In 2001, TD Canada Trust sent out four million individualized packages to clients and spent $15 million on newspaper ads announcing the coming changes. It also launched TV spots that declared that “banking can be this comfortable.”
Cementing the new approach into the minds of 44,000 employees was also crucial. “We looked at the [banking] experience from front end to back, and part of that was helping to educate everyone in terms of how delivering a comfortable experience is not just an advertising slogan, but it is a way of doing business,” says Mercuri. “Everyone in the organization is tied to how we deliver and speed the experience.”
All that effort paid off almost immediately, and continues to. Since 2001, TD has grown from 17th position to become North America’s sixth-largest bank. Market capitalization has climbed to $74 billion from $23 billion.
“Brand is much broader than just communication and the typical marketing activities,” says Mercuri. Comfortable banking, he says, encompasses everything TD does. “It is part of how we build products, how we build systems, how we design our branches and stores, [and] how we design our website.”
It is also the foundation for an enduring long-term strategy. “It’s easy for organizations to get bored with the old and get distracted and look for something else,” says Mercuri. “We continually drive forward with listening to customers, doing continuous research, re-engaging the organization. [This] isn’t an old story; it’s a current story.”
The key strength of Brookfield Office Properties’ projects: the tenants
Every weekday, thousands of Canadians enter office towers bearing Brookfield Office Properties’ discreet-looking corporate emblem, but most of them probably take far more notice of the Starbucks logo in the building’s food court. Yet among investors and senior corporate executives across the country, and in the United States, Australia and the United Kingdom, Brookfield is one of Canada’s most valuable and respected brands.
Brookfield grew out of the sprawling old Edper/Brascan conglomerate, and it now has more than $27 billion in assets and 80 million square feet of office space in 15 cities around the world. Landmark buildings that it owns include Toronto’s Brookfield Place (formerly BCE Place), the Suncor Energy Centre in Calgary, the World Financial Center in New York and 99 Bishopsgate in the City of London.
Brookfield’s overall strategy isn’t revolutionary. You can boil it down to two traditional commercial real estate maxims: You are who you associate with, and location, location, location.
The company is absolutely clear about who its target market is: the top 1%—the most prestigious corporate tenants, that is. By signing them to long-term leases in prime business districts, Brookfield figures it can maintain high occupancy rates and steady rental income through all stages of the business cycle. Its tenants include all of Canada’s Big Five banks, Bank of America/Merrill Lynch, Barrick Gold and BHP Billiton.
Implementing that strategy, however, is a very complex job. “We have very high-profile tenants and very high-profile buildings and we consider part of our philosophy and culture that our tenants are our partners,” says Brookfield Office Properties president and COO Tom Farley. “You have to understand all of the key factors because that is our brand.”
Those partnerships not only helped Brookfield ride out the 2008-2009 recession, but prosper through it. Occupancy rates in Brookfield’s 110 buildings around the world averaged 92.1% in the second quarter of 2012, only slightly below the pre-recession peak of 96.3% in 2007. Brookfield’s buildings exceed average market occupancy rates in eight of its nine core markets, including New York, Los Angeles and Melbourne, Australia.
The emphasis on quality of both tenants and buildings also helps boosts margins. On average, rents in Brookfield properties are 21% higher than rents in competing buildings in its markets.
Brookfield has targeted financial services, resources, government and “creative-and-media” as sectors that produce strong demand for office space. But it also seeks out the best companies within sectors, especially multinationals that can help it leverage its brand. “We are able to talk about their needs not only in North America, but in Australia and the U.K.,” says Farley.
A case in point: a new 950,000-square- foot building in Perth, Australia, which officially opened in September. It’s 100% leased and all the tenants, including Barrick, BHP and PwC, rent space in other Brookfield buildings.
Upgrades and maintenance matter, too. Tenants expect that even older buildings will incorporate up-to-the-minute advancements in design, technology and environmental standards. In October, Brookfield completed a massive $100-million renovation of First Canadian Place in Toronto, and one benefit was a 24% reduction in energy use.
“Our tenants recognize exactly the value we are trying to create for them,” says Farley. “And for ourselves.”
Top 50 Canadian Brands
% chg in
Source: Level5 Strategy Group
|LLL-T lululemon athletica||63.77||
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|TD-T TD Bank||50.47||
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|BPO-T Brookfield Office Properties||21.61||
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