Spotlight Series

Real Estate Leader Spotlight Series: A conversation with Todd Ziegenmeyer

October 10, 2024

What initially led you to Corporate Real Estate / Workplace?

I appreciate this question! My journey into corporate real estate wasn’t typical; many leaders in this field come from diverse backgrounds, and I’m no exception. I originally entered real estate to understand purchase and sale transactions, driven by my dream of one day owning a vineyard, inspired by my romance with Pinot Noir from working at wineries in the Santa Barbara region.

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I landed my first role at Cresa in 2016, a tenant-only representation firm in San Francisco, where I discovered the fascinating world of corporate real estate. I was captivated by how data and financial modeling informed decisions about facility expansions, leading to creating office environments where tech companies compete to attract and retain top talent. This experience motivated me to pursue real estate roles on the end-user side, ultimately finding a position at Square (now Block), where I played a significant role in the company’s strategic visioning for real estate and workplace.

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My time there was transformative, providing me with what felt like an MBA in corporate real estate through hands-on experience with significant company growth, mergers, and adapting to remote work past-pandemic. I have come to find that internal heads of real estate are particularly valuable being at the intersection of the c-suite initiatives and the individual business unit needs. It’s one of the few positions in a company that sees and interacts with the entire organization while carrying a significant impact on a company’s financial statements.

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Tell us about your most recent role. What functions did you oversee? How large was the CRE team? Where did the department sit within the organization?

In my most recent position as Global Real Estate Lead at Block, I oversaw high-stakes real estate transactions, portfolio planning, budgeting and lease administration for offices, warehouses, and data centers.

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Reporting into the finance department, I led a highly specialized and lean team, collaborating with the broader global workplace organization of 40 to ensure our strategies were aligned with the overarching financial goals and key initiatives.

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Tell us about your portfolio. What did it look like?

The portfolio primarily focused on office spaces, featuring significant properties around the globe such as in the Bay Area, New York, Atlanta, St. Louis, Melbourne, Sydney, Tokyo, London and Dublin. Over my tenure, the total rent expense for operating leases reflected our company’s growth, rising from $23.3 million in 2018 to a peak of $93.6 million in 2022, followed by a strategic downsize to $75.8 million in 2023. Many of these strategies took upwards of 12-18 months to materialize with the shift largely driven by the rise of remote work, prompting us to right-size the portfolio and consolidate redundancies.

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Scaling at that pace was complex and involved significant continual adaptation. Establishing processes and standards of operation (i.e. alignment with FP&A on lease accounting policies) was essential to avoid repetitive errors. Things like lease administration software, site selection criteria, standardized RFP templates, and approval workflows become essential for teams to operate at scale while avoiding hurdles that could disrupt plans or jeopardize funding for other critical business needs. As a real estate lead, timing is everything–prolonged negotiations can weaken leverage so being able to configure your operations to optimize for efficiency and managing swiftly through approvals is key.

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Could you share a story of a project or initiative you spearheaded that had a major impact on how your team managed the portfolio?

In the context of evolving workplace needs, aligning metrics and baselines can significantly enhance portfolio management while removing bias. As remote work became more feasible due to advancements in video conferencing and collaboration tools, traditional approaches to evaluating office space—like a 1:1 seating ratio—became outdated, especially as heads down work shifted to being done at home or elsewhere.

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While some teams, such as hardware or regulatory departments, may still require physical spaces for compliance and daily in-office work, offices for most teams and companies are transforming into hubs for infrequent connection, which requires flexibility in design. These spaces now primarily serve as venues for company-wide meetings, project kick-offs, and external engagements.

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For example, I’ve led real estate transactions that reimagined office spaces with flexibility and hospitality in mind, converting plans for 100+ desks into a penthouse suite designed for high-profile meetings and team gatherings. This shift not only reduced the size of the project but also led to a reevaluation of how we measure space effectiveness. Instead of focusing on seating capacity, metrics like event volume and attendance can become more relevant in advocating for real estate changes.

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What was your real estate tech stack? Are there any favorite processes or tools you think would be interesting for others to learn from?

While several tools were used across the team, I spent significant time working with our lease administration tool, connecting its data to accounting, finance, and workplace management systems to automate reporting and support company controls related to testing. Since 2016, lease software has advanced significantly, with many tools now integrating lease administration and accounting to ensure synchronization and reduce the need for separate systems.

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One key piece of advice is to recognize that integrating new lease software requires extensive collaboration between real estate and FP&A. Choose a vendor that understands your specific needs and provides support for all teams beyond implementation.

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Additionally, invest time in mastering the chosen software. Frequent use not only leads to better outcomes but also reduces the temptation to switch systems, which can complicate processes. Lastly, don’t get too caught up in aesthetically pleasing dashboards; focus on the tool’s functionality and how well it meets your operational needs.

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What challenges do you see in the industry today? How do you think leaders need to evolve to address this?

One of the primary challenges today is recognizing that, long before the pandemic, employees and leaders sought greater flexibility in where they worked. The pandemic accelerated this shift and revealed a deeper desire for flexibility—not just in location, but in how and when work is conducted.

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Currently, many calendars are overwhelmed with back-to-back virtual meetings that often leave participants feeling that discussions could have been summed up in an email or a shared document. Instead of focusing solely on return-to-office or hybrid mandates, the conversation should shift toward understanding how teams are working together; it’s no longer just about place.

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A straightforward step in the right direction could be to implement a no-meeting week once a quarter. This would give employees dedicated time to focus on individual tasks, catch up on projects, or simply take a much-needed break. By prioritizing how teams collaborate and understanding their flexibility needs, leaders can shape a culture that enhances both job satisfaction and productivity, rather than relying on where someone works to drive performance.

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That said, while remote work continues to gain traction, it’s essential for leaders to advocate for physical spaces that foster collaboration, community, and innovation. Complete isolation can stifle creativity and connection, leading to silos within teams and undermining the vital mentor-mentee relationships necessary for nurturing the next generation of leaders.

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What’s next for the industry? What are you most excited about?

I am particularly excited about the developments in AI and the potential for new tools that can manage real estate portfolios more efficiently. There is a tremendous opportunity for machine learning to interpret lease provisions and provide actionable insights for real estate planning, facilities management and workplace.

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Additionally, I believe AI can streamline the process of isolating office surveys. Through analyzing landlord profiles, risk management, building type, amenities, space requirements, and initial asking rents, AI has the potential to identify the most suitable options more efficiently.

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Overall, the integration of AI into real estate management is an exciting frontier with potential to enhance decision-making and optimize operations in the industry.

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