In an interview with Real Estate Business Review, Alison Vallot, Associate General Counsel for Real Estate and Director of Real Estate and Sustainability at Wayfair, shares her insights on navigating changing business priorities and market volatility to maintain efficient operations.
Alison Vallot has built a distinguished career in real estate law, shaped by her earlier stint at WilmerHale. Since joining Wayfair in 2017, she has significantly contributed to internalizing the company’s logistics network and establishing the company’s real estate legal function.
Vallot’s experience and leadership have helped her grow at Wayfair and she now balances legal challenges with roles in sustainability and office and industrial real estate, while actively supporting diversity and inclusion initiatives.
Building from the Ground Up
I joined Wayfair, an e-commerce home goods company, in 2017 when the company sought to build an internal real estate function. The company’s legal team then consisted of just three people. My role at the time was to handle the real estate legal implications as we aimed to internalize our third-party logistics network, reducing reliance on external providers.
Over the past seven years, I’ve grown within the company and became the Director for Real Estate on the industrial and office side in January. I have also taken on the role of Director for our Sustainability team. Wayfair’s global real estate function
"We try to understand business needs early to formulate alternative real estate strategies like acquisition, renewal and expansion in parallel. It helps us provide stakeholders with multiple options and aligns our real estate strategy with business changes"
spans the US, Canada, Germany, the UK, Hong Kong and Shanghai. My responsibilities include everything from site selection and acquisition to portfolio maintenance, ensuring our efficiency as a one-stop shop supporting all things real estate on a global scale.
Adapting Strategies to Meet Dynamic Service Demands
Wayfair is an innovative, nimble company that goes the full mile when it comes to implementing initiatives that are favorable to the customer. This often necessitates quick adjustments to business initiatives that impact our real estate demands.
For instance, our introduction of white-glove delivery services required significant changes in the existing real estate spaces to accommodate the new logistics functions. Determining its feasibility within the existing infrastructure and deciding whether to explore relocation has been both a challenge and an opportunity for us.
Ensuring that we are responsive and flexible on relatively abbreviated timelines is a prominent challenge for Wayfair and other players in the e-commerce industry.
Balance is Key
At Wayfair, we focus on deep integration with our teams to gain early insights into their priorities and initiatives. This is crucial in reconciling Wayfair’s nimble and dynamic ethos with the more slow-paced, longer timelines associated with real estate operations.
So, we try to understand business needs early to formulate alternative real estate strategies like acquisition, renewal, and expansion in parallel. It helps us provide stakeholders with multiple options and aligns our real estate strategy with business changes.
Creating Strategies that Matter
Adapting to the real estate implications of changing customer demands is one of our fundamental responsibilities. For instance, the surge of online shopping during the pandemic has led to higher real estate demands to accommodate the increased logistics volume. Since the normal flow of products has been reinstated, we are now working on reassessing our real estate footprint to use space efficiently.
This involves exploring short-term strategies like subletting currently available space while preserving optionality for long-term utilization. Recently, we subleased one of our fulfillment centers to reduce rental expenses during a period of lower volume. This approach is an example of how we balance our short-term needs with long-term flexibility, ensuring economic efficiency while anticipating future volume increases.
Understand and evaluate the market
Although the market is difficult to predict with certainty, we expect a gradual softening of the industrial real estate market, leading to more balanced rental rates that benefit both the tenant and the landlord. Wayfair’s strategy to navigate the volatile macro economy takes this insight into account and involves negotiating shorter-term deals to avoid locking in prices during uncertain times. The goal is committing to necessary assets on timelines that align with our market expectations.
Insights for a Successful Career
The key is to understand the business and your role in it. As a member of the industrial and office real estate team at Wayfair, I need to realize that although real estate is an integral part of our success model, it isn’t the driving force behind what we do. Our aim should be to ensure the real estate is aligned with the business’ direction and to avoid getting ahead of the stakeholders.
This involves asking questions, understanding business priorities and deciding on strategy accordingly. My advice to peers is to be open, know your business and always put the business priorities first.
