Working Capital The Real Estate Podcast
The Office of the Future…with Sheila Botting|EP44
Mar 10, 2021
In This Episode
Ep. 44 Sheila Botting
Sheila Botting recently joined Avison Young to lead the Americas Professional Services practice, and is a member of Avison Young’s Global Real Estate Executive. Through her executive real estate career, Sheila has led a number of multi-disciplinary real estate teams and assignments across the industry with owners, investors and corporate occupiers alike, earning the reputation as one of the “go to” commercial real estate advisors across the Americas. For Avison, her mandate is to accelerate growth across the Americas for our professional services platform including corporate real estate, consulting, project management, valuation and real estate & infrastructure advisory. The firm’s recent integration of GVA in Europe provides a substantive platform from which to accelerate Americas growth and marketplace opportunity.
Botting has 25 years of real estate advisory experience, delivering consulting work to corporations, real estate firms, investors, governments, and others. She was previously a senior partner and Canadian real estate leader at Deloitte, where she spent nine years and served on the global real estate executive team. Prior to that, Botting was an executive managing director at Cushman & Wakefield and an executive vice president at Royal LePage Commercial.
In this episode, we talked about:
- Sheila’s real estate journey
- How she views real estate as an asset class and as an investment
- Kind of deals she had
- Working space and setup for Deloitte Canada
- She’ll also share a discussion and presentation about Avison Young X-factor
- Thoughts on how technology can help the industry amid COVID
- Advice and mentor tips to younger aspirants
- And MUCH MORE!
Welcome to the working capital real estate podcast. My name is Jesse Fragale. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you’re looking at your first investment or raising your first fund, join me and let’s build that portfolio one square foot at a time. All right, ladies and gentlemen, you’re listening to working capital the real estate podcast today as usual, I have a special guest. Her name is Sheila botting. She’s president of the Americas professional services group at Avis and young commercial real estate. Prior to Avison young, Sheila was senior partner and Canadian real estate leader with Deloitte LLP and president of Deloitte real estate, Inc. And prior to that role, she was at which many of you know, Cushman and Wakefield as executive managing director leading a full services, professional firm and a global partner, Sheila, how are you doing today?
I’m great. Jessie, how are you doing today?
I’m doing great. So just want to make sure that was correct. The last few roles you had and I guess what we would, what we normally do is talk to our guests before we get into the nitty gritty, but real estate would love to hear about kind of how you got into real estate. If it was, you know, the natural path or it was a something of circumstance. So if you could take us back to, to the beginning of the career and how and why real estate
Shiela (1m 18s):
Sure. Happy to do that. So I think like many people in our industry, I fell into it. I have a bachelor of science in geomorphology and Marine biology and a master’s in environmental studies. And, and so those obviously, you know, an attachment to earth and, and those things. But as I progressed through my career, I wanted to be a management consultant. So I started at KPMG predecessor firm and I found that, you know, certainly I love the consulting process, but I was really gravitating toward real estate. And, and so then I found myself involved more and more real estate assignments at the time it was Whistler black home and some of the real estate developments. There’s also a secure and a prior life lived out on the West coast and I found it as gravitating more toward the real estate opportunities, whether that was, you know, residential development or retirement homes or whatever.
Shiela (2m 9s):
That’s really where I wanted to spend my time in moving to Toronto. You know, I decided to just go with the real estate company. So at the time it was Royal, a page commercial and they had a little consulting division. I think there were four or five people in that group. Worked there for a bit, found myself in brokerage for one year didn’t work well in that situation was too early on for diversity in the brokerage world, swimming back into consulting. And then increasingly over time took on additional roles where ultimately when we were acquired by Cushman and Wakefield, I led the professional services platform in Canada and of course work really closely with my colleagues and brokerage following.
Shiela (2m 52s):
And so in, in that role, I would say I learned all the nuts and bolts of real estate, which is really important for the developing leaders in our business know, understanding, leasing, and investment, know the relationship between lease and how that adds to asset value and opportunity. Looking at the governance model, I also looked at occupier strategy and did some art portfolio work. And some really learned the fundamentals on the ground, working through all the various components, you know, toward the end of that time, I had three children in the middle of all that. So that was a fairly exciting the footnote, but no don’t tell them that. And so then, you know, Deloitte approached me to become their Canadian real estate leader.
Shiela (3m 35s):
So that really took me to a whole different level with respect to management consulting. Even though that that’s my background, I was then able to layer on real estate, into management consulting and so fantastic experience to work on some of the largest and most diverse projects in the country, you know, right across public sector and private sector, whether that was working for large asset redevelopment strategies, like the Hamilton waterfront transformation or Ontario place or Seton, and then working with the city of Toronto to transform their real estate operating model. And then of course the big one was with Deloitte when we transformed their entire 2 million square foot Canadian occupancy and developed a new strategy.
Shiela (4m 17s):
And so that model really ricocheted Deloitte as a firm ahead in the marketplace to develop a best in class works place. All of those opportunities really, you know, helped me to understand the complexity of our industry, but more importantly, use the foundation to do a yes in what about the art of the possible for, for various clients? One of the last projects I worked on there was behalf of CDBQ where we looked at an investment in Avison young. So I led the due diligence team that did that work. And so at the tail end of that assignment, you know, Mark Rose and I connected and said, geez, there’s a really big opportunity missing young to, to lead the professional services marketplace.
Shiela (5m 2s):
So that’s what we chose to develop. And so I’ve spent the last 10 months, I guess Avison young developing our strategy, you know, looking at recruiting and of course talking about workplace because that’s a major topic today in our COVID environment. So very long story. And I think it shares with you, you know, from my perspective, totally curious, intellectually need to find myself at all different situations all the time. And you say, how do you, how do you figure out the situation, come up with an answer and then develop a strategy and implementation program to achieve results
Jesse (5m 38s):
Right on. Well, for those that don’t know, so Eva’s son young is a full service global real estate firm, one of the largest, if not the largest, I believe private commercial real estate group in Canada. And again, for those that don’t know that we do have some listeners in the States, you know, you mentioned a case, which is, you know, was a large in Avison young and I believe they managed 200. You know what, I don’t even know what it is right now, 300 billion. I believe it’s a Quebec pension fund. Is that right?
Shiela (6m 7s):
I believe it’s that order of magnitude, you know, clearly deep tentacles in the real estate and investment community.
Jesse (6m 14s):
So Sheila, the, you know, you, you go from Cushman to Deloitte, Deloitte, obviously, you know, renowned for the consulting and advisory and then moving into Avis and young. And, you know, we’re going to talk a little bit on kind of the latter half of this, about, you know, the office space and the current environment that we’re in. But I thought what we’d talk about is a little bit about your relationship with real estate, just as an investor, as somebody that, you know, it’s always interesting when we find people in the services side that actually invest. And I’m always amazed at how small of a percentage that sometimes is at least anecdotally. So, so what has that experience been like for you and maybe a little bit about how you view real estate as an asset class, as an investment?
Shiela (6m 56s):
Sure. So what I would say is, I think real estate is a calling for many people, you know? And, and so as a calling, you say, you’re always looking at the, you know, the land, the buildings, the development, the opportunity. And so for me, totally, that’s what this is, you know, every day, every weekend I’m hooked on MLS and on deals and what’s happening in markets. And, you know, what’s the residential market doing? What’s the commercial market doing? Where are there opportunities? And so from a personal perspective, I don’t have the ability to buy a big office building. That’s clearly beyond my staff bracket. And so early on, you know, after we bought our first house and had two kids by that point, and then taking care of personal debt, which by the way, for all the young folks take care of debt and don’t spend beyond your means and all those good fundamentals that you hear about, we decided to make an investment in a multi res property.
Shiela (7m 50s):
In my hometown, it was a fiveplex, it was a dog Oh dog. And as a residential property, you know, you jump in, we happened to take advantage of the market at the right time, bought a building and learned, I guess, on the ground through 20 years of owning this particular asset, learned on the ground as to what it was like, you know, so the first experience was a fellow and his whole family living in the basement suite couldn’t afford to pay their rent. And so literally within the first month, Oh no, who’s making the mortgage payment. How do we go through that? Go through rank or, and you know, all of those stories and, and you run into some philosophical differences, right.
Shiela (8m 32s):
You know, from my perspective, being hardcore real estate, get the guy to pay the rent. My husband of course, would say, you know, we can’t put a family out on their street. So we hired them to come work for us, which is different, all different opportunities. So that left moral dilemmas. I became the leasing agent on the weekends. We became property managers. And, you know, you go through all of that and you, you, you, you know, you, you take virtually every ounce of your technical knowledge and you say, how does it apply in the real world? So then we bought another property and developed it and did some other things after I think it was close to 20 years, we owned these properties. We got really sick of being the leasing agent on the weekend and really sick of dealing with, you know, plugged up toilets, all of the other stuff that goes along a lot of snow.
Shiela (9m 23s):
And we ultimately sold the properties, which from a personal perspective, beyond just your income statement, your cashflow, you’re able to build real wealth for yourself. So I think for all of the folks in our industry, finding a vehicle to actually build real wealth, that’s part of your day jobs. So moving beyond kind of personal lifestyle and seeing what is my strategy, so that in 20 years I actually have a nest egg. So whether that’s investing in REITs, in our industry or other equities and our physical assets, I think it’s really important to have a path toward independence that, that, that really helps you to mobilize your future in your career.
Shiela (10m 3s):
There’s always a path for that. And some of, you know, one of my, I’m a great admirer of a fellow by the name of David Jenkins, formerly from the Altice group. And David has a website called the answer is, and so for all the young folks, I’ve been a bit of a promo for, for his work. He probably doesn’t even know that I’m doing this, but it’s a great way of how to invest early on in your life, which is a really core, fundamental principle for me.
Jesse (10m 30s):
So the, the first property, where was that? If you don’t mind me asking,
Shiela (10m 33s):
Oh yeah. So I live in I’m from Burlington, Ontario. So I’d say it was in downtown Burlington.
Jesse (10m 38s):
Yeah. It’s pretty incredible where prices have gone in, you know, every market, but, but especially, you know, our Canadian markets, Montreal, Toronto, Vancouver, and, you know, w w one thing like it’s something that comes up time and time again. And I alluded to it with the question and it’s that people seem even in the industry, as a lot of times, you know, we speak with people that they don’t invest personally. And they have a lot of the acumen to be investors in real estate. They have, you know, they touch it every day and they talk about it and they’re knowledgeable. But why do you think that is? Why do you think that you have, you have people in our industry that, you know, absolutely can do it, but just shy away from it?
Shiela (11m 18s):
Well, I would say as Canadians, we tend to be very conservative when you look at us compared to, you know, other countries, we’re very conservative by nature. And so if your income is derived from the commercial real estate industry, you know, really tricky to tie all of your wealth and equity into, into our sector. So I think there’s that whole issue. Secondly, I think that it’s really easy to overthink things, right. At one point, you know, we had some investors said, go buy some office buildings up and down, you know, base street. And I said, Oh, you can’t do that. Why would you possibly do that? Is hugely risky in the markets, three little kids, you know, all the rest of it in hindsight, of course could’ve, should’ve would’ve.
Shiela (11m 60s):
And I think it’s always the fear that gets in people’s way. And so, you know, taking benefit from some of our us colleagues, jump in, just do it. What’s the worst thing that could happen, you know, mitigate your risk on the downside, figure out what that, you know, that bad situation could look like little tricky in today’s markets that are fairly euphoric, but nonetheless, you know, very carefully assess what it is that you’re doing and where are you going? What’s the downside possibility and calculate every which way from Sunday, Richard Branson is famous on that. He said, you know, it’s one thing to take a risk and to jump, it’s make sure that, you know, what the, what that could look like if it does fail.
Shiela (12m 41s):
So really important to do that. Now, the other side of this, just to piggyback on that thought there’s many great personalities in our industry who have moved beyond the service provider role and into, you know, building true real estate companies. And, you know, I’m a huge admirer of those folks and what they’ve done and the, and the ambition that they’ve been able to articulate, put it into a strategy and accomplish some great things.
Jesse (13m 8s):
Yeah. You know, for myself, I maybe it’s, it’s me putting, I guess, too much into the idea of that. Everybody should be a real estate entrepreneur and, and kind of taking a step back and realizing that, you know, the real estate industry is the industry sometimes where people just want a job. And I feel like, you know, what, you just described what I like to call for real estate, blood, sweat, and years, you know, investing early, but you know, the property management dealing with leasing, it’s not something that is particularly appealing to everybody, but I want to kind of, you know, fast forwarding to today, w you know, Sheila, one of the, you know, the things where you, when you joined the company, a lot of the talk was just your approach to real estate, specifically how companies work.
Jesse (13m 48s):
And it couldn’t have been a more serendipitous kind of coinciding with what a lot of companies need right now, given the last 12 months, the environment that we’ve been. So I’d like to talk, first of all, how did you kind of fall into this role of, you know, being the go-to when it comes to the workspace and the ways of working, and, and maybe you could talk a little bit about that, that story. I assume it has something to do with, with Deloitte.
Shiela (14m 13s):
Yeah, of course. So I actually did a lot about work beforehand at my previous firm, but more from a, I’ll say a core real estate perspective. Like let’s figure out the square footage, let’s figure out the lease and all of that in my Deloitte world, having now leading one of the largest portfolios in Canada for professional services firms. Now I had to get in behind people and who are these people? And what is it they need? And what is it that that’s the secret sauce for their success in the future? And how can we unpack that? So, you know, like any good consultant became a consultant to the organization and it didn’t. And so that includes, you know, looking around the marketplace from lessons learned from others.
Shiela (14m 56s):
And I learned from Australia through touring Australia, that the, in that case, the Australian banks, Macquarie national Australia bank and Commonwealth bank, and move to unassigned seating models. And so I flew to Australia to talk to the people who lead those initiatives. And, you know, it was like going to the moon at that time. Can you imagine coming to Canada, you don’t need your desk in your office anymore. And that was nine years ago. And so I learned through that journey, how they went through the process, what it looked like came back to Canada and started to test it out. And so when you do the business case, you learn that the average seat is empty. 50% of the time in Canada, in North America, in the world, we work in very different ways.
Shiela (15m 37s):
We’re not sitting at our desk processing paper from the left of the right of her desk. We’re moving around, we’re collaborating routinely, we’re zooming or teammate or whatever it is with our colleagues. And so that means that the physical work environment can change, and we no longer need the one seat to one person log. Rather, we can come up with an incredible dynamic workplace. It has many different components that you can enjoy and use as you need it. And so having learned about that, having learned the journey, having worked, you know, I, I ran a global RFP for service providers and hired some architects out of the UK and Australia to help navigate that journey.
Shiela (16m 18s):
And so ultimately it came up with a methodology that worked for Deloitte, well, sure enough, right after. And so I worked very closely with our human capital team, our technology team, finance teams, innovation and so on, right. It was really important to have our chief innovation officer as part of this whole activity to imagine the art of the possible. And of course it, you know, of course it wasn’t possible without the huge support, encouragement endorsement of the Canadian CEO of Frank fatigues. You know, he was a true visionary. And so he’s the one who really deserves the credit. Cause I would articulate an idea and it would be yes, go for it. Let’s figure it out. Can we make this work? And so at the end of the day and that model, which worked really well for that firm, suddenly all of the Canadian banks and financial institutions and the governments, and everybody wanted some of the candy.
Shiela (17m 8s):
So I had the good fortune of advising. Many of those organizations, you bet 150 million square feet of space to be able to talk or even 200 million, depending on how long you consider that to say, here’s really what the art of the possible is. Here’s what the vision could be, how that manifests for your organization. Obviously that requires some great analytics in our, to sort that in. But the basic notion of moving to this dynamic workplace design model, a hub, a center of excellence really is what’s driving the opportunity. So the one, two punch on this is you can reduce your occupancy costs and you can accelerate your productivity. It’s not about cost reductions about performance enhancement.
Shiela (17m 49s):
And these environments are phenomenal as places to work. So to take that full circle, when I was in Australia, I learned that 96% of the people who move to these new environments would never go doc, go back to the dark ages. And I totally feel that myself, you know, the notion of going back to being tied or tethered to a desk all day where somebody can watch you nine to five, that’s just, that’s just a very traditional way of looking at workplace.
Jesse (18m 17s):
Yeah. It’s, I mean, it’s pretty incredible. When you think about how long ago it was for you, because I mean, let’s be honest, you know, there are companies today are individuals that still are tied to, to the old way of working and the idea of, of hoteling or moving, you know, with different offices throughout the day just seems foreign. Whereas for myself, you know, I’m on the upper end of, of millennial. But for me, the idea of, of having one specific area is the it’s the other way around to me being mobile, working from home, going into the office, I find there’s more freedom in that for myself. So you have a bit of a presentation that we’re going to try to, we’ll do a video here. So anybody listening on the podcast, we’ll try to kind of move you along through it, but I’ll just let you share the screen here, Sheila, and what would, okay.
Jesse (19m 6s):
So we are going to get a presentation here from Sheila. It is the Avison young X-Factor if you want more information she’ll I believe it’s Avison young X-Factor dot com. Yes, that’s correct. Perfect. Okay. Yeah. Let’s, let’s kick us off. And if you were to kind of summarize, this is this, you know, about the way we work, how office is evolving, what would be the tag?
Shiela (19m 28s):
So this is the changing nature of work and workplace because of COVID really, you know, like you think about it Covid is changing the way that we live workshop and play. All those things are changed. What is it? What it’s doing is it’s accelerating, you know, our movement into the future. It’s change managing all of us to recognize that that the world is changing and we too have to change with it. So at its very core, it’s shaking up how we look at workplace, the office building design, and it’s not going away. Of course, that would be ridiculous. So we’re realizing that the value of the workplace, it is a tool of business. It’s an enabler of organizational change and it’s really important for in the war for talent.
Shiela (20m 13s):
That goes without saying, so the question is that our employees recognize the work is what you do, not where you do it. And therefore, if I can work from anywhere, why would I go to the office? And so, you know, many investors say to me, geez, Sheila is the office dead. And the answer is absolutely not, but will it be redefined? Totally. So it’s leading us to question, what is the role of today’s workplace? So then when you unpack that a little bit, you, you realize that there’s five different generations working in the workplace from on one side veterans who work hard and be grateful through two gensets digital natives and gamification audience and everybody in between.
Shiela (20m 56s):
And so the secret sauce here is try to unpack the workplace physical design, to allow engagement across all five generations to, to develop the best of, you know, performance, productivity, outcome, culture environment, for everybody to bring, you know, the, the human resources where it’s to bring your whole self to work so that you can drive outcomes. So that’s really what we’re trying to solve for. And so when you think about, as the office did absolutely not, but I believe that the traditional cube farm may very well be dead. And so that’s why you’ve seen many companies choose to abandon this particular design. And this happens to be a design, you know, downtown Toronto and York street.
Shiela (21m 39s):
And, and know that we’ve got, you know, but 85% of the space, all dedicated to individual private offices and or workstations with a small amount in your organizations have five to 10% of team collaboration. Yet when you walk around that workplace and we do this all the time with our clients, whether we’re looking at security badge data from before COVID or physical examination, again, that that we’re doing across North America with my workplace colleagues, the average seat is empty 50% of the time, whether that’s within our own Avison young world, or whether that’s in a financial services organization or public sector, we’re completely changing the way we work. We’re not processing paper from the left to the right of our desks.
Shiela (22m 20s):
Furthermore, this environment is all about hierarchy and territory. Notice that the bigger personalities have spaces on the window, the bigger per the biggest or in the corner with, you know, giant offices. And it’s completely out of balance with how we are today, the democratization of workplace, and in fact society, that’s why you’ve seen many organizations reduce their footprint over time. You know, Deloitte, when I was at Deloitte, we had all kinds of great analytics around this, where, you know, the average seat before COVID in fact, many government organizations were around 180 square feet per employee. Then they reduced to one 30 to one 40 square feet.
Shiela (22m 60s):
And this is Lisa malaria per employee, just as a benchmark back of the envelope metric. And you can achieve to sign seating in that kind of environment. The second you go to agile or hot desk or anything of that nature, you can achieve 90 to a hundred square feet. So why not take that vacant space out of a portfolio and create a high performance work environment, give employees back the technology tools that they need to be more productive. So in this COVID world, people are recognizing, wow, great opportunity. We can, you know, typically in the, in the old days, we’d have these traditional headquarters as, as identified here on the screen, through our COVID world where we’re completely distributed, right?
Shiela (23m 43s):
Where either onshore shore near shore, we could be in many different locations this morning. I was on a call with folks from the UK, us and Canada. And we quite frankly, had a great conversation in the post COVID world. Most of our clients are, are landing somewhere in the middle, whether it’s a central hub with folks working remotely and maybe even using some of the flex office solutions like our Regis, we work, or many of the others that are available through to the hub and spoke model, which tends to be used by larger organizations, call it a bank or government where they may have a downtown location. And then a couple of suburban locations, maybe even with the remote folks, working from home and then flex office, the movement toward unassigned seating is here to stay.
Shiela (24m 32s):
And so many organizations are saying, you know what, post COVID we’ll have 50%, 70%, a hundred percent move to the on assigned seating model. What it means is that the return to and future of work requires a whole new way of thinking. We understand today that flexible work or hot desking is feasible and practical, but also highly desirable in the war for talent. In fact, over 70% of employees across North America, through many of the studies that have been done anywhere from 70 to 80%, depending on the study would say they want flex work as part of their schedule. They want the ability to work from home at least one or two days a week.
Shiela (25m 13s):
So if they’re working from home or remotely one or two days a week, you know, you’re 50% vacancy suddenly goes up to 80% vacancy and a great opportunity to rethink your workplace. But of course we know one size does not fit all. There is an evolution in organizations because they’re going to move at different speeds. So on one hand you may end up in traditional office that remains through the high end, on the other side, where you’re seeing many financial institutions. And in fact, some governments moving toward a whole agile transformation using the digital optimization to redesign and re contemplate their workplaces in the future of work. And there’s others that’ll stay somewhere in between with a planning and collaborative model.
Shiela (25m 57s):
What we’ve really pivoted toward is a dynamic workplace design, a hub or center of excellence that allow people to have flexible work schedules, creating a purpose for the office. So again, the office isn’t going away, but how you design and think about it, you know, absolutely changes. So what we’re doing, you know, in the old days, we’d have those traditional or cellular design. Some firms went to this open plan, which, you know, was horrible, horrifying. And for some people, because they didn’t like all being out in the open. And in fact, some of my former partners said, but, but you know, we’re shy people. Some of us are quiet. We want to have our own private space through these new work environments, which are dynamic, which have anywhere from 15 to 25 different, you can see workstations, you can see meeting rooms, collaboration, areas of bistro, cafe teaming, areas, all different kinds of environments that people can engage in.
Shiela (26m 55s):
And so it’s really moving down this, this right-hand side that most organizations have been pivoting to as they contemplate the evolution from COVID. And of course in those environments, you know, it’s all about innovation, having incredible design options, you know, focusing on sustainability, ESG health and wellness facility management programs are incredibly important. So we’ve got cleaning, you know, both at nighttime and then practices perhaps during the day as spaces, change smart workplaces. You know, when I go to work, now I have to advise everybody that I’m feeling quite well, thank you very much. And even have my temperature check. And then that can feed into, you know, for the employer, through the smart buildings and smart cities.
Shiela (27m 38s):
And you certainly saw, so I’ve up labs take advantage of some of those opportunities and some of their proposals here in Toronto and, and the last. But I think the most important criteria, our issue is around diversity and inclusion and it’s yes to culture and gender diversity. But it’s also about diversity within your own population. I talked about the demographics, but it’s also about technical diversity. So in our real estate world, it could be about combining leasing and capital markets. So workplace people and appraisers and consultants and project managers all in the same space, because what that does is suddenly allows you exposure to other people who might look at a situation differently, and you might come up with a yes and better solution rather than your same silo or vertical.
Shiela (28m 25s):
So that’s really powerful in these new designs. And that’s why many organizations are saying, we need to think about that. And then from a physical perspective, you’ve reduced the individual spaces. You increase the breakout collaboration areas, and then you deal with paper. You get rid of paper as much as you possibly can because we don’t need paper. What you realize when you did the utilization studies, as an impact of those workplaces are all about keeping paper for people. They’re not for people themselves. So the digital transformation, you know, is really important at the end of the day. And you can go through all of the research that’s available through Harvard and MIT and others, that companies that invest in the human experience can see an increase in profitability up to four times.
Shiela (29m 10s):
And so when you create the value proposition for the office, it’s about bringing your people and culture and ideas together so that they can have proximity to flourish. They just don’t need to be tied to their cube farm desk, 24, seven or nine to five, whatever you want to say. So it’s about empowering your people in an incredible design and workplace and rethinking what the future of work can, can be for our people. And it was, I wanted to share that with Jesse, just so you could get a, a framework in terms of what the future of our workplace can look like and how to empower. And it’s the best of people, technology, innovation transformation, and then physical workplace at the end. Yeah,
Jesse (29m 48s):
Yeah. That, that’s great. Just a couple points, you know, it’s kind of, you know, as listeners know, I, you know, love books or studies on productivity and, and just, there’s a great book by Cal Newport called deep work. And the reason I bring it up is I, a lot of clients I’ve had, you know, when they think of agile workplace over the last few years, a lot of them immediately just think open concept, open plan. And they just think of these, these spaces where, you know, somebody will talk to you and then you’re kind of off task and you can’t really get any deep work done where it’s, it’s nice to actually visualize where you have these breakout rooms where you can do deep work here, where you can collaborate here. And maybe you’re, you’re having a conversation over a coffee.
Jesse (30m 28s):
And another area, one thing I wanted to ask you about is what we’ve constantly hear during this time, especially with COVID is a lot of zoom calls, a lot of, you know, teams meeting. And what is the implications for that on the human side of this technology of, of not being face to face or, you know, is that something that we’re going to solve with technology? What are your, what are your thoughts on that? Huh?
Shiela (30m 54s):
So, you know, Harvard came up with a great study last week from the Harvard business review called what COVID-19 has done to our well-being in 12 charts. So let’s just say it’s not good, right? Not good. When you, so you think about, you know, I think I shared with you earlier, I’ve been sitting here at my secret 18 days straight. Like it’s crazy because you’re, you’re looking at a screen as like, this can’t be good. So you, so for, from an individual perspective, you have to be very purposeful about planning your day so that you bring in, you know, fitness, health, and wellbeing, and took really tricky when we have all these, you know, high pressure opportunities. So I think everybody’s looking forward to the vaccine where we can move on to our new version of normal, whatever that looks like.
Shiela (31m 40s):
So I think there’s clearly been some hugely detrimental issues with COVID and having to start talking about the economy and, you know, small and medium sized business, which is horrific. What I, what I would say is that what it’s doing back to my earlier comments is forcing us to change the ways that we’re thinking. It’s forcing us to think. I don’t need to sit nine to five and a seat all day. I can work in many different ways. And in fact, you know, blending some of my work-life balance, which is a really big criteria with millennials and some of the next generation, I think everybody’s understanding that this is magic. This can work. It’s just how to exactly calibrate that for your business, for yourself, for your organization is becoming the, the opportunity ahead
Jesse (32m 27s):
Right on. And the last question I had was just curious, number one, if this differs for different size organization, but through the utilization studies that you’ve done working with different companies, in terms of actual square footage, they take, what, what do you find is, is the net effect? Is it that, you know, they reduce slightly because, you know, they have still all these breakout spaces or is it a market percentage reduction in, in the square footage that they end up needing? What does that look like? And like I said, is it, does that change for, you know, the smaller users?
Shiela (32m 59s):
So what I would say is, is for, for, you know, space occupiers that are moving from the traditional cube farm model that I mentioned to an agile scene before, COVID, we could, we could reduce their footprint by 30 to 40%. That’s how transformational that, that footprint evolution is. You know, some of our clients they’ve already been in that agile transformation, so maybe they’ve got another 10 or 20% to go the net net of all of it. You’ve heard the real estate industry say that occupiers will reduce by 10 or 20%. I personally, as I’m working with clients saying we’re from 30 to 50%, and obviously over 10 years over there at least roll over schedule the rest of it.
Shiela (33m 40s):
And we’ll have a, a short-term impact is as people absorb that space. So that’s the net net from the clients that we’re working with. But I would say on the other side of that spectrum technology firms are constantly growing, hiring new people. So they may be absorbing some of the spaces being shed by the more traditional firms, professional services and financial institutions. And it looks at public sectors, a giant opportunity, right. You know, let’s reduce our tax dollars wherever we possibly can. You don’t need, you know, vacant space. And I think that’s a biggie and, and, you know, kudos to many public sector organizations that are getting out in front of us.
Jesse (34m 19s):
So I want to be a little mindful of the time here. We have a few minutes left. Last question on just the presentation is you, you talked about square footage per person for an organization. How that’s, you know, slowly come down over the years, you know, just being on in the leasing world. The first thing I think about is, is operating systems and buildings. And can they handle that decrease in, you know, when, once we start getting lower than a hundred square foot per person, what, what has been kind of your, your fact finding on that and, and what have you seen for, you know, a wide array of different vintage buildings, different, you know, different technology.
Shiela (34m 56s):
Yeah. So you have to remember in the beginning that only 50% of the people are in the house at any given point in time. So while you’re using your space per employee, only 50% are there, in fact, you’re back to the higher number overall. So you really have to unpack what it is that we’re looking at and understand that if 50% of the people are in the office, then you do your loans. Now that said, some organizations have put, you know, much lower than a hundred square feet of dropped it to the 60 to 70 square foot range. Then there are pressures on building systems. So making sure that you have sufficient washroom, sufficient elevator capacity, destination dispatch, and all of those other things that are really important, some organizations have moved to the integrated workplace management software so that you can manage who goes, where at what point in time.
Shiela (35m 45s):
So there’s massive technology solutions as part of the overall experience. I think what we’ve learned of it all, you can’t assume that things will still be the same in the future. It’s going to change and let’s use AI technology solutions to be able to get out in front of it and manage how many people are in the office. What does that look like? But most important, what is the experience you want for your employees, for your customers and to the visitors of your space? And is it a cube form or is it a high performance workplace based on some of the dynamic design principles that I’ve shared?
Jesse (36m 19s):
Yeah, I guess the only thing we’re certain of is, like you said, has changed. So there were a couple of questions we typically ask guests at the end. I thought this was a little bit of a different format given the presentation. So if you’re, if you’re game I’ll, I’ll fire off some quick questions for you and, and you can answer
Shiela (36m 37s):
Seriously. I don’t know about these questions, but fire away.
Jesse (36m 40s):
I liked, I liked disparate surprising at the end, but what’s something that, you know, now in your career that you wish you knew when you started out,
Shiela (36m 51s):
Oh, that’s a good one. So people have been using this word quite a bit lately with respect to authenticity. And I think when you’re young in your career, you’re being molded into somebody else’s views somebody else’s image. But I think being authentic into a situation, bringing your whole self to work in your authentic way is the number one criteria. Obviously you’ve got to do that in a respectful, honest, and trustworthy way, but bringing your authentic self to work, I think is everything okay?
Jesse (37m 24s):
Perfect. A little earlier, you talked a bit about an initial foray into the brokerage side and, and diversity. So you can go wherever you want with this question, but in terms of younger professionals in our career mentorships and mentors thoughts.
Shiela (37m 41s):
So when I was contemplating the brokerage side, it was a completely different time and place than it is now. So, you know, I, I took some of the negative energy out of that and was one of the founding directors of Toronto crew and said, let’s develop a path for people that are coming behind us so that they have a great place to move forward. I think that many organizations have mentor programs, whether it’s within your own organization or what’s an industry association. So I think, yes, yes, yes. Join one of those opportunities. But beyond that, what I like to do, and what I’ve personally done is have a board of directors and your own personal board of directors that you can touch base with on different elements related to whether it’s a technical element to something you’re trying to solve for whether it’s your career or even your life.
Shiela (38m 30s):
Right. You know? And so there’s many different things that everybody goes through and just making sure that you’ve got trusted colleagues, friends, champions, who can help you navigate that. And then of course you do that in a reciprocal fashion for them as well.
Jesse (38m 44s):
For sure. In any resources right now, I’m sure there are a million that you’re particularly interested in any, any new studies books you’re reading.
Shiela (38m 54s):
Oh, for me personally. So I’m a lifelong learner. So you’ve heard that through some of the things I’m doing, I’m just passionate about everything. So whether that’s traveling the world, so now I can’t travel and I was dying to do that. So I bought a Peloton. And so I’m cycling in different places around the world personally. So that’s a fitness thing that I had to do. And the second thing is I’m taking a course for the Institute of corporate directors, because I’d like to learn more about the governance models and those other things. So, and I do that often, I’m always taking courses or doing things just to kind of expand your knowledge and horizon. I think that’s a foundation for anybody through their career in their life.
Jesse (39m 32s):
That’s great. And last question, totally unrelated to real estate, but my personal favorite, if you can remember your first car make and model
Shiela (39m 40s):
Volkswagen beetle. Yeah. It was a beetle. It was a green Badal. I think my, my parents bought it for me for $500
Jesse (39m 50s):
Like listeners though. I’ve, I’ve stolen that from, from Bloomberg. I think it’s a, it’s just a funny way. They end a masters in business. Thank you so much, Sheila. This has been, this has been great. If people want to reach out to you, what, what would be the best path?
Shiela (40m 6s):
Yeah. So through Avison young might email, it’s posted all over our website, Sheila firstname.lastname@example.org, always the best way to go or follow me on LinkedIn. Right? We often post articles from our firm on LinkedIn, some of the newest trends as well.
Jesse (40m 20s):
My guest today has been Sheila <inaudible> Sheila. Thank you for being part of working capital. Hey everybody. This is Jesse for galley. Before we started this episode, I just want to say thank you so much for everybody that keeps on listening, it really is amazing to me and I can’t. Thank you enough. What would really help us out is if you enjoy the show to go over to iTunes and leave us a five star review. Also, if you have a favorite episode, what would be great is if you could share it on social media, whether that’s Facebook, Instagram, or LinkedIn, anyways, enjoy the show favor. Listening to the working capital podcast. My goal is to help individuals break into real estate investing as well as educate experience investors.
Jesse (41m 4s):
If you enjoyed the show, please share with a friend, subscribe and give us a rating on iTunes. It really helps us. If you have any questions, want to learn more or likely to cover a specific topic on the show. Please reach out to me via email@example.com. My name is Jesper galley, and I’ll see you back here for the next episode or the working capital real estate podcast.