Craig Leibowitz, Executive Director at Avison Young | Humanizing the Real Estate story | 33:53

Transcript

DA: Welcome to TEN, the Tenant Experience Network. I’m your host David Abrams. We are excited to be sharing with you a series of interviews that we recently completed with guests that appeared on the 2021, “Power 100 List of Commercial Real Estates Most Powerful Players”, published by Commercial Observer. In this case, I want to thank James Nelson, Principal at Avison Young, Head of Tri-state Investment Sales, who made the introduction to our guest today, Craig Leibowitz, Executive Director, Innovation and Insight Advisory, US at Avison Young. In this episode, we will learn about Craig’s journey to his current role, where with his team, he designs custom data analytics products that enable occupiers and investors to solve their complex real estate strategies. We will tap into his passion for real estate and thinking around, getting close to clients. We will hear his views on how his team is working to humanize the real estate story, offering more transparency and a greater understanding of what it means for all users. Craig will also talk about his thinking around the transition back to the workplace and how variables such as the employee, function group, company, industry and market must all be considered when making decisions. Now I’d like to welcome Craig to the show. Really glad you could be with us today.

CL: My pleasure. Thanks for having me.

DA: Yeah. Awesome. So let’s get started with your journey to your current position as Executive Director, Innovation and Insight Advisory at Avison Young, leading a team that designs custom data analytics products. How’d you get started? Walk me through that, maybe share a little bit more about your current role.

CL: Sure. So I kind of fell into commercial real estate. Honestly, I was not hired to do research. I wasn’t hired to do innovation about a decade ago and it feels like it was yesterday, honestly, but really my journey began with a passion for real estate first and foremost, and it wasn’t, hey, buildings are tangible and we could see them and touch them and feel them, no. Whenever I interview candidates is typically what they say, but for me it was a psychology behind real estate and what really kind of peaked my interest in commercial real estate specifically and New York city more generally was actually seeing the re-development of the World Trade Center complex from 2004 when I interned at a bank in what was then the World Financial Center to what it ultimately became and really getting my arms around the complexities and the sensitivities behind that redevelopment that really peaked my interest and allow me to say, maybe I want a career in this field of work. I didn’t know exactly what that would look like. So naturally I graduated in the global financial crisis. So it was either going to go into accounting or be a barista at Starbucks, there’s no between. Those are my options afforded to me, basically at that point in time, I had opportunities to work with commercial commercial real estate that dried up given the economic environment at that time, but I was lucky enough to join JLL in their industrial practice, where I was not hired to do research, I was there to support their really burgeoning industrial brokerage practice and this was back in 2011 when industrial wasn’t then what it became now, given the last mile distribution and the acute need for warehouse distribution space in markets like New Jersey, New York city and elsewhere around the United States. So like during that journey, I kind of fell into research because back then there, they looked to me and they said, you know words and numbers. So I said, I guess so. From there I had an opportunity to ultimately transition to New York city where I first studied the downtown leasing markets it all came full circle and I was lucky enough to learn from people who were quite a bit smarter than myself, who had unique backgrounds, who enabled me to take that next step to start to analyze the market specifically the New York city real estate market through unique lens, all different by data and unique interpretations of that data. One of my mentors is Johnson Keitus who became the Chief Innovation Officer at Avison Young about two years ago, actually almost exactly two years ago to the day, believe it or not, so he joined the firm, there was a need for people with my kind of expertise, those who could interpret real estate markets through unique lens and in my current role, which has kind of taken on a journey of its own, but part of my job is what we referenced as Sales Enablement, meaning working with our clients to produce custom, predictive or real-time data analytics tools to solutions, whether it’s an occupier or an investor, a single location, multiple locations, office, or any other property type, real estate or real estate have decent data like demographics and economics, and another part of my job is around thought capital. So it was taking the same data, but just interpreting it through a unique lens and along the way, I spend a lot of my time just doing exactly that designing data analytics tools that really don’t have a precedent in the, in really in any appropriate shop. So the way I kind of think about it, the more or less the McKinsey approach towards data analytics, but merged with the unique interpretation of real estate fundamentals that you find at any real estate services firm, definitely with Avison Young at the top of the list, right?

DA: Well, listen, with that background, I’m really excited to have you on the show today. Cause I think you’re going to bring a really interesting perspective to our discussion and, and just so you know, when I was first starting out, I did go into public county. So I actually started in public accounting for four years before getting into marketing, a long career in marketing before, you know, I became a founder and CEO of HILO. So, you know, I didn’t think about a barista back then. I have thought about it a couple of times along my journey as a founder, am I going to end up just being a barista, but so far we’re sticking with this. So I’m just curious why you think you were so uniquely suited to this opportunity. What sort of helped you to become successful? You talked about some mentors, but otherwise any skills or colleagues’ books? What has sort of contributed to you finding this niche within the industry?

CL: Beginning with a passion for commercial real state and it’s not data for data’s sake. It’s because data is everywhere. It’s just the interpretation of that data it is where people like myself and so many of my partners over the years come into play and I was just having this debate earlier this morning with our entire New York brokerage team Here at Avison Young about, hey, listen, I could say the availability rates 19% or say 17%, but at the end of the day, what does it mean for you, you being the client? And I’ve learned from so many people, whether they’re in the banking industry, for example, where I had some great internship experience while I was a rising sophomore to senior in undergrad, to when I became a full-time employee, I started at City Group and I learned how to really work with clients. That was my first exposure to client work when I was a bright eyed and bushy tailed, 22 year old and working in accounting and I learned to partner with private equity shops. I’ve a very discerning audience but one that gave me an acute appreciation for how to best work with clients, and when I learned, when I transitioned to commercial roles, it was the closer to get to client work. Perhaps the higher the trajectory from a career perspective it could become and what I did when I joined JLL, was I really learned from people with lot of unique and interesting backgrounds, whether they were leasing brokers or capital markets professionals, whomever, leaders, analysts, associates, VPs, managing directors, whomever, and of course my counterparts across the country from a research perspective who I just have an even stronger appreciation for today who helped me to kind of fill in the blanks, so to speak, because what was always there was the passion, but what I really needed was exposure, exposure to more people and through those people, exposure to clients and through those clients that help to kind of reframe how I positioned myself, but also interpret markets through a lens that I think is pretty unique and if you could make it in New York, you could make it more or less anywhere. At least in my warped opinion. I don’t know if that’s exactly true but it enabled me to brand myself through a unique lens and I couldn’t have done that without so many people, and of course I went to graduate school part-time, which gave me again, an opportunity to fill in a lot of those blanks to learn a little bit more about the development process, den equity, capital markets, learn from people who have really unique backgrounds and we as an industry tend to be very insulated specifically, within the real estate services realm, so it gave me an opportunity to learn from people who are property managers, asset managers, portfolio managers and with all sorts of backgrounds domestically and internationally, and it gave me that much more of an appreciation for really just having a career in this line of work.

DA: Yeah, that’s a great journey and great that you tuned in very quickly to the value of establishing those kinds of relationships, obviously connections and the impact that they would have on your business, but more so, even though you’re very focused on the data, you repeatedly have said that it is about getting client connected and dealing with people because that’s what it’s all about and I’m going to talk about that a little bit later. So, I love that. Listen, let’s agree that living through a pandemic, not something that any of us had planned on and it’s been really difficult and really challenging for a lot of people in many ways, that being said, we’re at a point where we don’t think it can really be an excuse any longer, we’ve taken the perspective that now is the time to be better, to build something better, create something better. So if you had an extra a hundred thousand dollars of budget right now, how would you spend it and why?

CL: So I’m a part of a really talented team that has a deep, not just real estate market expertise, but also analytical expertise. I would spend that a hundred thousand dollars on a handful of unique data sources that enable us to tell the real estate story, and I think it’s not just vacancy or rents or cap rates, the way that we would traditionally tell the real estate story through an occupier or an investor lens, but I would anchor it more so in real estate. Unique interpretations of demographic trends to name one example. I think that’s where the real opportunity lies in the current environment, because that is what informs decisions and it’s a demand driven environment at the end of the day. So what informs an industrial operator to lease a specific warehouse or distribution center in New Jersey? For example, what anchors the decision of an office occupier to go to the Empire State Building versus One Vanderbilt as another example, it’s not just rents. It’s also about, the employee experience is about, access to talent, even in the post COVID environment, which is very under-stated and how could they partner with people like myself or others within our organization to inform them, to make a decision in an environment that has no precedent?

DA: Well, listen, I think space is a commodity. So the question is, what else about the location they choose can be a differentiator and can make for a compelling reason why that is where they need to be. Right?

CL: Exactly. Right. And there’s so many considerations in mind here and what motivates one company can be completely different from what motivates another company and those motivations change and they change radically. As we’ve learned, if we’ve learned anything from the post COVID environments, we were in a environment where, as February of 2020, it was all about agglomeration theory was about jamming as many employees into one roof or maybe a campus environment, whether it was over your left shoulder and Bryan Park for example, is one of those locations or just a single footprint. But now, because the future of work has changed, it means motivators have changed too. So little kids hearing our message to whatever works best for our clients, whomever, they may be.

DA: That’s a good segue to our next question. So, there’s a lot we don’t know, certainly we’re starting to gain some insight into what the roadmap forward looks like in terms of the return to work places. It’s now begun in many cities, including New York where you are, certainly it’s going to be a slow process but I think we can all agree that flexibility is going to continue to evolve as an emerging theme in commercial real estate, recognizing that people are going to continue to work from anywhere. It was not just only a phenomenon that is going, we’ll have to only take in place during COVID. So knowing that that is going to be something that will continue flexibility working from anywhere, including the home, just wondering what your thoughts are on the implications for the multi-family and office sector, specifically.

CL: The war for talent is real. It didn’t disappear during the pandemic. So I would look at the labor market as a barbell. So one on the spectrum, you have an office using appointments. The other end of the spectrum, you have like, pickers Packers, individuals who would work in a warehouse setting, for example, those are the remain the tightest segments to the labor market today, which is a key differentiator between now and the last couple of recessions specifically, when for example, banks were shutting head count and then shutting off the space accordingly. That’s not the case anymore. So the way I would think about it is first and foremost, having some air of flexibility when it relates to returning to the office, and it’s an adjustment period. So I know I experienced it myself when I grew a pretty gnarly beard, I didn’t, couldn’t get a haircut for like 12 weeks, I looked ridiculous. And it was kind of like a transition to becoming, back in the office, recalibrating the way I worked, which was back then literally, I was working off of a 14 inch screen surface pro and that was it. So like my eyes were, I lost my eyesight at stages back then, during the quarantine period but the point I’m making is that flexibility is key to your point and it does take time for people to make that transition. There’s a transition period to simply get on a train again, to walk to the office, to take a bike, whatever the mode of transportation is. That’s the transition working five days a week from an office environment, takes some time to get used to, especially when you’ve been working remotely 24/7 more or less, which has its own quality of life implications in a very negative sense to re-calibrating the way they used to work. So it’s not as simple as I go back to the office Monday to Friday, turn on a dime you have after labor day, you’re back in the office every day. I think there’s a little bit of a transition that comes with that and that’s what worked for me, and I know that what’s worked for others that I’ve spoken to, whether they’re our colleagues or clients. So maybe it’s two days a week, maybe it’s three, maybe it’s four, maybe it’s hey, taking a page out of the American express playbook and working remotely on Fridays is a start, which is something they’ve done for a long time, which has worked for them specifically in their workforce. So it’s not just turning it on a dime. It’s kind of like a spigot. I would turn it ever so incrementally to get people comfortable returning to the office. There are a lot of variables at play here. Of course it begins with the employee, then it’s function group, then it’s company and then industry and then market. So there’s five different variables at play here. What works for one may not work for any other. So that kind of begets the whole air of, hey just be mindful of that because it is psychological at the end of the day, and your exposure to others so far can be pretty acute in markets like New York, and I used this analogy in our meeting this morning, give her taking NJ transit to Penn station and you’re transferring from Penn station via New York city subway to times square, then you’re transferring again, thinking about your exposure to other people, even if you are fully vaccinated. That’s a really big hurdle for some people to jump through. So just to be mindful of that, if you are in a place where you need to start to really become more productive, because that’s really what the mindset is here, how do we get to become more productive? And we can get acknowledged as someone who averages 35 to 50 zoom calls per week that simply are not productive. I’d rather walk down the hall and say hi for five minutes than scheduling a 30 minute zoom call to do the same thing. And there’s something that’s to be sad about that and accommodating for example, conferencing spaces and flexible working arrangements, certainly other variables at play here that I think will bear fruit across industries and across geographies from an office perspective.

DA: We ended up in this remote only scenario, with a jolt to the system, right? It was literally overnight. I know within a 48 hour period, we virtually all across North America went remote. So to think that we’re going to come back over a 48 hour period is completely unrealistic. So I think you’re right, and I love that sort of spectrum that you laid out in terms of those five steps or five almost, constituent groups, stakeholder groups, that all need to sort of figure out how we interact again with each other. So I think that that’s really insightful. I know for me personally, I had my first in-person client meeting yesterday in downtown Toronto, I got an Uber, it wasn’t quite ready to do public transportation yet, but it was exhilarating. I got to tell you, like, it was really exciting and it was just great to have a conversation with someone, across the table in a boardroom and to do business in that manner again. So, I think it is going to be a slow but steady process and people I think are going to get pretty comfortable pretty quickly once again. So it’ll be interesting to see where it all nets out.

CL: Yeah. A hundred percent. I love that. And I remember when I did my first in-person client meeting post COVID, it was about three months ago and it was, everyone was fully masked and we were all socially distancing, but it was just weird. It just felt odd, you know? And now thankfully we’re in an office environment at least here at AY in New York on a part to full-time basis, depending on our choosing, and I was just presenting to our interns yesterday and it was a breath of fresh air.

DA: Right.

CL: Honestly, I’ve been looking forward to that again and look forward to continuing to do so, knock on wood.

DA: Yeah. Okay. On that positive note, let’s take a short break and we’ll be right back.

COMMERCIAL BREAK

DA: We’re back with Craig Leibowitz, Executive Director, Innovation and Insight Advisory at Avison Young, thanks again for being with us.

CL: Pleasure.

DA: So the commercial real estate industry is moving faster towards recognizing that their core business is not just about building ownership, but rather it’s about creating the best customer experience for their tenants or residents. We like to say, places for people. So can you share your thoughts around how we will define and deliver amazing tenant experience in 2021 and beyond?

CL: Sure. It’s certainly a complicated equation as we were discussing earlier, but it is deeply psychological at the end of the day. You want, your customers, whether they’re renters or office occupiers to simply want to return to the office environment, where they live, whatever it may be, and what goes along with that is kind of like using the spigot analogy, once again, there was a period of time and I think going back to the office for several months now, I’d actually been going back since believe it or not, last summer, where there’s going to be a high end period of sensitivity in a lot of markets, Canada being one of them, of course, where you’ll have to fill out some paperwork every day, or you’ll have to make some disclosures around your exposure to others, or whether you have symptoms of the virus or whatever they may be. So there’s going to be a little bit of an adjustment period, but that’s warranted to, just to kind of get your workforce a little bit more comfortable about returning to that office environment. And you could go through multiple layers that could be from, I know we had this in New York where I work at a separate line of disclosures for the office building and for the company. And that’s okay, because it made me feel a little bit more comfortable about simply reintegrating the office space. It’s the little things like that that will make a difference. There’s been some studies about, for example, the way offices have been configured now, or in the post COVID environment versus the pre COVID environment that could limit people’s exposure to others. And I’m not a doctor by any means as anyone could appreciate I haven’t even for more than a minute, but there’s a science behind that and to deliver a space that limits people’s exposure to others in the event, God forbid, there’s the pandemic becomes a part of the equation and a future state as well, post vaccine, then there’s certainly an opportunity to deliver that kind of space as well. And that space isn’t necessarily, the jamming people into communal working environments like sardines, like was the case in the five-year period, preceding the pandemic, at least in markers like New York city, but to deliver a more productive working environment, one in which people feel as though they could, they have the comradery amongst their workforce or opportunities to collaborate in ways that are unique or simply more productive candidly, but also limit their exposure to other perspective or other fellow employees and soon enough to the point you made earlier, clients.

DA: Right. Right. You know, I think there’s a, I think that the whole notion of healthy and safe buildings is going to be a major contributor to what that tenant experience looks like and giving people the confidence that they can begin to come back to the workplace. We of course at HILO are very focused on ensuring that communication is really elevated and that we can stay connected and communicate at a very high level because information is power, so the more that we can share and tell, we think that’s going to be a pretty important influencer. So, I think the whole space is about, building trust, building confidence, continuing to be focused on what that experience looks like. These are all going to be major contributors to bringing people back and seeing how that takes shape over the next, you know, many, many months. So I think this’ll be a conversation we need to continue to check in at, and then also look at some of the data and research that you’re doing to help inform, sort of the things that we could be doing to move that process forward, perhaps even faster. Just curious, can you share any details about anything that you’re working on that is new or a challenge that you’ve been facing in light of the current world circumstances that you think our listeners might find interesting?

CL: Sure. I have to send your listeners an NDA first.

DA: Yes, of course.

CL: Just kidding.

DA:  Share what you can.

CL: So what we’re working on is just we, as a commercial real estate industry, have gone in our own way to some respect. So what we are working on is humanizing the real estate story and doing it in a way that customizes a message, but delivers real time and predictive data and data analytics, simple as that. So really what our core focuses on is just simply making the market more transparent because the way most would interpret markets, they’ll say, well, the vacancy here, or the availability rate is X, Y, and Z. Here’s where it was a year ago, but what’s lost in the equation is what does it mean for me? What’s your interpretation of it on my behalf as a trusted advisor, and how do we bring in all these other elements into the equation, kind of what we were discussing earlier in a way that makes sense to me ultimately, and for every hyper-sophisticated client we have, we have just as many clients, if not more, who simply want us to distill the message into a way that’s more humanized. And what we’re delivering is exactly that, opportunities to refine some things like site selection, to make it more simple, more dynamic and easier to interpret, because ultimately if we’re not doing that, unfortunately we’re not doing our job all that well. And, we don’t have to be the smartest people in the room, quote on quote, but we should be the most approachable. And we should be those who are trusted advisors.

DA: I love it. I’ll share with you just because I think it touches on some of what you just talked about. We’ve just launched something that we call space_bar, which is a form of community for people to come together in all aspects of the industry. So whether they be industry experts, working in the industry or just people that work in buildings, employers who want to come and talk about what a return to workplace looks like and make it very human, make it very much about our own personal experience, what we’re comfortable with, what we’re not comfortable with and not a prognostication as to what, are we going to be working three days or five days in three months or six months, but what are we thinking and feeling today? So real time thinking, from real people, just sort of collaborating on what that looks like, and then figuring out a way, and maybe this is where I’ll reconnect with you and tap into some of your thinking, you know, how do we then sort of analyze that, compile that, and share that, but really just trying to create that sort of space where people can immediately sort of talk about what their experience is today. So what was it like going to work today? Or what was it like working from home today? And then how does that information, that insight become valuable to your point to your clients, to decision makers that are trying to figure out what their space needs are? Where they want to locate? What size footprint they need? And so forth.

CL: Yeah, exactly.

DA: We’ll talk more about that. Our closing speed round, just to gain a little more insight into Craig himself. If you could have one superpower, what would it be?

CL: No sleeping, being able to operate without sleeping.

DA: Wow. That is the first time I’ve heard that one. Interesting. What city or country would you like to travel to first when you can and why?

CL: Oh, I love to go back to Japan. I’ve been there twice. Just a fascinating and phenomenal culture. I was supposed to go to Spain in April of last year, of course, that did not happen. So it’d be one of the-

DA: Spain is on one of my, definitely high up on my hit list for sure. The food, the wine can’t wait. Well, what do you do when you’re not working? Now? You just said, you actually, your super power, you’d like to be that you don’t even need to sleep, but I hope it’s not just so you can work more. So when you’re not working, what are you up to?

CL: Go out of my way, see family, friends, do it again to, pop in the Peloton, not to be a plug for Peloton by any means, but certainly to exercise and things of that nature, just the little things just to bring up like more, little bit more balanced when I’m not working of course, which of course, is a work if you’re truly passionate about what you do,

DA: Hundred percent. Fair enough. What’s the number one thing that you have missed about the workplace. Now you have said you’ve been back a fair bit, but not all have. So what’s the one thing that you’ve missed?

CL: I think it’s really the presentation and setting, being up on a and talking to more than a handful of people at a time specifically, not just our fellow colleagues, but our clients as well. I think that’s an opportunity that I sorely miss.

DA: Right? Totally get that. Your favorite recent TV streaming, movie or series, we’ve all done a lot more TV viewing, anything that you’ve loved over the last number of months?

CL: “The Boys”. Wow. If you like unpredictable shows that are outrageous? That’s at the top of the list. That’s an NC 17 type show. So it’s not for everyone. And I’m not a superhero fan by any means, but, wow, what a wild show. So when I got into it super late to the game, but finally dove in and I dove in head first.

DA: Awesome. Listen, Craig. Thank you so much. I’m really glad you were able to come on the show today, share some of your thinking, your passion for commercial real estate. I’d love to be able to re-connect and continue the conversation. We’re thinking a lot about data and research and helping our clients make better decisions. Using some of the information that we gather through our tenants experience platform. Again, just bringing it to market space_bar would love to talk more about that. And I plan to be in New York very soon and look forward to meeting in person and finding opportunities to do business together. So thank you so much again, and I wish you well.

CL: You as well. Thanks. Thanks so much for having me.

DA: I want to thank Craig Leibowitz for joining me on today’s episode of TEN, and for sharing his journey from early beginnings as a research analyst to now leading his team at Avison Young. Great learning for all our listeners and an opportunity to gain insights into what it takes to become an innovation leader. Please be sure to follow 10 for future discussions with leading professionals and industry experts who all have something to say about the impact of technology on tenant experience in the built world. We love hearing from you. So if you enjoyed this episode of 10, please share, add your rating and review us through your preferred podcast provider. If you or someone you know, would like to be a guest on a future episode, please reach out to me directly at david@hiloapp.com. And until our next episode, I wish you all continued success in building community where you work and live. Thank you.

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