The Gillette Co. owns this South Boston plant, where it employs about 2,000 people. The facility is just a part of the firm’s worldwide portfolio, which includes more than 120 leased and owned properties.

Hoping to shave its real estate expenses amid a cutthroat business environment, The Gillette Co. is offering select commercial real estate firms with an opportunity to run the company’s national and international real estate facilities, officials of the Boston-based consumer products company acknowledged last week.

“We are looking to reduce costs in our external spending, and this is part of our effort,” Gillette spokeswoman Patricia Klarfeld explained last week, with the shaving-product giant having put a request for proposals out to 13 companies, mostly with global real estate capabilities. Klarfeld also declined to discuss names of the potential suitors, stating only that “our group does not see any value in releasing the names of the companies contacted.”

Klarfeld did say that Gillette officials hope to narrow the field to a half-dozen firms by the end of February, and said the company will then look to select one or two “preferred vendors” to handle the bulk of the firm’s real estate needs.

The Gillette RFP has potential local implications for several reasons, including the firm’s significant presence in the Bay State. Klarfeld could not say exactly how many square feet of commercial space the company occupies locally or globally, but the firm has its home base in South Boston, as well as a substantial amount of office space which it has leased on a long-term basis at the Prudential Center. While she could not provide a square-footage estimate, Klarfeld said the RFP affects upward of 120 leasehold properties throughout the world.

One Hub firm that might be particularly impacted one way or the other would seem to be R.M. Bradley Co., which currently is listing agent for Gillette’s Prudential Center space, some of which is available for sublease. R.M. Bradley Chairman Ronald R. Dion – a one-time Gillette attorney – was unavailable for comment last week, while a company spokeswoman referred all calls to Gillette. As part of its policy, Klarfeld would not say whether R.M. Bradley was approached to submit a bid or whether it is still involved in the process. Previous reports have estimated that Gillette is subletting about 75,000 square feet of an estimated 225,000 square feet it occupies at the Prudential Center, but Klarfeld could not confirm those figures. R.M. Bradley is still marketing the space at present.

Financial documents filed by the Prudential’s landlord, Boston Properties, do not state exactly how much space Gillette leases at the tower, but does list the firm as the sixth-largest tenant in Boston Properties’ extensive national portfolio. In total, Gillette leases 488,000 square feet from Boston Properties, the documents reveal.

‘The Most Potential’

Globally, Gillette has 27 facilities containing 250,000 square feet or more of space, with 13 of them having some leasehold aspect. Those plants and offices are located in such regions nationally as Illinois, Iowa and California, while the global scope extends to Belgium, the United Kingdom and Toronto, Canada. Among the owned facilities is Gillette’s South Boston plant, which employs more than 2,000 people.

One firm that is not in the running for the Gillette RFP is Insignia/ESG, which ironically has its Hub office in the Prudential Center complex, as well. Although its national heft would make the firm appear to be a likely candidate for the Gillette package, the firm’s Boston chief Timothy Halloran said last week that Insignia/ESG is “not participating” in the competition.

“I’m not sure it made a lot of sense for us,” said Halloran, who said it would require an extensive capital investment to take on such an assignment. Insignia/ESG does have an extensive property management division, but Halloran said he believes the Gillette RFP is looking for an in-depth level of services that extend beyond property management duties.

While Klarfeld would not discuss specifics, sources said Gillette is seeking a firm to provide a cadre of real estate expertise, most likely including leasing services, asset management and investment guidance, helping the firm to determine which properties make sense to retain going forward.

Among the firms that likely would be able to handle the Gillette requirement are CB/Richard Ellis, Trammell Crow and Cushman & Wakefield, all of which have a local presence. Calls to CB and Cushman & Wakefield were not returned by Banker & Tradesman’s press deadline, while efforts to contact Trammell Crow officials were also unsuccessful. One source insisted, however, that all three firms have submitted proposals and remain in the running.

Spaulding & Slye Colliers, another firm with an extensive corporate services team, is also keeping mum on the situation. “I’m aware of the competition, but cannot comment on whether we are in the mix,” is all spokesman Steve Steinberg would say when contacted last week.

Klarfeld said Gillette’s real estate cost-cutting program is part of a larger company undertaking known as the Strategic Savings Initiative. Begun nearly two years ago, the program has already yielded tens of millions of dollars in savings for Gillette, Klarfeld said. The 13 commercial real estate companies were invited to look at Gillette’s international leasehold properties and craft ways in which costs could be reduced.

“We will review the findings and those with the most potential will be asked to come in and [further define] their submissions,” said Klarfeld. “That’s where we are right now.”

Cream of R.E. Companies Vying for Gillette Contract

by Banker & Tradesman time to read: 4 min
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