148. The Future is Flexible: Attributes of the successful flex office operator
Resources Mentioned in this Podcast:
Avison Young Website (COVID Resource Center)
Everything Coworking Featured Resources:
Masterclass: 3 Behind-the-Scenes Secrets to Opening a Coworking Space
Creative Coworking Partnerships: How to negotiate and structure management agreements from the landlord and operator perspective
Transcription
148. The Future is Flexible: Attributes of the successful flex office operator
00:00:01 welcome. I am video conferencing today with Charlie Morris, who's the practice leader for the flexible Office Solutions team at Davison. Young and I have no Charlie for a little while of were not connected on a podcast or had a deep conversation about what's happening in the flexible office space. So I'm really looking forward to today, and I think Charlie's perspective will be really helpful,
00:00:42 as we're thinking about kind of what's next in the flexible office industry. So, Charlie, thank you for joining me today. Thank you for having me. So Charlie and I were just discussing the joys of working from home. He has three kids at home. I have one kid in two dogs, so we're hoping everyone behaves, but you never know. So, um, well, let's talk about. I love to hear your share with the audience because I know a little bit about your background, but your background and kind of you've been in various aspects of the flexible office space and now you've landed it Avis and Young.
00:01:14 So it just loved here a little some details about you and your background, and then we'll kind of dive into some details. Great. Eso started my course real estate career as ah 10. A rep broker was in that world for 12 years in your stereotypical up brokerage practice. Candidly, I began to lose my passion for traditional brokerage as we know it. Um, you know, over the past 57 years, largely because I was paying attention to some of the quote unquote disruptors that are out there to use a buzzword that entail,
00:01:48 I mean, includes not only flex office, but the rise of prop tech as we now know it. And there's obviously certain pieces of that. That's, um we're gonna be disruptive in various forms and fashions to the brokerage world. And candidly, I felt from the tenor upside we were gonna be the first to be, um, yeah, disrupted on that or dis intermediate in some form or fashion. So I really decided to kind of shift my focus. And while I still did it within with my broker chat on really started paying attention to prop tech flexible offices.
00:02:21 We know it did various projects over the years within each of those respective engagements, um, did a number of things with liquid space for about two years, while Eddie Vinson Young was my last broker job. I guess I should go in reference. After transacting various deals and engaging with institutional owners with liquid space, they asked me to come in. House was in house with liquid space for about 18 months. Um, which, uh, came to an end. Let's see June of last year and candidly,
00:02:53 I decided to move on from liquid space for a couple reasons. One, um, it was a product based offering. And while I very much believe in, you know, the technology in the marketplace and the aggregators that are out there we were pushing a square peg in a round hole in a lot of situations, and I wanted to figure out a way where I could be agnostic in terms of kind of how to engage with my relationships, clients, context that are out there to be able to be,
00:03:21 you know, service space, not product based in the overall solution that brought me back to I guess I should say I was being recruited by various prop tech or even flexible operators to become part of their practice. And, well, I was gonna be in the same bucket where I was pushing a product or a certain solution, Um, and could not be truly agnostic. I called Mark Rose CEO of a vis India. Um, and he basically explained to me that he was not mentally and financially committed to flex office as a driving force for the future of real estate and asked me to come back into They've seen young family.
00:03:59 Eso came in in August of last year and spent the better part of the end of last year and of educating educating my old company about what they didn't know was out there, um, and building up the base infrastructure about what our team was coming to be. So that's kind of the high level background. Yes. And even building your team as well. So, did this team just not exist before you came back in August? Structural enough? Um, obviously, there was various levels of engagement within reflects sector within a why even myself.
00:04:33 Prior to me, liquid space and dance. Other professionals that engage probably more so from the occupier side, Um, you know, helping get occupiers or into, um, you know, flexible operator spaces. And with a few different examples of our professionals that were engaging with the operators in terms of expanding their portfolios, et cetera, and even from the agency side transacting leases with some of these operators. Historically, but no true structure had existed prior to this. Um, you know, until August of last year.
00:05:08 So you've brought to know you have a team said Giovanni's on the team now and his you know what I realized? I don't think I've ever said his last name because everyone just note he's like prints. Right? Require a last name ISAT pelt, Palavicini, Albasini, pelvis, seaney. Good. Okay, um, and then Michael Kloppenburg. So you know folks that I know so exciting. Teoh, bring some folks in that come from kind of other areas of the industry and develop a team. So all the brokerages air kind of developing,
00:05:40 you know, some sort of internal framework. Teoh work in the flexible office space. Can you talk about kind of what is Avis and Young's philosophy and approach to serving your constituencies like, who do you serve and that this might take a minute. So go ahead. Because he talked about sort of, you know, you're less passionate about sort of fitting the one product to a solution. So it sounds like, you know, there could be many solutions to how you're you're serving, but I love just,
00:06:08 you know, give us an overview of what your team does and who they serve and how they do it. Yep. So I guess I should go and, you know, share the fact that, you know, as part of coming in without any tree structure, Um, you know, Mark in the C suite if, you know, basically gave me a lot of leeway to educate them about You know, how and why we needed to build something that wasn't, in fact, different. Because you're right.
00:06:34 Um, all brokerage teams and other entities out there have some level of flexible solution not going to deny that, But what it was that we wanted to deliver that was different to me was the most critical piece of this. So, in short, what we've ended up doing is building out in our mission is to build a world class, flexible, office consultative and transactional offering focused on the entire flex lifecycle, which includes three main verticals. It's the occupier community, the operator community as well as the institutional owner community.
00:07:08 And all of this is additionally supported by prop tech and spaces, service support partners and different forms and fashions. So it's taking that holistic view, and, um, making sure that we have it seemed that is 100% committed to flex. Um, in these respective roles, and being able to tap into resource is available for being a part of a large brokerage company, which is now the largest privately held brokerage company in the globe. Um, so I joined a person young specifically because I saw it as an opportunity to,
00:07:44 you know, engage with a company that could provide adequate resources and capabilities beyond even what we're looking to do. Because there is no one stop shop. There is no one ultimate solution, no matter how you slice it. And if seen, young is set up in a capacity because we're not publicly traded that we can, you know, take certain initiatives differently than are publicly traded. Um, counterparts in this world. So, you know, we've chosen to take an agnostic service based offering versus a product based offering that is one of the core differentiations you're gonna hear from us over the years to come for especially your content constituents here on this girl.
00:08:26 I'm gonna go and put this out there. We're not gonna have our own operator engagement out there. You will never find a Hana or Indigo or various other things you're hearing from some of our respective competitive set out there. Instead, we're taking that agnostic service based approach versus product based approach. And we believes that's gonna position us so that we can be unbiased and candidly not have any perceived conflicts that may come with that. So that's kind of like the high level thesis as to what it is that we're doing.
00:08:58 And instead of taking a position from a local local regional perspective or even practice area perspective, I e. Occupier solutions or whatever the case may be, we're taking the holistic view so that we're not going to be jaded by anyone local or practice piano. Instead, it's one piano that we can be ableto satisfy the needs. No matter where What's, um, that requires? So can we do an example? It can either be pre pre Cove in 19. Since we're kind of in the middle of that or post,
00:09:35 how might you serve each of the constituents or each of the verticals, the occupier operator or institutional owner? Yeah, I mean, so we just kind of start there in terms of kind of, You know what it is that we built in terms of our core team. Um, you mentioned two individuals right there, which obviously people listening to this are probably familiar. Giovanni Palavicini. His background is specifically engaging with the operator world very much a social influencer as it relates to this space. And I will put him up against anybody in terms of the overall,
00:10:10 you know, breadth and depth of knowledge and contacts in this market. So he, along with Michael Kloppenburg, the other person that you mentioned his background coming from car companies and car work places. As you know, their own flexible offering. The hat can bring in a combination of resource is, and Michael and Giovanni are focused respectfully on Michael from the institutional owner engagement. Giovanni's specifically from the operator perspective. But let's you know, I think we all know Everyone on this girl realized these 22 worlds air coming together as one more so than ever coming out of this.
00:10:49 So that is how we're supporting the operator and ownership communities. 1 may be the driving force, the other maybe the driving force. But we have to have those two cooperating in the grand scheme of things and from the occupier side we've got about, let's call it 5.5 because we've got one person that plays multiple different roles for us. But from the occupiers side, we've gone after people that have been serving in some form of enterprise sales role specifically for the occupier community. And these people come from other flex brokerage organizations and or,
00:11:24 um, you know, some of the large operators that we know of in some form of enterprise sales capacity. And in this model now, instead of again on Lee having a certain product that they can bring to the table further occupier clients, they now have the world is your oyster and being able to find that right fit that specifically fits their specific requirement because you know,
00:11:45 it's, You know, a lot of people have a perception that there's only 1 to 5 different operators out there that can satisfy these goals.
00:11:54 And there are thousands out there. And most people just have this perception that it's only the name brands that have marketing budgets and or media relationships.
00:12:06 And some of that has been good, better ugly. Um, you know, in recent months. And it's being able to be in a resource to make people realize there's way more out there than is commonly referred to,
00:12:18 not only for our core clients that even for brokerage professionals, um, you know, people know what they've read in the newspaper,
00:12:25 and that's about it in our world. Yeah, it's a great point. Those of us who can live it day to day sometimes fall into the trap of thinking.
00:12:33 Everybody knows what we know, which is not the case, far from it. So tell us, you know your perspective.
00:12:42 I was joking before we started about kind of all the activity on LinkedIn. And, um, I love to follow you and Giovanni because you have a very optimistic perspective of coming out of the other side of this,
00:12:51 although acknowledging things will look different. Um, can you talk about kind of, you know, what are some of the projects you think you'll be working on as the transition starts toe happen where folks go back to work like occupiers in particular.
00:13:07 What do you think they'll be looking for? And how will you help them? Yeah, I mean,
00:13:12 So while you may and appropriately do see the fact that we do have an optimistic stance on where things come Yes,
00:13:20 just like everybody else. We've had to hit a little bit of a pause and or we've missed out on certain projects that we were actively working on heading into this With that being said,
00:13:32 I joined Davis and Young, and we laid out it seemed that we feel is gonna be differentiated a ZX part of the change that has already been percolating in this world.
00:13:43 And I think that, you know, I choose to take the glass half full approach as to what?
00:13:47 This, um, you know, prices has let us all into. And I think at the end of the day in the flex world,
00:13:56 this is gonna end up being a very much a positive relating to what it is that we all believe And,
00:14:02 you know, see, is the future of commercial real estate and that this is gonna be a tough period for a lot of individuals within this,
00:14:11 um, you know, within our world. But at the end of the day, those that can come out of this are gonna be well positioned for great success.
00:14:18 Because change is inevitable, growth is optional. And for that occupier side of what you're talking about, I think we're gonna finally see that the occupier community is going to realize that what we've been preaching to them as the why is actually here.
00:14:37 It's upon us because we have all just entered into the largest global remote work experiment ever. Brands. And there's gonna here we are all doing it exactly.
00:14:47 And there's different pluses and minuses to a remote work strategy. And, you know, at the end of the day,
00:14:54 those that choose to adapt to change are going to be positioning themselves for success. Those there revert back to the status quo,
00:15:01 are too mean destined to be passed or potentially go go dark in the future. If we don't truly embrace the change that is upon us.
00:15:12 Do you have any sense yet? May be too early around kind of when occupiers start thinking about getting out of the work from home requirement.
00:15:21 Where will they go first? Um, you know, you're not going to hear me making a blanket statement.
00:15:28 No crystal ball. I will go ahead and say that. You know, um, let's call it mid summer.
00:15:35 Um, realistically is kind of what we're hearing as the best case scenario, Um, for the most part.
00:15:41 So we still have a few months? Yeah. Um, before there's some level of engagement back to even a somewhat state of normal,
00:15:50 that state of normal is gonna be way different. But we believe that, you know, these last few weeks month have been just a time of one survival.
00:16:02 People have been making tweaks, modifications, figure out how to sustain their businesses in this period. And there's been a lot of tough choices not only in the flexible operator world,
00:16:12 as we well know, but even within large corporate ce. And, you know, institutional owners have been making some tough decisions about you know how to keep their businesses going and from this.
00:16:24 We expects, you know, a, um, period. And it's we feel for the past week or two it's really started to begin to shift where people are now strategizing.
00:16:34 And I think the month of April and may be into the first part of May, depending on the scope and scale of,
00:16:41 um, you know, that person's portfolio or that company's portfolio were starting to see people laying the ground work anyway for what comes next.
00:16:50 Yeah, and there is no perfect answer. It really depends. And we have to come up with the spokes solutions Ford individual company,
00:16:59 based on where they were, where they are in candidly, where they want to go more than anything.
00:17:04 And those that really want to Embry of the ones that were excited to engage with. And, you know,
00:17:11 we've been very you know, um, excited about the fact that people are now acknowledging that the change that we know has been,
00:17:19 you know, bubbling is now coming to a boil. And, you know, things were about to really begin to shift across the traditional and the flux pools.
00:17:29 So with a glass half full outlook, we think the demand shift will be there. Do you have some sense as to kind of what the requirements will be at the at the location level?
00:17:41 So if an occupier saying, OK, we're gonna use inflexible space, whether that's, you know, a service office,
00:17:48 coworking space or, you know, a more flexible option than a landlord's providing like devotee sentenced. Okay,
00:17:54 well, what does that look like? Like, what are their requirements gonna be from a like health and safety and D identification.
00:18:01 And again, I know we're just starting to think about these things. So I'm just curious. Whatever you know you've thought about Yeah.
00:18:07 I mean, one thing definitively we've been thinking about ends were doing our best to try to not be tunnel vision on anyone solution.
00:18:16 It's We have to acknowledge that some companies were more for thinking and engaging influx of office more than others.
00:18:23 Those conversations will be a little bit easier. They're certain companies that have that core, what we call core fixed long term leases as their main strategy today lets all acknowledge the fact that those air not going away there is no if ands or buts about that.
00:18:39 The whole world is not going flexible Greyhound People in our world would like it. Yeah, glasses in that.
00:18:45 That full? Yeah, Exactly. I mean the, you know, core fixed leases still makes sense in various situations.
00:18:54 Flexible workspaces. Whether that is coworking executive suites, where we call agile, um, Swedes, team sweets,
00:19:01 these type deliver bles are going to be critical for certain pieces of the respective portfolio management strategy. And let's also be willing to admit that work from home is not gonna go away either.
00:19:12 If anything, that's going to continue to expand. Um, I think obviously everyone's a little bit different.
00:19:19 You and I have dogs, kids, various distractions that we're all appealing to. With that being said,
00:19:24 I now acknowledge for the first time that I'm able to work from home in a better, more productive manner than I candidly thought I could in terms of doing it full time.
00:19:35 So we have to admit that each each of those three pieces are going to become part of that portfolio management strategy in the percentage allocation to each of us will vary.
00:19:45 Um, you know, some will be more swayed towards the, you know, core fix lease. Some will continue to be a more,
00:19:52 um from that work from home. And I think you and I will agree that, you know, the flexible workspace world is the perfect hybrid between the two.
00:20:00 That we can tap into one or the other of those and be able to add value to handing on the scope and scale up.
00:20:06 So that's kind of my first point there relating Teoh our world specifically in terms of some of the changes that we first see coming.
00:20:15 You said it best of the beginning of this. I think we have to be honest, we don't know.
00:20:19 Um, fully there is nobody that knows anyone that says they do is lying through their teeth. Um,
00:20:27 the what is gonna come from this is still too early itself, because candidly way need the market to tell us what it is that we need to be to satisfy what their needs are.
00:20:38 Obviously, that is hard to swallow or hurt little swallow for those that have an established business that has worked to date.
00:20:47 But there's gonna be tweaks modifications needed. Within each of these respective offerings are locations to satisfy what the new state of normal is gonna be,
00:20:58 um you know, my perspective, and I think you will agree with this is supply and demand is about to shift for the first time ever.
00:21:07 I would say that as a whole, supply has been driving demand for a while Now, a lot of the supply that is out there has been going up to the same list of groups and basically,
00:21:21 you know, poaching. And it's actually been a detriment to what we're trying to do instead of going after the new groups.
00:21:28 Um, some of that supplies candidly, not gonna make it. Yeah, those there certain people that are in what we call survival mode that will be shutting their doors.
00:21:37 I don't think there's any fact that that's gonna happen and even those high growth companies over the past 35 years.
00:21:47 Let's call it there is a definitive pause that's about to happen here, and some of those even will be coming back.
00:21:53 Um, you know, are not go live, at least in its current form. So demand. While we've been talking about it,
00:22:00 we see rising for the first time. Demand is gonna outweigh supply, and you know it's gonna lead towards Ah,
00:22:06 lot of you know, you know, understanding about what else out there. What's that right? Combination of solutions that fit that demand.
00:22:14 And in time, that supply will catch up and hopefully be better suited to support. The demand uses,
00:22:22 um, and requirements needed for the future. Yeah, a lot of good points. I mean, you sort of make the point.
00:22:29 It's a little bit of an evolving ecosystem, and it'll be hard to predict exactly what the ecosystem will you know.
00:22:37 There will be some demand requirements and 50 things eat the requirements and will try to predict some of those things.
00:22:44 No, for your point. Strategizing Like what? Well, occupiers, be looking for medium Glenn, and I'm just gonna make one point on that for your collective audience.
00:22:55 Yes, there's gonna be changes needed within the flexible world. A lot of those same changes are going to occur within the traditional or fix world as well.
00:23:06 Um, you know, I'm sure everyone is probably read about cleanliness being the, you know, new top of it's gonna be out there that exists across both worlds.
00:23:16 Yeah, identification standards. We know that there's been a lot of talk about that relating to being a negative towards our industry on DS.
00:23:25 Let's be honest. A lot of that is true, right? In various forms of fashions, Um,
00:23:31 certain companies that have based their financial models based upon, you know, just crazy density standards there candidly,
00:23:39 not gonna be able to survive in the current form without really updating their financial models. Because that's just not gonna be sustainable coming out of this.
00:23:48 Especially not for the next 12 18 months prior to vaccinations coming to play, you are not going to feel comfortable,
00:23:55 um, elbow to elbow shoulder dividers. Yeah. So, you know, I think those operators that have been building out their space in a more realistic identification standards,
00:24:09 uhm you know, versus getting to the 30 50 square feet per person, um, you know, within their those are gonna be the ones position for success along with those that have,
00:24:19 you know, relied on more private, um, you know, sweets and or team suites within their respective location.
00:24:26 Um, and that's another thing that I think that public perception wise about our industry is yet to candidly been acknowledge people.
00:24:35 Still, the stereotype that co working as, um you know, we know it is all open plan.
00:24:40 Yeah, that is That is not what she totally No, I don't. There was an article in the Wall Street Journal today,
00:24:47 and I was like, Come on, have you been in correcting this lately? I mean, they were somewhat,
00:24:52 I think, commenting on some of the right more dense models that they see, but not I think they were still kind of focused on the open plan.
00:25:01 Peace and right you And I know, I mean, in general, the more hybrid model with a strong focus on,
00:25:08 you know, team space and even team spaces will need to be rethought, right? I ended up.
00:25:12 Yeah, I will tell you. My offices in Palo Alto are perfectly have been perfectly satisfactory for my You know,
00:25:20 tech start up teams will probably no longer fly rent. Yeah. Yeah. When? If you have eight people and that seems sweet today at best,
00:25:29 maybe four in the future. And does that financial model right accents? Or how do you modify the quoted rates into the future and or will people willing to pay for that?
00:25:39 And let's be honest, I don't think anyone fully knows? Um, yet. But you know, all that dense vacation,
00:25:46 though, does translate to the traditional world as well. Because, you know, this is where our industry deserves a hell of a lot of credit.
00:25:54 And let's be honest, we have to give We work a lot of credit for this. The traditional workplace strategy of corporate America has been shifted due to what has happened within the flexible world.
00:26:06 And a lot of those locations have gone more dense themselves. So they're gonna also be rethinking kind of what they have,
00:26:15 what they have to modify for the future, to create themselves are set themselves up for success. And,
00:26:22 um, you know, in the same ways that we are in our world, so it's it goes both ways.
00:26:29 Since you have an interest in prop tech. I'm curious. Do you think I'm really curious about timing?
00:26:36 Jacob Bates posted, uh, an article on lengthen or just kind of an opinion piece. I guess I'm lengthen this morning and kind of mentioned some of the,
00:26:44 you know, technology that will likely emerge. Teoh support the health and safety standards, you know, touchless access and all that,
00:26:53 you know, avoiding touching things basically, E. I mean, how far away do you think that is?
00:26:59 Do you think we're sort of in, like, an analog mode of like, figuring things out for a little while after re entry is possible.
00:27:07 And then the technology kind of back fills that or any crystal ball on that one. I mean, in short,
00:27:14 I think that all of you know what you mentioned Jacob Sedated and others have stated around that, Um,
00:27:21 yes. I think that again, beyond the flexible worlds, you know, would go to the grocery store,
00:27:25 think about how much stuff we touch for checking or even looking at stuff. I was there less because it stop touching things I had to tell myself.
00:27:33 Duck, don't touch the cheese. Just look at it s Mihailova perspective on this. Yes, um,
00:27:41 you know, technology as we know it will continue to evolve. Um, you know, buzz are phrases that are out there.
00:27:47 We all knows innovation is born out of recessionary periods. Um, we're gonna Seymour, you know, unicorns that come out of this period,
00:27:55 just like we saw come out of the last period, um, ends. There's gonna be various service's and deliveries.
00:28:02 Um, that are gonna be very applicability for what we've seen in the past and Canada. What we don't even know is gonna be coming in the future.
00:28:11 Um, one thing relating to the prop tech, um, and Spaces, Service Support Partner World. Um,
00:28:17 I think we can also admit, though, that even what has been available to date, not every flexible operator or institutional owner has fully leveraged.
00:28:26 What is here and out there? Um and I think it's, you know, taking this time to rethink what is out there.
00:28:34 What is that? Right? Combination of resource is service's et cetera that we need to deliver to set ourselves up for success.
00:28:41 Um, and you know another piece on that props Exide, You know how these respective entities grown. It's via,
00:28:50 you know, the V C. Big private equity investment. These people are gonna be licking their wounds coming out of this.
00:28:56 A lot of the investments they have made will go bust there and survival mode themselves across some of these.
00:29:02 So we expect a drying up of new investment in that for the immediate term. And so people can kind of figure out their current state of,
00:29:12 you know, from the VC private equity world. What is there? You know, fun look like coming out of this.
00:29:18 Where do they need to shift their focus around? What? They're investing it. Um, I think the operator world needs to acknowledge that,
00:29:26 you know, with a few exceptions, there's gonna be very little access to some of that growth capital that has existed.
00:29:33 And we owe it to the operators owe to themselves to could be able to go prove out how they can do this on their own for a period of time anyway.
00:29:41 And those that can position and lay out a financial model that comprise that they've got a, um, want a proven model discipline model.
00:29:51 And actually, you know something that they can present to some of these growth capital partners. Um, you know,
00:29:58 they're going to be set up for success, but there's gonna be a higher level of scrutiny for the future for flexible operator investment,
00:30:05 along with prop tech investments. Least for the immediate term. Too much uncertainty for the growth at no cost.
00:30:14 Yeah, I think one of the, uh, questions I had for you is sort of what you know what is a successful operator look like coming out of this.
00:30:23 And I think you've answered much of that. I mean, to me, it's it looks like, you know,
00:30:28 an operator that has some enough financial stability without, you know, the investment at at any cost that can kind of make it on their own for a while.
00:30:38 Even if that stunts growth. And then, you know, to your point an operator that can survive with a less dense model.
00:30:47 And, you know, that may take some time. Teoh workout. Um, you know you can they retrofit existing locations?
00:30:56 What does that look like? Does this only, you know, work with the management agreement or more favorable lease?
00:31:02 Yeah, there may be some. And then the technology piece. I mean, I think you're right.
00:31:06 There are a lot of operators who are, you know, still kind of fairly technology light and the ability to invest in.
00:31:13 You know, sir, what's necessary to make the space is user friendly will be a requirement as well.
00:31:19 Correct? Yeah. I mean, it's on that note. I mean, it's all about having a strong foundation for their business model.
00:31:25 You know what? That pro former. Their bounce she looks like, um, Well, very. But you know,
00:31:30 you have to really put a fine tooth. Um, you know, come out there and make sure that we're looking at it appropriately,
00:31:37 identifying who their ideal customer base is and how to identify the, um is going to be critical, because again,
00:31:43 everyone's been competing for that same customer base for a while. Yeah, there's gonna be a new traunch of customers out there on.
00:31:50 And how do you make sure to position yourself to go and appeal to that group? Um, it's also just stepping back and again rethinking what you're doing in the realm of hospitality experience management.
00:32:03 You know why there's even a need for flex, um, ends how you deliver that and, you know,
00:32:10 go back to that point. It's were all about community networking collaboration, et cetera. But what does that mean within your organization?
00:32:17 What is that culture that you wants your prospective clients or members to understand about? Um, you know what differentiates you in your community?
00:32:27 Let's be very honest. A lot of people claim they have a community, a big old um, and those that have you know set themselves up as true leaders in that world are gonna be the ones that come out ahead at the end of this.
00:32:40 And you know, it may Segway into another part of this. That strong relationship with landlords now more than ever is paramount.
00:32:48 Those that just took that arm's length. Um, you know, agreements or partnerships with their owner. You signed your lease and you never talked to him again.
00:32:58 Um, those are going to be set up for failure as far as I'm concerned. And, you know,
00:33:03 we've already seen the trend happening from going to the straight lease into the management agreements. Um, let's be honest.
00:33:11 Not everybody is set up on DS. Don't necessarily have the balance sheet or proof of concept. Yet Teoh engage in those management or partnership agreements with the owners.
00:33:21 But even those that have to continue down the least path for the foreseeable future need to figure out how to not compete with but partner with their landlord,
00:33:30 even if they are in a lease situation. Because there's a lot of, um, you know, perception out there that our world is directly competing with what the institutional owner,
00:33:42 their agency reps. You're out there doing so we have to figure out how to work together versus working separate.
00:33:48 So that's gonna be critical in the future. How do How do you come in from your vantage point?
00:33:55 See the owners role shifting? Um, you I think you mentioned in one of your articles. Kind of The owner is getting a little bit more into the driver seat in terms of their own flexible offering.
00:34:06 What do you think that might look like? Yeah, I mean, so Teoh, what we just chatted about,
00:34:11 um, in the post failed AIPO from we work last fall, I think we all began to see a dramatic shift from that least towards management agreement on different forms and fashions.
00:34:24 We're going to continue to see that even more so coming out of this, especially for those that are going to be given their space back.
00:34:30 These landlords are gonna be left with a, you know, a space that they've gotta feel what to do with.
00:34:36 Yeah, I don't think that most institutional owners are even willing or want to take this on themselves, so they're gonna need a partner to be able to help manage this,
00:34:46 um, you know, on their behalf and operate this on their behalf. Um, so my perspective in terms of kind of landlords hopping of the driver seat falls into,
00:34:57 you know, some of the trends we've already seen coming where At least it's just that it's an arm length arrangement.
00:35:03 There's little to no partnership with that owner, But in this Managements and Javy Partnership agreement world that we're seeing that is obvious.
00:35:12 Um, that's the ownership, you know, oftentimes more the driver of whatever that is. And whoever that operator is needs to demonstrate that this is not a separate entity.
00:35:23 This is part of that asset ecosystem, and it's a true amenity, and it could be a check box.
00:35:30 Every building is gonna need tohave in the future in terms of being able to deliver a flexible experience within that asset.
00:35:36 Um, you know where I make a line that I get made fun of what might seem quite a bit saying This and some people in your,
00:35:45 um, respective audience may not like this, but Coworking is flexible, but flexible does not necessarily mean Corky and the sharing of things.
00:35:54 Yep, and we have to acknowledge the fact that Coworking is a piece of it, and we've all heard some of the stats from capital markets or institutional owners that have said they're willing to commit up to plus or minus 20% is kind of like the general of thumb today.
00:36:09 But that 20% is not all coworking, right? It's, you know, let's call it 10% co working 5% some form of what we call agile sweets.
00:36:18 It's a new way of thinking about spec sweets that the landlord hasn't been in control of. Sometimes it is in conjunction with that flexible operator in some form or fashion.
00:36:28 But it's also a combination of that amenity space and, you know, conference rooms, meeting rooms, just all of the respective components within that some of that is in conjunction with some of it is,
00:36:39 um, you know, in lieu of where it's operated separately, and we need to see all of this come together as one,
00:36:46 and that's one of our core drivers for the institutional owner community is don't let yourselves be fooled by some of some of these operators air out there acting like they can do it all.
00:36:56 They're pushing certainly for them. Sorry. All right, Louis, come here. Not that exciting. Yeah,
00:37:11 somebody's walking by. Maybe we re over it. Okay. Sorry. Remember what you're talking about? Uh,
00:37:30 generally Okay? Yeah. Our perspective is that the, you know, institutional owners that are out there acknowledged the fact that they need to bring some form of flexible operator within the realm of their overall.
00:37:46 It's a management strategy. What we call again that core plus flex Asim management strategy. And from my perspective,
00:37:53 the winners and the operator worlds are gonna be those Aiken deliver and truly partner in a holistic view, understanding what the landlord's goals and objectives are,
00:38:04 how they fit into bad mold and how they can collectively dio in position that asset ends their respective coworking operation for success in the future.
00:38:15 Yeah, it's a good reminder that that's a competency that needs to be developed regardless of what's happening. Kind of,
00:38:21 you know, inner, immediate environment. And that's one of those things that will continue to evolve. But I also wonder if some of that will advance a little bit because we may need each other even more today,
00:38:37 right? Like that sort of relationship and what people expect out of their workplace and even operators needing landlords and sort of vice versa to sort of figure out how to create that right workspace.
00:38:51 And to get that, you know, the breakdown of the 20% right? Yeah, that's correct. And to me,
00:38:57 that's where we have to look beyond whatever our particular offering is our particular service, and it's truly integrating all of those respective components needed.
00:39:08 And each asset each owner is gonna be different in terms of what they want and need, um, to deliver to differentiate their asset for success in the future.
00:39:17 So this is an opportunity for us to really rethink how the operator world is working in conjunction with not in competition with the institutional underworld,
00:39:28 because both parties need each other. So in sort of wrapping this up, if you were to to give some advice to maybe operators and,
00:39:40 uh, owners in the next over the next couple of months, what would you suggest? They be kind of working on?
00:39:48 What's what sort of what are what's the work to be done during the transition face. I think it's too.
00:39:55 You know where I hope most have already begun to do this. It's taking a step back relating to what has worked in the past and instead refocusing on what can or should,
00:40:06 work in the future. Um, you know, it's hard whenever you're been tunnel vision relating to your own respective business plan today.
00:40:15 But everybody, whether there have been uber successful in the past, is rethinking what they're doing and how to position themselves for greater success in the future and or even survival in the near term.
00:40:28 So we have to be cognizant of you know what, what's working, what's not. And, you know,
00:40:35 that's one of the reasons that we've built our team the way that we have. We want to be a resource to the entire flexible office economy to understand what we're seeing,
00:40:44 what's working, what's not. And even if it is, um, a small piece of advisory or a and or transactional components rethinking the way that you've done it,
00:40:54 um, you know, reach out to people that are outside of your current operations and understand what else is out there.
00:41:02 There may be little nuggets here and there that you can then use to begin to set yourself up for future success because,
00:41:11 you know, again that world is share, our world is changing, and those that can position themselves and demonstrate their role in the flex boss economy in the future have a bright future ahead of him.
00:41:25 Yeah, and your group is well positioned to sort of see what what shifting, what's working, what's moving kind of among your constituencies.
00:41:34 And I think to your point, you know, there's There's a lot of value to that agnostic hat that you're wearing and you'll you'll add a lot of value to each of your constituents playing that role.
00:41:45 Um, Charlie, how can people I will certainly linked to your linked in profile? And Charlie's fairly prolific on Lincoln?
00:41:52 Uh, any place else I should help people find you. Yeah, I mean, so emails, charlie dot Morris at Davison young dot com.
00:42:02 My cell phone is pretty only phone, so I don't mind putting it out there, but I would say,
00:42:08 you know, um, you know, I would start with LinkedIn, um, and reach out connect with us.
00:42:14 Um, were, as Jamie has said were actively, I'm engaged and putting out different constant pieces, creating our own constant pieces.
00:42:23 Um, I will also go and say on behalf of a person young, we put together a cove in 19 resource center on our website that you can see certain pieces that our team is put on there to date,
00:42:35 relating to short and long term implications on that we're seeing in the flexible office economy. Plus, it's good to understand what I was going out there in the traditional world as well.
00:42:45 Um, looking beyond our space to figure out where you can take advantage of that. So please go and,
00:42:52 you know, earmark that there should be more pieces going out there on a semi regular basis and, you know,
00:42:58 reach out via lengthen. Um, I'm going to see those private messages, but and or my email Charlie Dunmore saves in young dot com and happy to connect and see what we can do to collaboratively go through and set ourselves up for success not only as an individual company but candidly as a sector,
00:43:17 because now is our time. Wonderful ending. Thank you. Charlie and I will link to Charlie's contact info in the show notes and the cove in 19 resource that you mentioned from the A Y site.
00:43:29 Charlie, thank you for your time today.
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