if you go back to Cornett days I don't know, 10, 15, 20 years ago, a lot of people are talking about, Hey, seat at the table. Well. It's not just a seat at the table anymore.

You are in front of the board. Real estate heads are sitting in front of the board. You're pushed to the table whether you like it or not. The question is, are you ready and can you deliver? Yeah. Fantastic. I think that's a good segue. You know one of the things that I've been very thankful for over the years is, you know, groups like Cornet and the community that it's created and the, the education opportunities, the networking opportunities that we have, and as you said.

You know, I, I've been part of CoreNet a little over 20 years now, and we definitely were talking about seat at the table. We were talking about the conversion of HR, it and real estate and how we got together and made things work. And I continue to think about the, the value that it's brought to me, the teams that I've led through different organizations.

If you were talking to somebody young in their career, either they had just started in the corporate real estate industry or they were thinking about a career in the corporate, in real estate industry. Can you give some thoughts on what kind of guidance you would give that person? Sure. And it's a topic near and dear to my heart.

In fact, you know, I referenced Scott Wiley I think a few minutes ago, and you know, his topic with me was all about talent in real estate. Okay? We were discussing talent in real estate, the importance of it. Now somebody entering real estate today I think is probably entering real estate at the most dynamic point in time that I can see.

I mean, think, I mean, Adam, look at the topics we've covered. We've covered ai, we've discussed the types of challenges we're facing. We we're in a volatile environment and I think there's a great story for real estate, for a potential new hire to talk about the kinds of challenges. Real estate is about running a business today.

It's not just about joining a function, it's, it is really become a business at an enterprise level. The days of a tactical transactional function are gone in most companies, okay? They're all aspiring to reach further and higher. So it's a very exciting time to be looking at a career in real estate, I think as there's digital transformation of the function.

But it's. But I think what you need early on in your career, Adam, is mentors. I think mentors and being able to spend time with somebody very experienced in real estate is, is crucial. And that's why I think that's where I think associations like CoreNet are so important because imagine if there is somebody young interested in real estate, they have a starting position in real estate, they run into you and they get a perspective on your journey in real estate.

It's a very inspiring experience for anyone. I think anybody coming into real estate should re recognize today. It's a multi-dimensional business. You have technology, you have strategy. From a portfolio strategies perspective. You have stakeholder and business customer experience. You're running operations.

You're running construction, okay? You're developing solutions. It is a fantastic, well-rounded career in one segment of the enterprise. I think that value proposition is clear. It's strong, it's a great story. But like anything, I mean, I personally, my career prospered because somebody took me under their wing when I was very young, and the CEO took a liking to me.

Everybody else around me hated me because of that. Okay, so let's be clear. Okay. Who are my peers suddenly got very agitated when, when the CEO took me under, under his wing, but. I think finding those mentors, whether they're in your organization or outside, can be very powerful forces, and I think Cornet does a great job of that.

Agreed. Yeah, well said. You know, I think as we've been talking about throughout the conversation, it's, it's a dynamic time and it's never been a better time to be in, in this industry. The amount of value that we can bring to our enterprises, and you think about the enterprises that we all sit within and the value those enterprise.

Enterprises bring to the world. I think it's a great time. Listen, Rakesh I really wanna thank you for joining us today. As I said at the beginning, the breadth of knowledge that you have across the occupier landscape is unique and we really appreciate having you on the show today. Thank you very much.

Great to be here. Thanks, Adam. And thanks to everybody for listening. We will be back with another episode of Voice of the Occupier soon. Thank you.