KP: So I have a little bit of a meandering point to get here, as most people do in real estate, honestly. So I’m currently the CEO at Grace Hill, and after graduating college I moved to Dallas and took a financial analyst role with a commercial real estate company out of California. So I started analyzing how much we spent on paint and all those sorts of things, and then moved into some operations roles. And then my boss at that time moved over into the multi-family side of real estate and he hired me over there. And so then I worked there in the multi-family side for a bit and then with several companies and several different positions, corporate and property, the management side. And then 2000 started my own company, circled around policy procedure manuals content for the real estate industry, and then in 2018, Grace Hill bought that company. So I joined Grace Hill at that time and took overall the customer-facing roles within Grace Hill, except sales. And then through another investment of ours in 2021, was appointed CEO at that time. So there’s my journey.

DA: Well, congratulations. And more often than not, it is a meandering journey that I hear and often some very interesting twists and turns and how people ultimately end up in commercial real estate. So just curious before we move on, you were in the industry but decided to go out on your own, and what was the impetus to sort of creating your own company and ultimately what you did within that company?

KP: Yeah, it’s a dilemma that parents have to struggle with in jobs, in parenting, and that sort of thing. And so I had always thought I would go on my own at some point and felt like kind of 2000 all the stars aligned. So we had a family business where my father was running it and was ill and needed some help, and I had just had my second baby. And so kind of felt like it was a good time, both professionally and personally because I felt like I finally had enough street cred that I could really do that. And then also just from a family perspective needed to sort of drop into our family business and help my dad and then I had a new baby.

DA: Wow!

KP: It all kind of aligned. And it was interesting, you know, I got… Through that process, it started a consulting company and one of my customers called and said, “Hey, I know you have written policy procedure manuals in your past. I’m starting a new company and I need this. Can you help me? And I’ve got a bid for X amount of dollars. If you can do it less than that, you can have it.” And so I really give him credit for kind of giving me the push because it’s a skill I knew I had, he was giving me the price. And so I walked in and I said, here’s what I’m thinking. Let’s do this a little bit different, differently than we’ve done in the real estate world in the past. And so we started with a kind of one-page policy idea ’cause I was like, people, you know, the world’s changing. People don’t want to read pages of pages of policy manuals anymore. It’s really about brief information and short content. And then shortly thereafter we went online. And so we put everything online. And I remember sitting at a trade show explaining to somebody what online meant and why you would want it online as opposed to a Word document. And so I’m dating myself a bit, but it wasn’t that long ago. And so that was really kind of our evolution of taking it to a different place than just sort of this three-inch binder that had all this reasons, but people don’t consume information like that and they certainly can’t retain it.

DA: Right. Interesting. So given that that additional information now I’m just curious, why do you think you were so uniquely suited for this opportunity in terms of becoming an entrepreneur and building out this unique approach and then ultimately being acquired and now leading Grace Hill? What has helped you to be successful? Your skills, mentors, colleagues, books? What do you attribute your success to?

KP: I would say, first of all, I think I’m uniquely suited to be in this role because I have been a customer. I have lived in this space. I understand what the basic pains and challenges are. So I think that gives me some opportunity to think about things and/or to kind of say, no, that’s not really how customers think about it, or, this is a pain and nobody’s solving it, let’s go figure it out. I think that experience has helped me running a software company today, which is what basically we do in software and services, I didn’t grow up in software, I grew up in real estate.

DA: Right.

KP: And so now it’s applying some of these technology and services to the problems, which I love and super fun to do that every day. I would say my dad was a Montgomery Ward’s store manager for a long time. And I remember when they used not to be open on Sunday, we’d get to run in the store and eat popcorn out of the machine and some things like that. But I remember walking around when my dad, and that was sort of when the big box stores all existed and I was a kid. But I remember walking around and hearing people talk to us about how much they loved working for my dad and what a great leader he was and how he really championed them. And I think somewhere in there that really influenced me about if you can really get on the side of your people and really help them connect what they’re doing every day to the job that you need them to do or that the business needs them to do, that they will really be loyal and follow you and appreciate that. So I think that was a big influence. And then I would say, I used to work for a man in real estate and he had the unique ability to always making you feel smart. And so you’d go to him with an idea idea or you’d say, “Oh, here’s how I’m going to handle that.” And rather than saying, “No, that’s not a good idea,” or that sort of thing, he would question you into the right answer. So he would ask you all these, “Well, have you considered this? How are you going to handle that?” And so you had to really solve the problem with him, but through that process, you always felt like you were solving it. You were creating it with him as opposed to him saying, “No, that doesn’t make any sense. Let’s do it this way.” He questioned you into that. And I’ve reflected on that quite a bit about how that gave me so much confidence in my ability to solve a problem and talk through it. And then I would say for the books, I’ve read a bunch, but I’d say I always have some non-fiction book going. I’ve just now literally started “The Advantage,” so don’t ask me about it. I haven’t gotten not far enough into it, but just started that. I was sitting on a board in the real estate world and the CEO of that board suggested it. So I think it’s about company culture and things like that. So haven’t started too much into it, but that’s my next.

DA: Those were great examples and great stories. I loved hearing about your dad and then also hearing about the gentleman you worked for and sort of how he was able to help you to discover what you perhaps already knew. And I think that’s a great skill if you can bring that forward or play that forward. What a wonderful thing to do to be able to do with other young people, particularly.

KP: He used to have a rule that you could not leave him a voicemail longer than a minute. And if you left it longer than a minute, he said, “I’m not listening to it.” So it’s funny, it also made you be succinct in what you wanted to say. So I thought about that. I’ve told a couple of people that in the past.

DA: Right. We also share in common. I also did not come from a technology software background and now running and building a software technology company. So I can relate with you about what a different world that is, a different business that is. But I think you’ll probably agree probably one of the most exciting things I’ve ever done, I would imagine the same is true for you.

KP: Yeah. Well it’s just really get to marry the two things that are needed. You need to understand the pains of your customers and you need to understand the technology and services that can help solve that. So it’s really a fun intersection place to be for sure.

DA: Right. I’m really excited about the perspective you’re going to bring to some of our discussion points in and around the return to workplace. And you come at it from a very different angle, although embedded in commercial real estate, again, bringing a hope, a very unique perspective for our listeners. There’s so much commentary still today being expressed about the return to work and the role of buildings in the workplace. Some of that commentary is quite confrontational, often polarizing. We really believe that now is the time to simply live in the world as it is right now. And that the commercial real estate industry and employers can’t continue projecting to a date in the future when we will return to what was normal. It is likely that this is the new normal. And it’s not a normal without COVID, it’s a normal with COVID. So I’m just curious from not only just your experience in commercial real estate, but also from the perspective of the work that you do at Grace Hill, what do you think that means for the commercial real estate industry? How can buildings continue to be important to businesses and people today?

KP: It’s a great question and I’ve heard your podcast and your guests talk about this, and I think it is, obviously, an interesting point. I think you’re right. I think you’re exactly right. I think this is the new normal. I heard recently at BOMA they were projecting that, you know, oh, 70 something percent of companies are going to get back into the space. And at the time I thought, oh, that feels high into, but, you know, maybe, but that feels high. I think that this is the new normal, I think this hybrid work place is at least a new normal for the next bit of time that we can see. I think employees are expecting it and they are making job decisions based on it.

DA: Right.

KP: And therefore, it’s a different world that people can say, “No, you have to show up every day,” ’cause there are employees and people out there that are saying, “Well then I’m out. Then I can’t work for your company.” So I think companies have to be flexible or creative about how they can make this work. I’m seeing it in property management even where you used to always say, “Oh no, the on-site people have to be on-site.” And leasing has been done that way for a long time where it’s a broker and they don’t have to be on-site. But you’re even seeing it now with the operations folks and they’re even saying, “I don’t necessarily have to be there.” Maybe not. You have to be there at some point and sometimes, but not all the time. So I think we really, as a real estate world, have to really think creatively about that ’cause I agree with you. I think this is the new normal.

DA: So if we’re certainly seeing hybrid take root in the people that work in these workspaces, your comment is you’re also seeing it on the operations side now. So what has that mean for your company that is very focused on building performance? Has that changed the kinds of programs or services that you’re providing given that the way in which building operators now deliver that service is continuing to change?

KP: We have actually been remote for a really long time. So we do have a brick and mortar office and the people that used to come in there every day post COVID are now irritated that they have to come in at all. And so we have have moved them to a hybrid schedule where the rest of our teams are remote. So we have worked in that environment for quite some time. I think the interesting thing, what we’re seeing, like, you know, one of the services we offer is surveying our owners and the owners and customers that work that work with us use us as a service in surveying tenants and owners about building usage and what the tenants really want and residents want and that sort of thing. And the interesting thing is that 32% of, you know, we’re seeing 32% of the office tenants report that they are giving their employees the ability to attend optionally in person.

DA: Right.

KP: And then 36% say they’ve got, you know, they have mandatory partial. So you’ve got some people that are mandating it, some people that are saying it’s optional, but it’s interesting, almost 60% of the building owners and operators believe that office has a positive impact on the ability to hire and retain employees. So it’s a little bit of this mutually exclusive things that you’ll say. They were saying, “My office is helping me attract, but I’m not making them come in.” So I think that’s part of what we are doing, is supplying information so that these building owners and operators can make that decision for themselves and about that building, because that’s really going to impact it.

DA: I think the data can be confusing and I think that’s another reason why we do this podcast, is just to talk to people in the industry in real time to understand what is happening today. Like, what is your experience today because things are changing so fast? We had a young person apply for a position within our company and sadly we were not able to win the day they wanted. We currently are remote, we hope to come back to with some physical presence in the not too distant future, but she wanted to be present in a physical space, from the get go.

KP: Yeah.

DA: And not even on a hybrid basis. She was really looking to to be part of a community, connect with peers, to be mentored in person, to build relationships, to go out for drinks after work.

KP: Yeah.

DA: And I think that there’s such diversity within the workplace. I think if we’re smart, we will also take a deep breath and realize that it’s not one or the other. There isn’t one solution. What’s right for one person is not necessarily right for the other person. The same within a company, the same within departments within companies. And I think you, you spoke about it, I think flexibility, and giving people ownership to some of the decision-making is probably the smartest thing that we could be doing.

KP: Right. And that’s really challenging right now because it’s what do you measure? Do you measure results? Do you measure actions? What do you measure of the employee exactly for all this? And so I think that’s the other thing that our technology is kind of keeping, is trying to catch up to is, what exactly do you measure? Because we’ve never had to do that before. We could see them, we could see if they were working, we could see if they were shopping, We could see that or whatever. And now it’s a little bit of like, well, I don’t exactly know what’s happening every day or do I have some of that technology that if I they don’t use their mouse for 15 minutes, then I’m concerned, or a certain number of clicks. It really goes the gamut of what we’re seeing. And I think to your point, flexibility is really going to become. And it’s funny you said that. In the same week, we had an employee that we could, or a prospect that we ended up not hiring. Was like, said, “I want to be remote. I want to be 100% and I’m not even coming to any meetings.” So we were like, well, we can’t do that. And then we had another employee that quit because they were remote. We tried to do some in-person things too as well, but they were like, “I want to be 100% in-person. And I was like, this is such an interesting thing in the same week.

DA: Right. Yeah, no, I think that’s a great example, a real life example of just how diverse the way in which people are thinking and somehow we all have to figure out a way to move forward.

KP: Right. Right.

DA: I think we can all agree that in terms of an industry, the commercial real estate industry, that the pandemic certainly re-calibrated the market, or accelerated the recalibration of the market. I think this trend was already emerging, but I think we can really recognize that ultimately buildings are places for people. That the real asset is the people, not the building. And it is what goes on within those walls that really generates tremendous value. So as a result, we are seeing the tenant experience, workplace experience, workplace engagement are fast becoming the new differentiators and helping to drive real estate decisions, perhaps more so than those historical determinants such as location and class. So just wondering from your perspective, from the work that you do, from what you’re seeing in the industry, how do you think we’re going to go about continuously creating and defining the best customer experience? What does that mean at a property level? How do we ensure that every building has an equal chance of competing to retain their tenants and attract new ones in this new world?

KP: Right. I think the overall arching concept we have to remember is that people are people, and there is a need for some collaboration. And there is is a need for some of this casual conversation and casual collaboration that does happen when you see each other. And I think to your point, driving it down to the buildings. So what services does the building offer? What amenities, you know, what do people want? And we, again, as I mentioned, we do surveys of tenants and buildings and it’s interesting. We had a customer that was about to put a bunch of money into the lobby and they surveyed all the tenants and they said, “Aren’t you going to think this lobby’s amazing?” And the feedback came back and said, “No, we really want better outdoor seating, we want some outdoor spaces and we want pickleball.” And so it’s interesting. So they completely… I think they did a little bit of money to the lobby, but they ended up, including this big green space to, because people are like, “Well if I’m going to be there, then I want the ability to walk around. I want the ability to be outside. I want the ability to move and use the building in a little bit different way than I’ve always used it.” So I think that’s exactly what, yeah, that-

DA: And that’s not surprising. Pre-pandemic, we started to see commercial estate operators recognize the value and potential of lobbies and the under utilization of lobbies. And they were reinventing them and doing some amazing things. But interesting to note that the data, your current data says, okay, awesome, thanks, but we’d rather have outdoor things.

KP: Yeah, exactly.

DA: Right.

KP: Yeah. Well, and I think when we all went home, we all realized it’s nice to be outside and because that was one of the few places and so like, huh, I can take a call outside and still be productive or still breathe some fresh air. And I think that’s the other interesting thing, is the whole GRESB and ESG and energy thoughts. I think that’s the other thing that I think employees are going to start demanding is what are you doing about this big footprint? The building already exists. So okay, fine, but how can you make this more environmentally pleasing? Can you do solar? Can you lessen the footprint? ‘Cause if I’m going to go in, I want to feel better about it.

DA: I just came back from New York City last week, I attended the CREtech Conference there, the Commercial Estate Property Technology sponsored by Michael Beckerman’s company, CREtech. Phenomenal event, over 2000 people in attendance. And obviously a major theme and a major initiative of Michael Beckerman is all around ESG and the environment and buildings reducing their carbon footprint and so forth. And a lot of discussion amongst building operators around how the work that they’re doing to adhere to some of these new guidelines and recognizing that tenants are now demanding it. And tenants are actually prepared to pay the premium.

KP: Yeah.

DA: For buildings that are taking these initiatives to heart and are making change because it aligns with their own corporate philosophies. So I think you’re right. I think from helping to define customer experience, I think ESG and the environment and reducing carbon footprint, these are all factors that perhaps very intangible pre-pandemic are now top of mind today.

KP: Absolutely. I mean, yeah, you were in a building 20 years ago. Who even thought about how the water worked?

DA: Right.

KP: I wanted the power to come off and on, but now people are asking that around everything. They don’t want to buy clothing from a company that doesn’t handle the disposition of the fabric well or the dyes or whatever. So it’s kind of getting to be the same. This is really permeating all areas of our lives and so I think it’s something we have to think about.

DA: Well, and a big opportunity for commercial real estate, given that it is and will remain the largest asset class in the world. So just imagine the incremental positive steps that it takes.

KP: That’s right.

DA: The impact that that will have on our world. So it’s very exciting to hear and see the kinds of conversations that are happening.

KP: Right. Exactly.

DA: Let’s take a short break and we will be right back.

KP: Okay.

COMMERCIAL BREAK

DA: We are back with Kendall Pretzer, CEO at Grace Hill. Again, I’m really glad you could be with us today.

KP: Thank you for having me.

DA: So, listen, living through a pandemic has been challenging for so many people, but it’s also provided an opportunity now for many to do better, be better, and build something better. I just want to give you an opportunity to share any details about your business or some part of your business that is being re-imagined to reflect the reality of where we are today.

KP: Yeah, I think this will be one that we’ll look back and tell our grandkids about, right? So I think Grace Hill is a content and data provider. This is what we do. We do training content, policy content. We do ministry shoppings, all to give our customers, equip our customers with more information and then data around what the residents and tenants are thinking about and want to. So I think when the pandemic happened, all of a sudden we realized we were in a place that our customers expected us to help them mine content. All of a sudden things were coming from all kinds of different places, all things were happening. And so we realized that we were in a place to distribute a lot of information in already channels that have been set up. So that was really a unique break for us that was, you know, we were already doing all that, but like, wow, we are set up to do this and we can really help. And so through the pandemic, that’s really the role we took, was can we provide content to really help owners and operators figure out what to do and know what to do and communicate information and talk to residents and tenants about this and then equip their own people, And because you had people out there that were having to go clean office spaces and clean bathrooms and clean apartments and that sort of thing, and nobody knew exactly what that meant. And so we were really in that place and that was really part of our goal. So that was one thing that we really feel like we served the market in doing. I’d say internally for Grace Hill, two things have sort of emerged as well, just as our own company. Number one, we realized that even as a remote company, I think we realized that we needed to make some more intentional effort to connect. And so we’ve done some more in-person town halls and we’ve done more often all hands calls just to help us all connect, even though we are mostly remote and have been. But it was just a more as like, huh, a little aha moment for us in that. And then the other thing thing we really-

DA: Were you remote before the pandemic?

KP: We were, well, a lot of our company. We have this one brick and mortar area where most of our… We have some employees in Greenville, South Carolina, which is the headquarters and we had people there. We had 60 people there before the pandemic. Now we have 30. And the rest of the almost 200 employees are scattered throughout the country. So we always were mostly remote, but yeah, this really took… And I think we took some of that for advantage. Not Advantage, but we just didn’t realize how connected, ’cause we saw each other at all these events. And so now we were like, we need to be a bit more intentional. I think the other thing is a little bit of our focus. We’ve moved to creating what we call Impact Hero Awards, where we really wanted to focus on people, customers that were really helping the community. And so this year we have rolled that out and selected three finalists, and the winner to be announced later this week. But really they were selected because they were in turn doing something to impact their community. And so we wanted to highlight that, recognize it, because I think that was the other thing that you realized throughout this is it’s really about helping people.

DA: Right.

KP: All throughout our community. And so we wanted to set up an award program for that to recognize that.

DA: That’s wonderful. And I’m sure you had great engagement amongst your team to participate.

KP: I did.

DA: Yeah.

KP: Yeah, I did.

DA: Amazing. Well, thanks for sharing that. Our closing speed round is an opportunity to get to, to know you, Kendall, a little bit better on a personal level. So a few questions to ask you.

KP: All right.

DA: Can you share one way in which the pandemic has changed your outlook on life?

KP: Yeah, in addition to the pandemic, I was diagnosed with breast cancer during the pandemic, So for me-

DA: Oh, wow.

KP: Yeah, it really was about health in lots of different ways. I think life throws us lots of curves and our job is to deal with them as effectively as we can. life is meant to be lived. We don’t control it, we just stand in the power of it. And so that’s really for me. It’s really about thinking about your health and taking care of that, because it’s meant to be lived, not to be cautious.

DA: Right. And I hope you’re doing well and just so you know.

KP: I’m doing great.

DA: That’s awesome. I’m really pleased to hear that. And we’ve all been touched by cancer as have I. And I do my part. I ride in The Ride to Conquer Cancer every year from Toronto to Niagara Falls over the course of a weekend and raised a lot of money in addition to all the riders, some 5,000 plus riders. This past June we raised $17 million.

KP: Wow that’s great.

DA: For the Princess Margaret Cancer Foundation. And so definitely a passion of mine as well.

KP: Yeah.

DA: I wish your continued health.

KP: Thank you, appreciate it.

DA: My pleasure. What travel destination do you miss most?

KP: I would say London. I have not been to the UK since the pandemic and I love London. And so just haven’t really had opportunity, haven’t had reason and so miss that. But I do have a trip plan of going to Hawaii for my 34th wedding anniversary.

DA: Oh, congratulations. 

KP: And then I’m going to go to France for the French Open. I’m a tennis player too, so I’m going to. I’ve never been to the French open and so I’m going to go this year.

DA: Oh, I love it. Well, Hawaii is definitely on my vacation bucket list. I haven’t been there yet.

KP: Oh, nice.

DA: And French Open would be just an awesome experience for sure.

KP: That makes sense, I don’t speak French that’s why I got to… maybe that’s my bucket thing I need to do, is learn French or at least to get around.

DA: Yeah, you got to get one of those, those apps and training.

KP: Exactly.

DA: What’s your favorite technology that is new to your life?

KP: I would say some of these smart home things. I’m redoing my blinds in my home and I found these ones that you can operate from your phone.

DA: Yes.

KP: That they can go up and down and all kinds of things. And that’s awesome because that’s just having to walk around each window and open and close things. This is like, I can do it with my phone. I’m fascinated by that. And of course the whole Ring Doorbell and you can see exactly who’s there. those smart home things are.

DA: Yep, smart home automation. That’s a hot one, and now, obviously, smart buildings. A lot of that same technology is making down to the commercial space as well.

KP: Exactly.

DA: What is your personal choice for days spent in person with your colleagues versus working from anywhere? Now, given that you seem to be a remote first company, that answer might be obvious, but I’m just curious.

KP: Well, I’m going to answer it, but I’m going to be consistent. I love hybrid. During COVID, I was in a room at a desk for seven weeks straight, I think, and finally I went to my husband. I was like, we have to get out of here because I’m going to kill somebody and you’re the closest one to me. I think I love to spend days with my colleagues and we do that. We try to get together in person because that’s, again, where some of that casual collaboration happens. I wouldn’t necessarily email or Zoom somebody, but if they’re sitting there I would say, oh, hey, did you know? So we get together, we try to get together at least once a month. So I do that and then I love to work remotely, somewhere with a great view.

DA: Right. It makes sense.

KP: Yes.

DA:  And we certainly have lots of options. Kendall, thank you so much for joining us today and for sharing your experience, your perspective, your personal stories. I’ve enjoyed getting to know you. Look forward to continuing our conversation in the future and staying in touch.

KP: Thank you, thank you for having me and congratulations on your success as well. So appreciate being included here.

DA: My pleasure, take care now.

KP: Thank you.

DA: Bye.

DA:  I want to thank Kendall Pretzer for joining me on this episode of TEN and for contributing to the global conversation around buildings being part of a robust ecosystem, helping to build great companies, and that they’re vital and the effort to cultivate and support great people and teams. The future of the workplace will likely take many forms. We will continue to explore what that looks like together. Subscribe to TEN for more conversations with leading CRE industry professionals and experts who all have something to say about tenant experience and the future of the workplace. We love hearing from you. So if you enjoyed this episode of TEN, 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.