Julie Whelan: Flexible, Responsive, Social Real Estate | Work 20XX #06

Jeff Frick
August 24, 2022
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What happened when the world of ‘agile, flexible, and dynamic’ crashes into what my Wharton Real Estate Professor used to describe as  ‘big, lumpy, assets’? Best in class Real Estate, Facilities, and Workplace Professionals are on board, and early results are out, including the recent opening of LinkedIn’s Office One, where 50% of the workstations were removed, and replaced with over 75 different seating configuration options throughout the building.

Who better to ask than Julie Whelan, Global Head of Occupier Thought Leadership for CBRE? Julie has been leading a longitudinal study with occupiers since 2015 and shared some of the latest results on Work 20XX, a show focused on work and the future of work. In this episode, Julie shared some of the latest data from the Spring 2022 US Office Occupier Sentiment Survey.

Individual workstation occupancy has been in decline long before 2020. Ironically, Julie and the team published Global Outlook, “The Age of Responsive Real Estate’ in March 2020, foreshadowing a more flexible, activity-based real estate portfolio. And as we’ve repeatedly seen, Covid accelerated said transformation, compression 10 years into two.

‘Activity based’ is the way to think about usage, which drives employee experience and productivity, which drives retention and innovation. No one wants to be considered overhead or SG&A. How can Real Estate and Facilities professionals use their expertise and resources to help make everyone more productive?  

Real Estate also represents a huge lever in achieving corporate sustainability objectives, which are important for everyone from the boardroom to line people.

These are still early days. Listen, watch the data, and be ready to adjust.

Without further delay, enjoy this conversation with Julie Whelan

Episode Transcript

>> We will count down in three, two. Hey, welcome back, everybody. I'm Jeff Frick here, come to you from the home office for another episode of "Work 20XX," the future of work. But like we say, we don't call it the future of work here, it's just work. It's what we're doing going forward. We're not going back to 2019, stop thinking that way. And really, what we're trying to do is go out and get experts in the field and get different perspectives as to what's going on, what's the future look like, what should we learn and share those best practices. And we're really excited to have in our next guest, she's Julie Whelan. She's the global head of Occupier Thought Leadership for CBRE, joining us all the way from Boston, Julie, great to see this morning. 

>> Good to be with you, Jeff. Thanks for having me. 

>> Absolutely. So you guys, this came across by feed. You have a longitudinal piece of research called the US Occupier Sentiment Survey. Before we get into it, tell us a little bit about the survey. How long have you guys been doing it? You know, kind of what's the process? 'Cause it's always great to know what's behind the data before we get into the data. 

>> Absolutely, Jeff. So the US Office Occupier Sentiment Survey has been done since 2016, actually, when I joined CBRE. And this is something that is not just done in the US, it's actually done globally. We do have a global team. So we have a set of data that we use in Asia Pacific and also in AMEA. But the US is the one that I am closest to. And every year, we do it because we want to understand what is driving occupier behavior. And we think that we're best suited to do that because of all the clients that we have that are in the occupier realm that we work with every day and that are willing to help us understand what they are doing. Therefore, they can understand what their peers are doing and therefore we can benchmark year to year, which is really cool once you see trends happening. 

What's really interesting is that in 2019, I said, "I'm not doing it this year." I'm going to skip a year because the results were so similar to what they had been, 2016. Because in real estate, change happens really, really slowly. And so we skipped it and we put our efforts towards other uses, and then lo and behold, in 2020, COVID hit. And it became something that everybody wanted to talk about. And so we ramped up our efforts. And since then, we have done four occupier surveys just to understand how things are changing in the face of everything that we learned throughout the pandemic. 

>> Right, and it's even changing since you published this thing. I was listening to some of the podcasts, getting ready for this. I think it came out in late April or early May and here we are, coming toward the end of the summer and things are already changing dynamically. So we even have more data, I can't wait to dig into it. But the other thing I just find striking that we see in everything is COVID as this accelerant to things that were kind of already underway. And as Darren Murph from GitLab would say, "We saw decades of movement compressed into a number of years. And now we're on the other side and now we're getting lots of data." So I've got here, you had like the top 10 takeaways. We won't go to all of them, but there's some I want to talk about and let's start really with what people are probably most curious about today, which is return to office. So we've seen kind of the COVID variants have kind of gone down in terms of severity of hospitalizations. 

And there's some degree of normalizations, and what's interesting is there is no norm, no one has the answer. And lots of people are trying different kind of return to office strategies. What are you seeing out there in terms of kind of movement in general, but then kind of what's working, what's not working and what are maybe some of the trends that you're seeing? 

>> Yeah, absolutely. So I would completely agree with GitLab and that decades of change have happened. What was really interesting is one of the things that we put our efforts towards in 2019 instead of the occupier survey was actually something that we called Real Estate 2030, which was at that time going into 2020, a 10-year look ahead. And the headline article was one that my team wrote and we called it the Fluid Workplace. And it was this idea that the workplace was going to be much more fluid. And the office was almost going to become more of a clubhouse, where people came together to collaborate and to have a sense of belonging, but it wasn't going to be a place that they came every day. And the reason that we wrote that is because we saw as we studied data, either through BLS or through any number of surveys that were out there, that people were spending more time working remotely as part of their normal day. 

And so we jumped to that conclusion, but we really believed it was going to take until 2030 to get there. And we could have never known what was ahead of us. Now, as far as where we are today with the return to office, it is very slow. I think that so many want to jump to conclusions right now about what the future state is going to look like. And the reality is we don't even know what the current state is yet. And the reason for that is because over the last 2 1/2 years, there have been so many starts and stops by organizations in welcoming their employees back to the office because of the various variants and things like that that we've been dealing with. So right now, if you look at national statistics, Kastle Security Systems has some of the most consistent data that's out there that I do believe is probably directionally correct. We're sitting at around 44% occupancy, vis-a-vis what we were before the pandemic. 

Now, that is not surprising to me at all. And what's more interesting about that number is just how plateaued it has been over probably the last five months. It really hasn't moved much off that 40 to 44% mark. But I actually think that there's some positives to look at, which is that right now we are in the height of summer. And usually at the height of summer, we would see occupancy of buildings drop a little bit, but actually, we've seen that Kastle number climb steadily throughout the summer, although very slowly. So I have reason to believe that in the fall timeframe, we will see a greater return to office because I think that naturally the seasonality of it is going to kick in. And I also see that more organizations are being a little bit more influential right now about trying to get their employees back to the office in a cadence that works for both of them. 

And our survey results told us that. You know, we have the vast majority of our respondents that said, "By second half of 2022, we expect that we are going to be coming back to the office in a more regular way." Of course not withstanding the fact that there could be other variants that come to play, but knock on wood right now, that doesn't seem to be a factor. So I do think that in the fall, things are going to look better. 

>> Right, right. And of course, yeah, summer's over and kids go back to school and all that kind of happens. And we're going to talk a lot about vocabulary, but I'm going to jump up to your point number three, which is you guys solidly believe in hybrid, which is going to be news to Webex's ears. It's their foundation or their go-to market. But the question is what does hybrid mean? And I think what's funny is me and maybe a lot of people, hybrid has a tendency to sound binary and it's not binary at all. It's really this multidimensional thing, as we learn from Scott Cook from Intuit, right? Set your company up for low cost experiments, and you're going to do good things. And as you said, we're in this kind of data collection period now, as people continue to experiment and try to figure it out, but let's jump into some of the specific language about hybrid. And the first thing I want to come to that you talk about all the time is setting the rules, 'cause you said the most important thing about hybrid work is when I show up, there's people from my team are there. 

And people in the business talk about neighborhooding. They talk about it kind of in workspace where it's all about these kind of group norms. So when you guys done your research, is it the norm established by the company or is the norm established by the person? And really, it feels like there's a logical unit that's in the middle of those, which is really going to be kind of the guiding principle where people are happy to go see the rest of their team when they go to the office. 

>> Yeah, so I would agree with you, but there are a couple things that you said that I think that listeners will, some of them, that have been talking about this for a long time, will probably cringe at, and that's just the word hybrid and also the term rules, right? So hybrid is, for lack of a better term, what we're using for this. But I know many in the industry wish that there was a different term. And a couple reports ago, I remember having a header that said, hybrid is for cars, flexibility is for people. And I do believe that we will eventually arrive at a different lexicon of what we call this, but for now, let's call it hybrid. And hybrid is not binary. I often explain hybrid like ice cream. At the base of it, it is the same, right? You have hybrid where you work from home a little bit, you work in the office a little bit, and then you can work from a variety of third places that suit you as a consumer of space, just like ice cream has the same base ingredients, but that's vanilla and it's not interesting. 

And it's not certainly going to hook people to want to keep coming back. And so it's the mix-ins of how that all works together that is actually going to create what is the winning combination, that favorite flavor. And by the way, what you might like when you're new into this is very different than what you might like down the road. And I think that that's another important thing to know is that organizations that are implementing hybrid right now are implementing it but really leaving themselves open to say, we are going to learn about our likes and our dislikes and we are going to adjust course as time goes on, to be able to satisfy that. Now, in terms of what is ultimately hybrid, once you take into account that it can be a multitude of different things, hybrid is going to be different for every single company and it's going to be different for every function within a company. 

And even with how people within functions operate, it's going to be different. And this is why we really suggest in getting to know your employee at the personal level. What makes them tick? What are their drivers for wanting flexibility? And what does their actual job function need to succeed? I think so often we want to put blanket statements on these things and we want to remove the human element because it's easier. And ultimately, that is just going to keep us in this state of limbo where nobody really understands what to do because there's not a solution out there that satisfies both. But I think if we really understand what is the value equation of a certain function going into the office, we prove that well, and then we provide the space that creates that value, then it's going to naturally happen. But just coming to a set of binary rules because the culture says so of the organization, or because of executive leadership says so of the organization, is not going to create a sustainable future when it comes to flexible work. 

>> Right, so I want to zero in on two words, one is flexible, like you said, and the other one is intentionality. And those are two really important words that are getting more emphasis during this moment in time. And the flexibility, it just strikes me that things move and how you measure them. And so our days are dictated by blocks of time, whether that's to be in this meeting or to have this conversation or to go pick up the kids, or to go have a business meeting, or whatever. And yet the conversation is still talking about days and it's such the wrong granular slice. Something as miserable as a commute can easily be mitigated, not by the day that which you go in, but the time that you go in. And then we'll talk a little bit more about DE&I, and how much of that flexibility in time is really about caregiving, whether that's for the kids or your parents or sick relatives or whatever, you know, a burden overly carried by women generally. 

And so I think we really need to help people understand these terms, that flexibility is not, you know, we're going to do it, coming on Wednesdays and not Fridays, it's, you know, what are the group norms? What are the activities that we need to have people together for? And let's build it around those things. I think, Ryan's research from Herman Miller pointed out three really good things that offices are better at than at home, right? Heavy collaboration, big collaboration work, heavy socialization, culture building, personal bond building, and isolation for focus work, right? So there's a lot of great things that are better done not at home, then at home, but sitting on the laptop, taking calls is not it. So I think it's really this great opportunity and I can't help but think of those bank commercials, I think it was Capital One. The first, they kind of rethink a bank branch in terms of a coffee shop and just in an experience, as opposed to this normalized average vanilla doesn't really appeal well for anybody. 

>> Absolutely, and I think that you hit the nail on the head. Flexibility means where you work and it means when you work. And honestly, it also means how you work, right? When we talk about synchronous and asynchronous work. And I have a good example for next week. Next week, I built in a lot of focus time because I have a lot of actual heads down work that needs to be done. And my kids are going to camp at MIT. They're actually going to a Red Sox Baseball Camp, which is exciting for them. And I have the choice of going five miles into the office, where honestly, five miles of traffic in Boston can be a lot. It's not easy to get over that way. For what, because I know I have to do focused work, but I'm certainly not going to come back to my suburban home just to have to go back six hours later and pick them up. And there's a flexible office space up the street from MIT, half a mile, that I can drop into for $29 a day. 

And I'm going to choose that route because it's going to give me some really quiet time and a good office environment where I'm going to have the amenities around me that are going to satisfy my day. And I'm going to be close to my kids to be able to drop them off at nine and pick them up at three. And I think that there is a lot to be said in that little case study that can be expanded out to the tens of thousands of workers that are out there dealing with this sort of work-life balance. 

>> Right, so that was a great segue. I had my little note right here, Steve Todd from NASDAQ, you know, he talks about kind of different spaces for different activities. And that's another thing, I think, people need to get a better grasp on, kind of activity based everything. And the example he used in a podcast was when you have a customer that you want to have a showcase meeting with, you want a high-visibility, high-profile, beautiful space downtown. If you want to get together for collaboration work with your team, you want to be next to a traffic hub, a transportation hub, so we can all access it easy and get out. And then maybe to your point, if I just need something where I need some isolated time, I just need something close where there's no commute that I can sit and focus. And you talk about, I think it's number six in your list, right? The growth of these flexible timed places, flexible office places now being added into the mix with owned and lease. And it's an important kind of a new addition to the portfolio, not only just for the value that it provides for you tomorrow, but also the data gathering opportunities to find out how people do work when they have the options to work the way they want to. 

>> Absolutely, so flexible office space is something that we have been talking about for years. When I first came into CBRE, it was the very first assignment I was given, which is to figure out how this type of space is going to change the market. And that's when it was just a very small sliver. It still is a small sliver, but it was even smaller back then. You really had to squint to see that trend, but we saw it coming. And so we started to really track the space closely. We started to forge relationships with these providers of flexible office space to understand what they were seeing, why they were going all in on this space. We obviously went through some turbulent times of seeing what happened even before the pandemic with that space. And right now, we're tracking 90 million square feet of this across 50 of our markets in the US. And we saw the exponential growth that happened up till 2019. 

Then it started to pull back a little bit when there was a little bit of a falter in the market. And then the pandemic hit, and it pulled back to a greater degree. And I believe that that was healthy for it because it did contract by about 8%. But right now, it is still under 2% of overall inventory of the entire market. And most of our clients are telling us that they want to expand the usage of flexible office space. And the reason for that is because it is so ripe with opportunity for them to be able to solve for a number of different scenarios that may play out in their portfolio strategy, whether it be solving for a part-time office that they need to open up somewhere for a contract reason, or whether it be because they need swing space, or more importantly and increasingly interesting to them, whether it be because they want to offer their people more choice over where they work. 

And so that's why right now we're seeing a real rise in what we call access or subscription services, or I should say what the providers call. And it's basically like having a gym membership to a national chain where you can say, okay, here's my membership and I'm going to use it to swipe into any number of locations, depending on where I am. And I think that that is the real future. Now, the issue is that there aren't really any providers out there that have huge, huge scale. There are providers that have scale but none that have scale that's going to really satisfy everybody's needs. And so I think what we're going to see down the line is sort of aggregators of this space, where you can actually go to one place that's more of a technology overlay that allows you access into all of those spaces, depending on where you are around the nation. And I do believe that that will continue to grow based on just where I think the world is going, where think consumer behavior is going, and what I know our own clients are wanting. 

>> Right, so let's shift gears a little bit again, and it's number eight, I think, but it talks about what you just go on is what is class A space and how is the best space changing? And you say that that people want good space. So clearly, it's a priority 'cause they see how it ties to employee experience, it ties back to human resources and it's a much bigger thing now than just facilities and it ties back to this employee experience and retention. So what are some of the things? What's kind of the reordering of amenities, if you will, that define a class A space where before, if you had a foosball and maybe a coffee machine, you're in good shape or a health club and volleyball nets in the back, that's probably not enough anymore. 

>> No, so class A space is changing. And I would say what used to be class A space is if you had a fancy lobby with a lot of marble, high ceilings and a really nice gym or a coffee shop at the bottom, that kind of was your entry into, you know, and sitting on public transportation. And now I think that occupiers are getting much more sophisticated. And when I say occupiers, I mean tenants, are getting much more sophisticated about what they want out of their space. And they're realizing, frankly, the value that they bring to that space by being a tenant in that space. And so what they're expecting out of their landlords is a lot more operational than it's ever been. And in one of our reports, we broke it down into kind of three different buckets. We said there are human elements of the workplace that are changing. There are digital elements of the workplace that are changing. And there are certainly physical elements of the workplace that are changing. 

And if you start bottom to top, I would say physical is what most people think about, right? You have large floor plates, high floor-to-ceiling heights, access to a ton of natural light. I mean, I was just looking at a video that Google created around one of their new campuses and just the access to natural light and how they reimagined that has been next level amazing, but even buildings that are in the urban core, surrounded by a lot of skyscrapers, that is really important. And you can't even refurbish that type of thing into some buildings. That's either you have it or you don't. And a lot of newer buildings just have that big floor plates, high floor-to-ceiling, light, access to lots of natural light. So that's kind of the physical aspect of it. Then you have the human aspect of it. And that is how are my tenants, my employees even of those tenants, feeling when they come into this building? 

Am I making sure that they feel secure in my building? Am I making sure that they feel well in my building? Am I making sure that they feel healthy in my building? And increasingly, that is something as basic as indoor air quality, which you kind of assume, and you take for granted, especially here in the US, but increasingly, I think there's an understanding that it is not only a healthy thing, but also, it is a productivity thing because the more healthy air that we breathe, the more cognitively functioning we're going to be, and that's ultimately going to help everybody. And so not only having indoor air quality, but demonstrating good indoor air quality to everybody that walks through the doors is important, along with holding the yoga classes or having the nice gym or having the healthy food options at the bottom of the building. 

And then we also are seeing digital elements of buildings that are changing. So when I say digital, it could be touchless technology. There's a lot of discussion right now, a joke about just using your Apple Wallet to be able to scan into buildings. Also, touchless technology of how you engage with elevators, how you go through the gates of getting into the building. Also, actual applications. So everything in our life is run off of applications, right? I mean, it's a no-brainer. You just pick up the phone and there's going to be an app for that. But that really doesn't always translate into our physical built environment right now. And so increasingly, landlords are saying, we're going to have a building app that our tenants can use that's going to connect them to each other, that's going to connect them to the building, and that's going to connect them to the community around them in the form of any kind of retail or entertainment that's out there. 

So all of a sudden, Lenny Beaudoin, who's our head of workplace strategy at CBRE, likes to say that the building is turning into a social network itself. And I love that terminology. So those are all the different ways that buildings in class A buildings are being redefined right now, nevermind all of the sort of shared amenity space, flexible office space that now landlords are being really challenged to operate on a higher level. 

>> Right, I love it. I just had a post on the new LinkedIn Building 1 that they just opened recently. And they literally took out half, like, exactly half of what were workstations and replaced it, I think the headline is 75 different types of seating configurations. And I went to this design thing the other day and somebody said, "If you think of your space, you're trying to attract them. You have competition." And even you say at the end of your report, right? Make it so people want to come. And so to think of the coffee shop in the lobby or to think of even a club, and now I'm seeing kind of the clubby version of the WeWorks, if that's kind of the energy that you want to go with, and to your point, I think there'll be all this kind of segmentation about what is the environment that you're looking for right now to get done whatever it is you might have to get done. 

And it might be you want a pub environment, 'cause you want to hang out with the team and do some bonding and not necessarily have such a work environment. Really interesting opportunities to rethink things. And Steven Davis, who you were on with a couple podcasts, I think his comment that the variability now is going to be so high. It's not going to be this kind of standardization across either within the company or even across companies or across industries that people really have the ability to, as you said, listen to people, react to people, and provide a better experience very different times. 

>> Yeah, it is, it is. And I often wonder if I was asked to write that 2030 report now, what would I do? And I really think we, over the next 10 years, could see some buildings that just become completely flexible, neighborhood-oriented buildings, where you kind of join the building from a membership standpoint. And if you want private space, you go to floor four and five. If you want community space, you go to floor six or seven. If you want a place to record a podcast, it's over here. And I really believe that we could see some very, very interesting concepts out there. It's just figuring out how are those buildings valued because it's a very different equation to how space is valued and buildings are actually valued today. 

>> Right, well, that's a whole different, hold that thought, we'll save that one for later. But I do want to shift gears a little bit from the report and into some macro trends that they just butt heads, right? They just do. And when I was in school, in my real estate class, the great line I always remember is real estate's a big lumpy asset, right? It goes up slow. It lasts a long time. It doesn't change very quickly. And then you've talked about these big commercial leases with the best tenants and the best buildings are big, long and kind of static. And we've entered a world now, flexibility at a great interview years ago where you used to try to figure out what you do well and then optimize for efficiency. We now live in a world where you need to optimize for flexibility. And there's some difficulty there. And even within the office configuration, should it stay the same for the duration of the lease? And I think you said, you know, without a change in the lease catalyst, there's not a lot of remodeling that happens. So I wonder if you can speak about this tension between flexibility in the world in which we live today and the fact that these are kind of big, big lumpy, expensive assets that don't move very quickly. 

>> Yes, so that right there is the challenge. And I don't think that any of us would say that long-term leases are going to go away. At the end of the day, large companies occupy tens of millions of square feet. And that is not going to be unrolled even in the next 10 years. I think that it will always be the best value equation if you want more than X amount of square feet to go into your own lease agreement. And I think that generally most of the market would agree with that right now. However, there is a portion of the market that is better served for flexibility, whether that be small businesses, whether that be startups, whether that be pieces of organizations that are more volatile or more cyclical, it might need a little bit more flexibility. And those are the areas that organizations are looking for. 

And maybe that's 20% of the market, but right now, we only have 2% of the market that is poised and ready to solve for that. So that's a big delta between 2% and 20% or whatever the ultimate number is that we need to get to. And so what it's going to take is organizations and landlords and developers being very, very forward-thinking. And the challenge is that the value of buildings has been built off of how much vacancy do you have, what are your lease terms and rent rollers in that building, and what is the credit tenant of that building and of the credit quality of that building, of the tenant in the building. And I think that that equation has to change a little bit. And it's going to take time because what it means is that we need to see use cases that are real of buildings that have taken the plunge, that have had the foresight to put flexibility in it and to see the different revenue streams that actually brings the landlord to see if it makes tenants stickier in the building, to see if lease-up times are faster after a downturn because of this type of flexibility in the building, in order for some that might be more rooted in the legacy way of valuing buildings to start to scratch their head and say, "Hmm, maybe there's a different way." So I think that there is a lot of recognition that the market has to deliver more flexibility. However, there is a lot of skepticism still in the market by those that are bringing the big capital and have a lot of risk in owning these buildings and rightfully so, they need to see it proved out in order for this to really grow to the extent that it has to grow. 

>> The comment I was reacting to is in one of your other things I had heard is more about the more active relationship between the best tenants and the landlords to be even more kind of active within the duration of the lease, to be a little bit less set it and forget it, Mr. Ronco, rest in peace, and a little bit more dynamic and active because to your point, the client's business is changing fast. Their things are changing. So even if they're good and they're going to pay the rent on time, their demands are also again now changing in this increasingly kind of dynamic world in which we live. 

>> Yeah, I mean, absolutely. And long gone are the days where you sign a lease and then you don't see the landlord again, except to collect the check every month until the end of the lease. Right now, tenants, like I said, are expecting more from their landlords in an operational way. And that might be programming of the building. Like, what programs am I actually bringing to the building to engage my employees to want to come in and maybe learn something along the way? It might be keeping up with technology. Technology is rapidly changing. And what you put in today might be different in a couple years. And if I'm in this lease for 10 years, I want to make sure that you're rolling with those changes and you're keeping up with it, and you're being innovative. I want to make sure that we have those experience apps and that you're on that journey towards doing that. 

What are the types of shared service amenities that you're giving me as a tenant? Because where tenants do want efficiency is they only want to lease what they absolutely need. You know, I can remember being in a company that had a huge conference center that was vacant majority of the time, but we built and we leased, and it was a big showcase for clients. Well, maybe now landlords can build it. And we do see landlords building those big, shiny conference floors that have the best technology and have the concierge services and have the food and beverage associated with it. And now as a tenant being in that landlord's building, I can actually pay that landlord to engage with that service. And I don't have to build and operate that on my own. So that's what we mean by sort of landlords being more operational in sort of going on the journey. And by the way, if it's done right, then when my lease comes up, I'm probably going to renew with this building because I know what a good experience I've had there. 

>> Right, right. The other things that seems to have changed pretty significantly in your world is kind of direct engagement with HR. And you've talked about it a couple times in this conversation, as well as in most of the things that I've seen you in and getting ready for this, which is it's about the employee experience. And the big macro trend that we haven't talked about yet is the tight labor market. And the reality is if you look at any of the big demographic information, the tight labor market is not going away. The competition for talent is only going to get harder. So you have that, and then you've got all these younger kids, right? These digital natives that are entering the workforce, to your point, everything is an app to them. I talked to my son, like, "Everything now is an app to you." Of course you can do anything. You can do any app on your phone. And in fact, I would argue the comp for an experience is no longer the comp of a competitor in your industry. 

It's the comp of what's the best experience that I get on my phone or when I do go to the coffee shop or when I do go the temporary workspace. Those are two big things that employers have to deal with. So on the technology side, you talk about it, it's a full point of your top 10 points. We've talked about it a little bit, but how are people really rethinking the technology investment in the context of employee experience, which then drives retention, which is really important when you can't find people. How about keep the ones you already have in the building? 

>> Yes. Yeah, so, I mean, for years, I have been saying that employees are consumers, right? Because employees and talent labor is the best asset that an organization can potentially ever invest in and they need to. And I think that that table had turned even before the pandemic where they knew that employees were who they had to serve. And it wasn't just that employees were working for them, but they had something that they needed to engage with employees and be able to prove to keep them. Now, we are in an extremely tight labor market that is structurally tight. It is really not going to let up anytime soon because of the way that demographics and retirements and immigration are going, right? So this is not anything that is going to be a fix through a recession or anything else like that. 

And so now, we are not only in a space where we know the talent is the most favorable asset that we could invest in, but it's also one that is extremely, extremely competitive because there are a lot of opportunities out there for the good talent to jump and to go somewhere else. So as a result, organizations are really focused on what is the experience of employees, but it's tricky because typically, you have functions within organizations that are very siloed around human resources, around IT, around legal, around real estate, and they are all siloed. And if you have good relationships of the executives at the top and a good strategic direction, then maybe you can make progress in the right direction. But really, it can be quite different, 'cause many of them will have their own different strategic objectives. 

So what we see increasingly is the potential for there to be something like a chief places officer, where you have all of those functions kind of rolling up into one and maybe even adding a chief experience officer in there, where now, they are all tasked with engaging in the same strategic objective, which is ensuring that employees are getting the experience that not only satisfies them, but also satisfies the culture that the company is trying to create, right? Because it's not all one-sided. There needs to be two sides of this equation, where you kind of have a top-down approach of what the executives really want to see and that is absolutely fine, as long as there is a good value proposition as to why that is. And then the bottom-up, which is what do employees want. And then somewhere in the middle lies the truth. 

And I think that by putting in place sort of an overarching kind of omniscient executive that can understand all the different moving parts that make an employee happy and can have everybody marching in the same direction, that that is when we'll really achieve sort of that utopia that everybody's looking for. But it's going to take some time to get there. Now in terms of the technology that does that, I mean, you can say, "We're going to move to a more flexible world, we're going to move to a more hybrid workforce," whatever you want to call it. But if you're not investing in technology to help you get there, then it's really going to fall flat. And that technology might be the apps that you use to communicate with each other, to share files with each other, to understand when each other is going to be in and where you are going to go when you're in. And really serve up this information quite easily so that you don't have to go searching for it as the employee that's trying to operate in this hybrid world, but it's really all there for you. 

Video conferencing cannot be underestimated, right? There are a lot of technological advancements that are being made and are going to continue to be made in this space. And really making sure that if you support a hybrid environment, that there is really good technology, both within your lease space and also with the people that are dialing in or engaging in from a remote location, where that interaction is really equitable. And there isn't anybody who feels like we used to feel when we worked from home and we were on the end of the conference table on the start act saying, "Hey, guys, is the meeting still going on?" You know, that's what we don't want. And so I think that. 

>> I have a question, please call on me. 

>> Exactly. So I think that there's just a lot of change coming in the space, but it takes that one direction, that one strategic objective to really get there. 

>> Right, I'm curious in terms of the measurable objectives that you're seeing people use. I mean, we talked once before, you know, when I was at Intel way back in the day, I'm not the first person to tease 'em about RNB and we would get compressed and they would squeeze out two more inches out of your cube. It was crazy. If you haven't seen the Conan O'Brien bit on RNB, it's pretty funny. But right, that's a measure of efficiency, right? How many people can we fit in the floor space, whatever they're measuring, versus measuring productivity versus measuring retention versus measuring engagement and tying those, you know, which are really more productivity versus kind of cost factors. And we saw it in IT, the world from which I've been spending most of my career, which is I don't want to be a cost center anymore. 

I want to help use the tools that I have at my disposal to grow the business, to make people more productive. So it's such a different way to think about things. Are people starting to incorporate some of those maybe softer productivity metrics in with the pure space utilization and square foot metrics and those types of things? 

>> So that's hard to say directly right now, but I will say that we were past the days where I grew up, right, when I helped run a global real estate organization within a big financial institution. And it was about efficiency. Our performance was based on what is our square feet per person? What is our cost per person? How flexible or in what kind of contraction and expansion clauses do we have? It was all very, very metric non-human related. And what I've seen over the last 15 years is that it is absolutely changing. And when you just come to space, it's no longer about those metrics, 'cause we're moving away from space that is made up of cubicles and offices that can be easily measured. 

And we're moving more into what you talked about, which is LinkedIn having 75 different types of seating settings. Well, how do you actually measure that? Well, what we're seeing is that you're measuring that through utilization statistics, right? Now, at the very baseline of that, that has been just badge swipes. How many people do I have coming in to my building? And how many people could I have and therefore how successful am I at drawing people in? But what we're seeing is people getting very sophisticated with this now and using sensor data in order to truly understand when they do come in, what spaces are they using? What spaces are they not using that should get reconfigured? Is there space that's too crowded? Is there space that's underutilized? And there are all sorts of different metrics that you can start to now pull that are really fruitful and that can really be deeply analyzed around how people are using space. 

Our occupancy insights group is a wonderful group at CB and they have been doing a report on everything that they're finding in this space. Another one is going to be coming out by the end of this year, really diving deep into what does sensor utilization look like because that is what everybody wants right now going forward. Now to take that a step further, it's how happy are my people in my space. And I think that engagement surveys, employee surveys are something that many organizations are doing now to be able to tie that happiness and engagement factor because don't forget, just because more people came into the office before the pandemic, it doesn't mean that they were engaged, which means that they probably weren't productive and they probably weren't adding to the bottom line of the company. And I think that really making sure that employees are engaged going forward is important, and then productivity is the holy grail. 

And productivity is pretty easy when you're making widgets or when you can base call centers off of success of calls or keystrokes or whatever it might be. But when you get into the knowledge worker, that can be a lot different and it can be a lot more difficult. And that's where this management layer is really important we think going forward. And it's interesting 'cause we've spent years kind of delayering companies. And I think now managers are going to be more important in order to have that continuous feedback loop around what is it you're supposed to be doing? Am I giving you the direction that I need while still giving you the leeway to be able to have the latitude to do it as you want, but then having checkpoints to make sure that the right progress is being made on those more knowledge worker based projects. And that means training is going to be needed for our managers to actually even get to that continuous feedback loop. But that's where we see kind of the world going. 

>> I have like four hours worth of notes, but I'm not going to keep you that long, I promise, but I have a whole page on managers. I think your point there is so right on. People that were raised to manage a certain way with proximity and the ability to look over somebody's shoulder and see if they're struggling or not are not trained. They didn't get the memo on how to manage people when you're not there. And as you've pointed out and I think we're in very much agreement, it's ultimately about communication and it's about managing to objectives. And I think it's a higher standard of management for some people are comfortable and to your point, getting to know their people and really managing the individuals and empowering the individuals to go get stuff done, you know, versus just making sure they check in every day and whether they're there. I think it's a real management challenge and I think it's kind of the mission of this show is to get people like you on and share best practices about how managers can do specific things to actually do better. 

I think that's such a big piece of the pushback that doesn't necessarily get enough attention. They're not stupid, they just need help. They need the tools. They need the best practices. 

>> Yeah, everybody has to be taught and trained and want to do it also, right? Because it's hard to be a player coach and have a lot of individual work to do and also have that level engagement with your people. And that's why I think the role of a true manager and leader going forward is really, really going to be important in this decentralized world. 

>> And to not to equate pandemic instant light switch thrown into remote work as the equivalent of what this could be and what the future can be. And even Ryan said his team's excited about the future of offices. How cool, you go to your office and it looks like a club, or it looks like a coffee shop, or it looks like a library, you know, versus it's just a sea of gray and based cubicles, but we're getting to the end. And I want to focus, before we leave, on two things that came out of the survey, which I don't think most people would guess. And that was the relative rank order and importance of both DEI and sustainability in the ability to basically attract and retain the best talent, well, that it also plays into your real estate strategy as well. But the fact that both of those played into the top 10, the fact that the leads signs we see all over when you cruise down any central business district, were you surprised? 

Is that new? Is it growing? I was surprised, you know, we talk about it's the right thing to do, but so often we find the right thing to do also is actually a good business thing to do too. 

>> Correct. You know, it was not a surprise to us. I mean, we have seen last year at this time when we were setting our agenda for this year, I said, "We have to do more on sustainability thought leadership because it is where organizations, both on the investor side of our business and on the occupier side of our business are focused." And the reason that they're focused there is because they have real targets that they have set that are publicized, that they are going to have to meet. And why do they have those targets in place? Well, it's because yes, it's the right thing to do, but it's also because it's good for their brand. It's good for their employee retention because employees increasingly want to make sure that the organization that they're working for is doing the right thing. And certainly, it is good for their shareholders because their shareholders want to see that this is happening. 

And so this is having a real circular effect on the economy, 'cause really, every single thing that you touch along the supply chain has implications on sustainability, and real estate and all the downstream effects of real estate are a portion of that. And so what we are seeing is that a lot of organizations are saying, "Okay, every decision that I am making along my real estate life cycle has an implication on sustainability that I'm going to pay attention to." And so from a occupier standpoint, which is what I'm most familiar with, right? You have organizations that are trying to find where they want to be in terms of location. Well, understanding all the factors that go into location selection around climate and natural disasters and access to green energy could be really important factors when deciding on where to even locate. 

And then you get down to transacting on a lease once you've picked a building and you've picked a location, and is the landlord willing to work with me and create a green lease so that I know that both sides, both parties are incentivized to do the right thing here and that we actually have it in writing 'cause neither landlords nor occupiers can go on this journey alone. They need to do it together. If I'm building space, am I using suppliers that have the same sustainability principles as me? Am I using sustainable materials in my building? And then even when it gets down to operating, am I able to measure the output that I am creating around energy usage or waste usage or water usage? Because if you can't measure it, then how do you know if you're doing better? So those are just a few ways that we're seeing that organizations are really starting to wake up from a real estate standpoint and say, we have a lot of work to do, because more and more studies are coming out that show if we do not start to take action now, then there is going to be irreversible damage that is created to our planet. 

And nobody wants that on our shoulders for future generations. So I think that we are spending a lot more time focused on this. It is a piece of every single part of our business. And you're only going to see it grow in terms of interest from the real estate community, both for investors and occupiers. 

>> Yeah, it's just interesting that it's the way to execute priorities, which you said in another interview somewhere, which I though was really interesting, right, is that people want to do better, right? They're making pledges, they're making commitments. It's important to their people. It's important to their corporate mission, but then it's like, okay, so what do you do? And obviously, their real estate operations provides a giant opportunity just like, you know, their spend and there's these huge kind of buckets of ways that they can make huge influences that they have at their disposal to really change it. And the thing that I thought that you said was so thought-provoking on the fresh air is not only do you have to do it, but you need to demonstrate to everybody that you're doing it and they need to see and feel good about it so that when they walk in the office, they feel good that they're breathing fresh air and that they know that they're part of an organization, right? 

They want to belong to something that's bigger than them. That's a common theme. Anything we didn't cover that we should have, but also just have you react to this quote from Steven Davis, right? "Workplace," he said, "is not an office." He said, "Redefine it as a dynamic form of working arrangements." Which I thought was pretty, you know, kind of an interesting way to think about it, really thinking about it from an activity based point of view, as opposed to a physical structure point of view, and then work backwards into the physical structure based on the activity. 

>> Yeah, I mean, absolutely. I think that the future of work is really, really exciting right now. I don't think that there's anything that anybody should be nervous or anxious about. I think it's a natural evolution of humans and the activities that we take to make our economy work. And I am excited about it. And I think that finally, people are being seen as individuals in the workplace, whether that be from a DE&I perspective or from the background that they come from around what makes their home life work or whatever it is, everybody's understanding that they're an individual and that there's more to their life than just work. And work now can be done from anywhere because of the technology, thankfully, that we have innovated and that we have to support everything right now. And so with that evolution means that we have to change practices and we need to change management styles and we need to change cultures to go along with all of that. And that will take time, but I do realize and really feel good about the fact that there is an acknowledgement out there right now at the highest levels of organizations that things need to be different, that employees want something different. And that's when real change can happen is when there's that acknowledgement by the people that can actually do something to change. 

>> Yeah, well, thank you for all the work that you do and collecting that data and communicating that data and sharing it so we can all benefit and keep our fingers on the pulse of what's going on. Really fun conversation, really appreciate the time today. And the report was great, and it comes out once a year or once a quarter? 

>> Comes out once a year, but sometimes we decide to do it a couple times a year. So we're going to do a mini report coming out in the fall based on new data that we're collecting, as we speak right now. 

>> Great. Well, thank you very much for your time and have a great rest of your day. 

>> Great, thanks for having me, Jeff. 

>> She's Julie, I'm Jeff. You're watching "Work 20XX." Thanks for watching and listening on the podcast. We'll see you next time. Thank you.

Links and References 

Julie Whelan, Global Head of Occupier Thought Leadership, CBRD

CBRE Profile


LinkedIn Profile

CBRE Resources 

CBRE Spring 2022 US Office Occupier Sentiment Survey -


Selection of Julie’s Media Appearances 

Best of Both Worlds: Hybrid Work & The Future of Office with Julie Whelan and Steven Davis, The Weekly Take Podcast with Spencer Levy, CBRE, Episode April 25, 2022 

Taking Care of Business: Reimaging the Office, with Juile Whelan and Steven Davis, The Weekly Take Podcat, with Spencer Levy, CBRE, Episode May 2, 2022

The Return to Work - Is it working? Lauren Rublin, Barrons, May 2022 


A few more of Julie’s Media Appearances 

WMRE Common Area: The Latest Outlook on the Future of Offices with Julie Whelan, Ep 74

Wealthmanagement Informa YouTube, Informa, Jul 2022

Connected: Building Meaningful Business Relationship, Evolving Workforces Podcast with Spencer Levy, CBRE, Episode July 2022

Company plans to return to the office taking longer than expected, Kelsi Maree Borland, Benefits Pro,  May 2022 

Overwhelming Majority of companies will work on a hybrid schedule, Kelsi Maree Borland, GlobeSt.com, May 2022

Report shows promising future ahead for flex space sector, Catherine Sweeney, The Registry, Bay Area Real Estate, Feb 2022

Five Occupier Trends That Will Define the Second have of 2021, Julie Whelan, Newsroom, Silicon Slopes, July 2021 

The rise of ‘third workplaces’, Erica Pandey, Axios Media, June 2021

The Future of Flex, Christelle Bron, Manish Kashyap, High Street Residential, July 2020

Innovation in Office Sector Only going to accelerate Post-Covid, Nareit REIT Report Podcast, Nareit,  July 2020 

Off to Work We Go: The Future of the Office, with Julie Whelan, The Weekly Take Podcast with Spencer Levy, CBRE, July  2020 

Shop Talk: The flexible office space market - today and in the future, Institute for Real Estate Operating Companies, Oct .2019 

In Conversation with IWG, CBRE YouTube, Oct 2018

Solving for the Future Workplace (Part One)What’s Next Podcast, CoreNet, April 2018

The Future of The Workplace: 12 Takeaways From the Office Evolution Conference, Carolyn Cirillo, All Work, Nov 2017


Additional CBRE Resources 

CBRE The Future of Work

CBRE Insights and Research 

CBRE: Utilization Data: How to Measure and Use It 

CBRE Report: What are the property value implications of flexible space? CBRE, Commercial Cafe 

CBRE Global Outlook 2030 - Welcome to the age of Responsive Real Estate: Ten Ways you’ll experience Real Estate Differently in the Next Decade, CBRD, March 2020

Why workplace sensors are the key to space optimization and efficiency, Brandon Forde, CBRE, May 2019

‘The Building is turning into a Social Network’, Lenny Beaudoin, Global Lead, Workplace, CBRE, CBRE Profile, LinkedIn Profile,  


Other Links and resources 

Open Office: How LinkedIn Redesigned It’s flagship for Hybrid Work, Wall Street Journal, Wall Street Journal,  WSJ.com, July 2022

Inside LinkedIn’s New Hybrid Office With More Than 75 Seating Types | Open Office | WSJ, Adam Falk, WSJ, Lisa Britz, LinkedIn, Robert Norwood, NBBJ, Wall Street Journal YouTube Channel,  July 2002

Redesigned for Hybrid Work: The Wall Street Journal Features LinkedIn's New Headquarters, Studios.com, Studios Architecture, July 2022

See Google’s Futuristic new 1.1 million-square-foot Bay View campus, Beth Kowitt and Alex Scimecca, Fortune, May 2022 

Office demand comes roaring back as stocks in the space play catch-up, Diana Olick, CNBC, May 2022 

5 Ways to Fix Office Air and Get Workers Back, Michelle Peng, Charter, in partnership with Time, Feb 2022 

Top 5 Priorities for HR Leaders in 2022, Gartner for HR 

The Future of the Flexible Workspace Industry, Opportunity Network, Aug 2021 

4 Modes of Collaboration are Key to Success in Hybrid Work, Mary Baker, Gartner, June 2021

What the new world of work will actually look like, William Arruda, Forbes, May 2021

The Rise of working from home, Special Report, The Economist, April 2021  

Appraising Industrial and Flex Buildings” What info do you need? McKissock, McKissock Learning, Feb 2021 - Now Colibri Group 

‘Set it and Forget it’ Ronco Showtime Rotisserie Informercial (2001), Allan Smithee YouTube Channel, May 2017

Conan Visits Intel’s Headquarters | Late Night with Conan O’Brien, Conan Classic YouTube, May 2007 

Kastle Back to Work Barometer, Workplace Occupancy, Recreation Activity vs Office Occupancy, Kastle Systems

Workplace Occupancy Barometer, Kastle Systems

An Office Building Occupants Guide to Indoor Air Quality, US Environmental Protection Agency (EPA) 

Ron Popeil, Inventor, and marketing personality, founder of the direct response marketing company, Ronco 

Jeff Frick
Founder and Principal,
Menlo Creek Media

Jeff Frick has helped literally tens of thousands of executives share their stories. In his latest show, Work 20XX, Jeff is sharpening the focus on the future of work, and all that it entails.