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WELCOME

Mary Kay Facilities

Our Approach to Corporate Real Estate Management

Mary Kay Facilities

Organization

Rebecca Hempkins Manager,

Facilities Design & Construction

Mary Kay Facilities

Leadership

Bruce Killion Facilities Business Analyst

Gage Hunt Director,

Facilities & Administration

Cherry Shen Deputy Director,

Facilities & Administration

Eric Zhang Manager,

APAC Real Estate

Mary Kay Facilities

Organizational Structure

Director

Facilities & Admin

Financial Analysis

Lease Administration

Utilities Procurement &

Analysis

CRE Financial Analysis & Oversight

Contract Administration

Design & Construction

Space Allocation/Moves

Design Standards

Sustainability

Capital Improvements

Facility Maintenance

In-House Operations

Outsourced Services

Maintenance Standards

Restaurant Operations

Facilities & Administration

Financial Analysis

Design & Construction

Facility Maintenance

Restaurant Operations

Chief People Officer

Mary Kay Facilities

Organizational Structure

CEO

Mary Kay’s mission is to

Enrich Women’s Lives

Mary Kay Facilities

Mission Statement

We serve Mary Kay employees and Independent Beauty

Consultants by providing them functional and supportive

facilities, managed on a cost effective and environmentally

responsible basis, to help them realize increased sales

productivity and enhanced operational efficiency. Through

this effort of driving revenue growth and profitability, we

support the Mary Kay community achieve its mission of

enriching women’s lives.

Mary Kay Facilities

Mission Statement

Our Customers Mary Kay employees

Independent Beauty Consultants

Our Purpose Provide functional and supportive facilities

Cost effective/environmentally responsible management

Our Goal Drive revenue growth and profitability

• 30 Countries

• 23 Currencies

Mary Kay Facilities

Global Presence

Mary Kay Facilities

Footprint: M2 by Facility Type

Mary Kay Facilities

Footprint: # of Facilities by Type

Office

Manufacturing + R&D GMP Best Practices OSHA FDA R&D Requirements Technical Systems & Equip Safety Focus

Warehouse Sales

Mary Kay Facilities

A Variety of Facility Types

Facilities

Collaboration occurs at every stage of a project Provides an ease when transitioning from project

implementation to maintenance

Mary Kay Facilities

Cross-Functional Execution

Maintenance

Financial

Analysis

Design/

Construction

Real Estate

Design/

Construction

Code Specialist-Bldg/Fire Technical/MEP Construction Space planning Procurement Property Management

HVAC Electricians Plumbers Painters Carpenters BMS Tech

Maintenance Financial Analysis

Financial Acumen Utilities Procurement Forecasting Accounting Analysis

Mary Kay Facilities

Wide Range of Skill Sets

Success!

Mary Kay Facilities

Sustainability

Interior floor layouts

Energy-efficient equipment replacements

• HVAC

• MFG production hot water systems

Lighting Retrofit

Conversion to Digital Controls

Adjustment of Temp Set Points

Focused demand management/submetering

2007

2012

Mary Kay Facilities

Sustainability

Director

Facilities & Admin

Manager

Financial Analysis

Manager

Design & Construction

Manager

Facility Maintenance

Restaurant Operations

International Markets

Chief People Officer

CEO

Mary Kay Facilities

Organizational Structure

Mary Kay Facilities

The Mary Kay Regional Footprint

Facilities International

Markets

• Assist regions/markets plan & manage property portfolios via comparative productivity & financial metrics.

• Facilities approval required for funding of all facility openings, relocations and capital improvements.

• Support project planning & execution, dictated by scope of project and available local resources.

‒ Remote consultation

‒ In-market project support

Mary Kay Facilities

CRE Structure

Mary Kay Facilities

International Projects Brazil Facility Consolidation Bringing 2 warehouses, Distribution and Head office under one roof

Scope: • Secure 3rd Party Vendors • Programming/ Forecasting • Property Search • Lease Negotiation • Design and Construction Mgmt. • Move In

Alphaville • 1,999 M2 Office • 4,449 M2 Warehouse

Sales Centers- AP Region

• Develop prototype sales center • Implement modular design approach to minimize hard construction costs. Scope: • Develop programming model • Develop design specification/ standards • Source suppliers/ 3rd party providers • Design and Construction Mgmt. • 400 – 1000 M2 • 10 month project timeline

Mary Kay Facilities

International Projects

Distribution Center--Moscow Frame/foundation structural damage

Project objectives: • Restore full functionality • Minimal interruption to operations • Ensure safe working environment

Scope: • Engage global service providers • Detailed assessment of structural damage • Develop repair plan

• Consensus w/corporate/region/local MK teams & insurer • Consistent with project objectives

• Remote & on-site execution management

Mary Kay Facilities

International Projects

HQ Office--Shanghai Project objectives:

• Long-term, financially sustainable solution. • Meets functional requirements of users • Consistent with brand image • Convenient for employees & Independent

Sales Force Scope:

• Establish project partnership with critical corporate & local MK functional teams

• Engage global real estate service provider • Identification & select general options &

associated decision timelines • Select preferred site option • Execute construction & occupancy

Mary Kay Facilities

International Projects

Real Estate Management Process & Execution

Facilities

Corporate Functions

Business Unit

Successful strategic and tactical execution demands constant cross-functional integration.

Mary Kay Facilities

Enterprise Alignment

Strengths

• Real estate selection & transactions

• Design & Construction

• Facility Maintenance

Constraints

• Limited resources

Facilities

Mary Kay Facilities

Cross-Functional Execution

Business Unit

Strengths

• Local market

• Functional requirements

• Local resources

Constraints

• Limited RE skills/experience

• Diverts attention from primary function

Mary Kay Facilities

Cross-Functional Execution

Strengths

• Corporate governance requirements

• Project/funding approvers

Constraints

• Limited resources

• Limited RE skills/experience

Corporate Functions

Mary Kay Facilities

Cross-Functional Execution

Best Practices Project Planning

Execution

Facilities

Corporate Functions

Business Unit

Mary Kay Facilities

Cross-Functional Execution

Best Practices Project Planning

Execution

Facilities

Corporate Functions

Business Unit

3rd Party Providers

Mary Kay Facilities

Cross-Functional Execution

Mary Kay Facilities

Game Plan Execution

1. Identify and document a comprehensive portfolio of real estate management best practices.

Project Justification

Site Selection

Lease Negotiation & Approval

Lease/ Contract Administration

Design & Construction

Facility Maintenance

Sustainability

Team Min Frequency/Yr

Executive Quarterly

International Regions Quarterly

Supply Chain Weekly

IST Monthly

HR Quarterly

Legal Semi-Annually

Finance Monthly

Marketing Semi-Annually

Mary Kay Facilities

Game Plan Execution

2. Partner with other Corporate functional teams

3. Develop “toolbox” of planning and management aids

• Document Administration

• Liaise with Legal Department for departmental contracts to

allow Project Managers the freedom to concentrate on

workload.

• Standardized formats for RFPs, contracts, selection criteria,

project justification, SOPs

Mary Kay Facilities

Game Plan Execution

• Design Standards

• Programming for all facility types

• Global Standards per facility type

• Shell Building Specifications

• Interior Fitout Specifications

3. Develop “toolbox” of planning and management aids

Mary Kay Facilities

Game Plan Execution

• Janitorial

• HVAC

• Electrical systems

• Pest control

• Flooring

• Windows

• Exteriors

• Landscaping

• Contractor Qualifications

Global Lease Administration

Information Access &

Distribution

4. Partner with IST to create an easily-accessible information platform for “toolbox” usage

Mary Kay Facilities

Game Plan Execution

Web-based Repository (Lease Harbor) •Physical characteristics of property

• Location (address, city, country, region) • Property type (MFG, Warehouse, Office, Sales, etc.)

•Electronic supporting documentation • Current agreements • Previous agreements • Floor plans, maps, architectural drawings, etc. • Photographs

•Lease specifications • Key action dates • Area • Notes

•Reporting • Ad-hoc and “canned” reports • Quarterly, current portfolio status and 18-mon

expiration

Mary Kay Facilities

Lease Administration

SCOPE Design Standards

(Programming/Quality/Finishes)

Service Provider Procurement (RFPs/Contracts)

Project Management

Objectives Performance

Application Gateway

Mary Kay Facilities

Mary Kay Facilities

5. Build a global network of essential third-party service and procurement providers to supplement/assist involved MK personnel.

Mary Kay Facilities

Game Plan Execution

Mary Kay Facilities

Game Plan Execution

• Building Operations and Management

• Life Safety / Security / Risk Management

• Training and Education

• Energy

• Environmental / Sustainability

• Tenant Relations / Community Involvement

The BOMA 360 program validates and recognizes

commercial properties that demonstrate best

practices in all major areas of building operations and

management. A BOMA 360 building must meet the

rigorous criteria that evaluates six major areas of

property management and operations:

6. Third-party Validation

What????

No silver bullets?

Genuine partnering with frequent, open & transparent

communication with our customers is the key.

Questions?