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The Flexible Office Economy with Mark Gilbreath [PODCAST]

by EQ NewsJul 17th, 2019

This podcast originally appeared in PodBean on July 17, 2019.

Partial transcript below:

Mark Gilbreath: This is The Flexible Office Economy and I'm Mark Gilbreath. This week we're talking about new platforms and traditional institutional owners that are transforming commercial real estate from the inside, redefining work place experience, reimagining what speed means and driving new asset returns. My guest today is Lisa Picard, President and CEO of EQ Office with over 25 years of property development experience. Lisa joined EQ in 2016 as COO and was named CEO in 2017. For those of you that aren't familiar, EQ is the office platform of Blackstone Group, the world's largest real estate owner. Since joining the firm in 2016, Lisa has become, a particularly outspoken advocate for change in the commercial real estate world, and in particular amongst, the institutional real estate category. Welcome Lisa, and thank you for joining us today on The Flexible Office Economy.

Lisa Picard: Thank you Mark for having me.

Mark Gilbreath: I know we both spend a good bit of time on the road, so I have to ask you, where do we find you today? I know you're domicile is divided across at least three geographies, but where are you today?

Lisa Picard:Yeah, I'm sitting in our office in San Francisco today.

Mark Gilbreath: Your friends and colleagues know that you're an avid cyclist. Do you have an evening ride plan?

Lisa Picard: Uh, you know, not today. I did manage to get a ride in Annandale Park, a mountain bike ride yesterday. So today is going to be just a run to Pilates this evening. You've got to keep mixing it up and keeping the body guessing, otherwise, you know, it goes a little stale!

Mark Gilbreath: So to set the stage, we're talking about the Flexible Office economy and if I zoom out and look at the world that we've come from, for occupiers, the customers, not that long ago it seemed completely reasonable to sign a 10 year lease and it seemed completely reasonable to wait a year or more to move in while the space was fitted out and built out. It seemed reasonable to march your employees into a homogenous cube farm and it seemed completely reasonable to live daily with the burden of underutilized space over the course of that lease term, while you maybe grew into it. That's very much different than the world that we're living in today and the expectations of consumers have radically changed. Tell me about the point of view that you're driving amongst your team as you shift EQ's perspective. And to what extent is there a different vision of how real estate works, in contrast to that which "once seemed reasonable"?

Lisa Picard: Yeah, it's clear that the way that we've worked as changed and, I think that there are three things that in my mind have fostered that change in the way we work. One is we as consumers all have amazingly elevated expectations. We want everything everywhere, all the time. And, I think that technology has enabled that. Technology has enabled a transparency and a speed and a higher level of expectation that want in our ordering of food to summoning a car to pick us up. And what that's done is it's created an enormous pressure on every business because every business is facing a customer with elevated expectations.

Specifically for work, I can remember working tethered to an outlet and certainly had a laptop. But, without sort of the longevity of the battery we didn't really experience mobility like we do now. Having the power of this super computer in our hand has allowed us to really do work anywhere, and we do. So as a result, we're seeing the nature of what we have at home, we want at work. And we want basically all of those comforts to feel very hospitable and we want them to be where we play and where we work and where we live.

And then the last thing is that talent is so critical to the success of an organization. What we're finding is that, we've come from an era around the machine and the machine age where we really looked at efficiency as the metric of productivity for work. And I think you'll still find companies are struggling with that whole notion "the productivity of work". And the fact the matter is that we are in a creative economy. And when you're in a creative economy, looking at what generates value in a creative economy is innovation and there's nothing efficient about innovation. In fact, what you're looking for is effective work and you're looking for success culture.

And so the third thing I would actually say is that culture is really a new capital because it's actually driving the value within work. So when you put all of these things together, you're basically saying that the customer, call it the worker, needs an entirely different product than what the machine age delivered us.