ME: Well, thank you.

DA: Tell us about your current journey to your current position role, how did you get started?

ME: Well, I did have an interesting journey over the last 30 years or so. My wife and I came to Toronto in 1979. Neither of us grew up here or had any kind of exposure to the city. And in retrospect, that was really fortuitous, because the city was about to change dramatically, then, I didn’t realize it then, but I certainly experienced it subsequently. I came here to go to Law school, I was trained as a lawyer. I practiced law for about four years with a firm called Aird & Berlis. It was a great window on the world and I always wanted to get into business. I was fortunate as a lawyer to do a lot of work for real estate organizations raising capital. And through that experience got a little bit of insight into how real estate worked, although I would have to emphasize a little bit. In any event, in 1988, started a very small private entity, and what we did in retrospect was not unwise, we acquired small well-located storefront retail assets in the city of Toronto, Yonge and St. Clair, Yonge and Eglinton, Yonge and Front. And our thinking at the time was sound, it was, these assets will hold up in good times and in bad. And we were right in that regard. What we didn’t realize in 1988/89, was that the market was about to crash, and it did just that in 1989. And it’s really then that we began to learn the real estate business in a real sense, and it was a brutal education, but it was a very good education. One of the most interesting experiences we had, revolved around two buildings at Yonge and Front, not only did they involve storefront retail space, but there were about four stories of office space in each of those buildings. And it was very distinctive office space because it was created through the adapt of reuse of structure built about 100 years ago for light industrial purposes.

DA: Right.

ME: What was so formative about that experience for us in the first half of the 1990s, was that office space held up better than the towers in the core. We were able to keep it full and we were able to generate respectable levels of net rent, while the towers went to about 25, 30% vacancy and had real difficulty for years generating even zero net rent.

DA: Right.

ME: And so we asked ourselves, how is this possible? Why is this happening? It doesn’t make sense. And we realized it did actually make sense, we had a bit of an advantage that we didn’t understand fully at the beginning. We were close to the core, the buildings had very distinctive internal and external attributes, which attracted really high caliber tenants and the taxes and operating costs were $8.50 cents a foot. So we could lease out to people at $20, all in, get to keep close to $12 a foot as net rent, the towers were essentially leasing out at $20 a foot, and losing anywhere from $2.50 to $5 a foot, negative net as it used to be called. So it was a combination of proximity to the core, distinctive internal and external attributes and lower overall occupancy costs that allowed us to outperform the towers, so that was an interesting and informative experience. Through the first half of the 90s, we really learned how to run real estate. We were inspired amateurs at best, at the beginning of the crash. By the mid 90s, we knew what we were doing. We hadn’t made much money, but we knew what we were doing, and we understood how real estate worked in the most difficult circumstances, and we were pretty confident that we could run it well as the markets recovered. And then something transformational occurred in the City of Toronto, Barbara Hall’s administration, as you probably know, looked west of University Avenue and east of Yonge, saw this enormous inventory of older structure that was restricted then to light industrial use. The problem with that is that industry had abandoned those structures for good reasons long ago, so the areas were in decline. What the city did was brilliant, and one of the most transformative things that a municipal government has done in my experience. They said, Look, you can put the buildings and the land, west of University, pretty much all the way over to Bathurst between Queen and Front, and you can put the buildings and the land, east of Yonge, all the way over to Parliament between Queen and Front to any socially acceptable use. Comply with the building code, people can live there, they can have offices there, they can have retail space there and the land around it, same thing. Limited initial restrictions on density, you guys in the private sector, figure it out

DA: Right.

ME: Which was unbelievable.

DA: Right.

ME: And the market was very quick to move. The first thing I remember happening is that some residential developers converted some of the older buildings to loft condominiums, and that made for beautiful product, but the cost of conversion was really high. So what most of the residential developers soon realized is that it was much more profitable to build from the ground up on the land, in those areas, the King-Parliament Redevelopment Area, as it was called and the King-Spadina Redevelopment Area. And the condo boom we’ve been living through ever since is really the product of that change. We came along, having had the experience I mentioned in the early 90s and recognized the opportunity to convert the buildings to office use above grade and retail at grade.

DA: Right.

ME: And we started in ’96, we accelerated in ’98. And by the year 2000, we couldn’t create space fast enough to meet the demand. And again, it was that threefold value proposition, proximity to the core, distinctive internal and external attributes and lower overall occupancy costs. We were fortunate in ’98 to acquire a large portfolio from a gentleman named Sam Sable, who was a legend for years in the Toronto real estate community. And he sold us essentially a million square feet about 18 buildings. And most of them were concentrated in the King-Spadina area, although there were some very fine buildings in downtown east, which are still part of our business today as well. And as I say, we acquired these, we completely replaced the infrastructure in the buildings. We kept the ground floors available for retail, which is how we created neighborhoods, and we were almost able to merchandise a whole neighborhood, and then made the office space available. And as I say, the demand on the part of knowledge-based organizations was intense. And so we were creating millions of square feet of office space without cranes, without new construction. And so it finally was recognized as sort of invisible cranes and it represented the evolution of office space to something that is more focused on the needs and aspirations of human users. And that was what was so wonderful about the experience we got. We then went public and we’ve been consolidating distinctive urban office space ever since. But the real foundation for what we did occurred in the second half of the 1990s and the early part of the last decade, where we took a more humanistic approach to the provision of workspace and it resonated with an ever wider spectrum of knowledge-based organization. So that’s kind of how I ended up here. I feel blessed really to have been in Toronto during that very formative period of time, and to have been able to contribute in this way. When all is said and done, I’m what Ed Sonshine, my friend often refers to as a broken down old lawyer, but somehow Ed, who saw something very different, I saw something changing in the office market, and was able to contribute to it and participate in it with a progressively, if you will, larger group of partners.

DA: Right, I love it. That’s a great story. And I love your, you touched on the humanistic aspect and we’ll talk more about that because you were definitely ahead of your time on that front, but we’ll get to that. So you gave a great sort of, and maybe you already answered part of this question, but why do you think you, Michael, were so uniquely suited to this opportunity? What aspect of you, was able to see through all of the clutter at the time and see this opportunity for what it was, skills, mentors, colleagues, like, what do you attribute your success to?

ME: It’s a good question. It’s actually a question I’ve asked myself because it’s interesting to try to understand what has worked and what has enabled me to do whatever I’ve done. I mean, my wife is amazed that I can even tie my shoes. So, I’ve got to spend a little time thinking and wondering what allowed me to do what I was able to do. I think one thing, seriously, was that I grew up in small towns and there are aspects of growing up or living in small towns that are really wonderful, but there are also elements of city life, big city life, I guess I would call it that are simply impossible to create in a smaller community.

DA: Right.

ME: So I always wanted to live in a major city. I was introduced to Montreal first as an early teen, loved it, came here to go to law school, loved Toronto, right from the outset. So I think part of it was a conscious appreciation of the diversity and the richness, and when I say richness, I don’t mean just economic richness, but cultural richness, social richness of living in a large city. That certainly helped. I think, secondly, I am humanistically oriented. I see people, they’re not abstract for me. They’re real. They matter. I don’t like them all, necessarily, but I see them all as real. And I think I have the ability to empathize with people and kind of understand how people want to be treated, how they want to be inspired, how they want to be seen and enabled. And I think that helped. And I think, to be fair, my timing was fortuitous. I might be a good example of the right person in the right place at the right time. But I do think, a somewhat natural orientation towards humanistic

DA: Right.

ME: Approach to life was helpful to me, for sure. And I have the ability to see space and I do have, I mean, you’d never know by the way I dress, but I do have a sense of design that I think is somewhat highly developed. So I think all those things kind of helped and then just enthusiasm. I was born with it, I’ll die with it. And it’s a great, great, great attribute, which I value immensely.

DA: I love it, a lot of great learning for our listeners. So thank you for sharing and sharing such personal thoughts as well. There’s been a lot of commentary around the return to the workplace and some very extreme opinions being expressed, somewhat confrontational, perhaps polarizing. My team, we really believe strongly that everyone needs to live and work in the world as it is right now. And the commercial real estate industry and employers can’t continue projecting into the future, you know, when that return to work date might be. Perhaps living in a world with COVID just like it is today is the new normal, and we have to live in this world as it is. So I’m just curious, what do you think that means for the commercial real estate industry?

ME: Yeah, it’s a great question. And it’s one that we’ve been grappling with and asked to grapple with by our investors and our other constituents for nearly two years now. I sense in the last few weeks that everyone in the world, I occupy and share with others has basically forgotten about COVID. And I don’t mean that superficially or cavalierly. I think we’ve all recognized, okay, this has run its course. In a manner of speaking, it hasn’t disappeared, it probably won’t disappear. But our ability to manage the threat that this represents to us as human beings is quite high. And we as human beings need to get on with our lives because if we’re deprived for too long of diversity, of social richness, of entertainment, of interaction of a meaningful personal nature, we will suffer. Our competitiveness will suffer. Our humanity will suffer. Our societies will decline. Our children will be diminished. And so I sense, everybody’s sort of almost got there. Omicron was the last leg. It was not inconsequential. It was the one phase where a lot of people in my world were impacted. It’s like up to that point in time, very few people in our organization or with whom I have direct contact were impacted by COVID. I mean, well I shouldn’t say, they were very definitely impacted, were infected by Covid, that’s probably the more accurate way to express it, but Omicron, it’s rifled through families. Fortunately, in the most instances it hasn’t harmed anyone meaningfully at all

DA: Right.

ME: Again, I’m talking about my world. It has harmed some human beings and has to be respected accordingly. But I think we recognize we’ve got to get back. The banks have recently started to establish deadlines for return. I think CIBC announced it’s recently, BMO got going in early February. Bank of Nova Scotia has been quietly, quite progressive in returning people to work. I think the HR professionals were understandably worried about bringing people back and they were worried that people might, in a way leave or abandon that employer if they were forced to come back. I can understand that and respect it to a point. But I think as a nation, Canada has never been super competitive. If I look at the return in the United States, a more competitive country than Canada is, we can’t afford to lag too much. I know in our business at Allied because we’re a physical reality, certainly technology is important to us, but we are a fundamental physical reality, we’ve been back in the office since July of 2020. And I know it gave us an advantage opposite our competitors across the country who were still working from home. We’re no smarter than they are, but we were on the ground, we could meet with people, we could show space to people, we could interact with people. And that gave us an advantage that we wouldn’t normally have had. So I think it boils down to both economic competitiveness and, if you will, our humanity. We cannot live in isolation from one another. Some of us are more insular than others, that’s perfectly fine. But as a large group of people, we can’t live in isolation from one another and prosper and grow and evolve by the way we can if we live together. So I think we’re there. I think Canada has done a lot of things right. And I really mean, it’s easy to criticize the politicians after the fact, but I think in many respects they have done things well. I think business did a great job of leaving the office when it was necessary,

DA: Right.

ME: And when the interests of the community were such that that was the right thing to do. I think business has done a poor job generally, of returning and getting back to a real environment. And a lot of small businesses and a lot of human beings have suffered, because of that. It’s great if you can sit at home and work and earn a paycheck, and there’s nothing wrong with doing that, but there are many, many people in the economy who must function on site and who were prevented from doing that because people stayed home too long. So that’s kind of my view. I’m rambling a bit. It’s an important issue, it is a polarizing issue. I’ve noticed with the passage of time, there’s less polarization and more consensus. There’s still not full consensus, I’m not suggesting that, but there’s more consensus today than there was, I don’t know, six months ago. I made a comment about banks six or eight months ago. I got much more heat for that then,

DA: Right, right.

ME: Than I did for comparable comments today. Now I was a little bit flippant then, so I deserved a little bit of pushback, I think for the way I said it, not for what I said, but now I notice, there’s a great deal more consensus among business people, among members of the community, and that’s encouraging.

DA: Right. I’m going to express a sentiment that I actually first heard you say at an event, a Bisnow event, pre-pandemic. And it was the notion of being in the business of attracting and retaining the best talent. And I heard that from you and now this is something that I think you can take some satisfaction in, in that others are now understanding the role of real estate commercial estate now as well. And so my question is, how can buildings help employers to attract and retain the best talent,

ME: Yeah.

DA: Because of the opportunities to come together in buildings, the opportunity that buildings create to collaborate, inspire, build culture, and build great companies. I think the workplace, the office is part of an ecosystem now, but what can buildings do to help their occupants?

ME: You know, it’s a great question. And I think it is the foundation of the way workspace has been evolving for some time now. So what we have found, for example, and this comes right out of our experience in the second half of the 90s and subsequent to that, if buildings are located in mixed use, amenity rich, urban neighborhoods, they’re more appealing to the human beings that use the buildings.

DA: Right.

ME: You then think of yourself, I’m not part of the building, I’m not just in a building, I’m not just a tenant. I’m part of a bigger, social, economic, cultural ecosystem. All around me are a complex of amenities that make my life better. They’re not all in the building. They can’t be, no building is big enough for that. But if I take the neighbourhood, let’s call it downtown west in Toronto, the St. Lawrence market on the east side Mile End in Montreal, Gastown in Vancouver, the Beltline in Calgary, all of these actually create opportunities for people to work in mixed use, amenity rich neighborhoods. And that enriches their experience immensely. So buildings that are situated within those neighborhoods and actually see themselves as part of that neighborhood, not just an isolated entity, will do better, will serve people better. The other thing we have found over the years, I mean, air quality is very important in a building environment. Natural light is very important in a building environment. Open planning is very important in a building environment. So I think the people we serve, our tenants, we tend to refer to them as users, which is a less futile kind of description. They actually see their space generally as a means of attracting, retaining and motivating their most valuable resource. There was a Montreal tech leader who recently said something like, we’re trying to make our office more appealing to our employees than their home.

DA: Right.

ME: We want them to feel better here. We want them to have more opportunity within the walls and within the broader community to engage with the world the way they want to, and in a way that makes them feel better and more productive. So there’s no doubt in my mind, that space is one of the elements that enlightened organizations need to use to attract talent. And you even see it in the banks. And I don’t say “even the banks” to be dismissive or contemptuous in any way, but they’re massive organizations, but they have come to the recognition, that space is one of the ways they can compete for the talent they need to run their massive complex, and very interesting businesses. So CIBC Square, for example,

DA: Right.

ME: Is a clear recognition on the part of the leadership, CIBC, that space matters, and that it will help them be a better company. It’s not the only thing by any means, and nobody’s indifferent to costs, ever, but it’s a small cost actually, compared to turnover, which is a massive cost or compared to absenteeism or compared to disengagement. So I think the business community at large, recognizes this, there are organizations globally, like Google who have taken it to a whole new level and have enjoyed great success, in part, as a result of taking this to a whole new level. And there’s countless others more quietly, less dramatically doing the same thing.

DA: Right. You know, I think pre-pandemic for the most part, commercial real estate operators saw the asset that they held, being the building. And I think that the pandemic has helped to accelerate sort of the recalibration of the market, recognizing that ultimately, buildings are places for people, like the people are the asset, right, and certainly buildings with low occupancy levels, not very inspiring, doesn’t feel very good about what it is you have. So we think that, knowing that it’s all about people and you talked about you define your tenants as users, I love that, or customers, tenant experience, workplace experience is fast becoming the new differentiator, helping to drive real estate decisions. So it used to be all about location and class. I think the kinds of buildings that you’ve helped create have certainly changed that dynamic. And I think you’ve very much understood the whole notion of experience, but if truly experience is becoming that differentiator, how can we look to the future? How do you think we will define and deliver tenant experience, now and in the future?

ME: You know, it’s a great question. And it is the question. We recognize that we are an operating reality. We’re not an acquisition firm, although we do acquire stuff. We’re not a development firm, although we do develop stuff. But we do those things to make ourselves a better provider of a distinctive urban workspace. So operations is the key. Looking forward, I think experience is going to derive from a more meaningful level of engagement between the owner and the user. And I’m going to give you a great example that I can take, in a way almost no credit for, at least directly, but maybe some credit, indirectly. ESG is becoming a very, well, I think it has been for some time, but it’s becoming an extremely important part of the real estate industry. A subset of the ‘S’ is, in my mind is referred to as an acronym, EDI, Equity, Diversity, and Inclusion. And it’s something that’s very important to Allied as is ESG. And we had an experience in February, during Black History month, that was really eye-opening in terms of user experience. We had a webinar on black history and we organized it so that our entire organization across the country could participate. But here was the brilliant idea on the part of our operations team. We invited our tenants or users across the country to participate as well. And the participation level was huge.

DA: Wow.

ME: It dwarfed our attempt, I mean, we’re 350 employees, I think, across the country. And we had vastly more people who are employed by the users of our buildings participate in this webinar. And then the feedback from it was huge. And so there was a way that we engaged in a meaningful way with our users and it made a difference.

DA: That’s fantastic.

ME: Great illustration, and as I say, I was so thrilled with the instincts of our operating people to invite our youth. So we’re obviously now going to reach out much more systematically, much more because it has value and it has brand value for Allied, but it has deep human value for the people who were part of the webinar. And the person we had speaking primarily during the webinar was brilliant. I mean, he was just outstanding. So this is a way of enriching the experience of all the people who use Allied buildings and it’s where it’s at, going forward. We all have to get in front of it and embrace it. We’ll probably make mistakes and have initiatives that just go flat, but you can’t, it’s got to be human, it’s got to be meaningful. It’s not like discount cards for restaurant. I mean, that’s fine, but that’s not going to resonate with anybody. No one will hate it or anything but that isn’t going to resonate. It’s got to be something more meaningful and richer.

DA: I love that. I mean, you talked earlier about buildings are not silos and they are part of the fabric of a neighborhood and creating community. But through that process, you actually created a national community of people connected to your business and your brand. I love it, that’s a great story and really very inspiring. And as you said, tons of learning for you as to what you can now potentially try in the future, so,

ME: Yeah.

DA: Brilliant, brilliant. Let’s take a short break and we’ll be right back.

Commercial Break 

DA: We’re back with Michael Emory, President and Chief Executive Officer at Allied. So living through a pandemic, as we’ve both acknowledged has certainly been challenging and challenging for many, but it’s also provided an opportunity from our perspective to be better, do better and build something better. So can you share any details about your business, something new, something exciting, some part of your business that you’re reimagining, perhaps, just to share with our listeners, I think that’d be wonderful if you’re able to.

ME: I think I can. And I alluded to it a little bit, a moment ago. One of the things I’ve always been conscious of is that we are first, foremost and above all, an operating business, an operateur, if you will. But as we went through the pandemic, that became more apparent to me, more consciously apparent to me than ever before. I realized we weren’t going to acquire our way through the pandemic. That was almost irrelevant. We weren’t going to develop our way through the pandemic, although we had significant development responsibilities. The only way through the pandemic was to operate effectively through it. And that began to force us to rethink how we actually operate internally. So we have, in many respects, reconstituted our entire team around the notion that we are all part of operations. We’re not independently part of acquisitions. We’re not independently part of asset management. We’re not independently part of accounting. We’re actually all contributing expertise to operations, the provision of space and experience to the users. And that’s how we have to think about ourselves. And in fact, with a view to liberating capability that exists within the organization, we invited everybody to think beyond their own discipline, beyond their own specific departmental affiliation. Just because you’re an accountant doesn’t mean you can’t contribute to tenant experience. Just because you’re an asset manager doesn’t mean you can’t contribute to acquisitions or whatever. So this has been really significant for us, and we’re in the process of changing the framework of the organization. We actually disbanded the asset management department because independently it made no sense, it was isolated academic reality, and that’s not what we need, we need people who help us operate better, so asset management is more dispersed throughout the organization. Similarly, with acquisitions, we used to have this so-called acquisition department, we kind of disbanded it and basically said, we all need to think about and contribute to acquisitions and local team members. If we’re looking at a property in Vancouver, for us to sit here in Toronto and magically figure everything out is almost ridiculous. We need to get the people in Vancouver involved. So, in a way we’ve broken down the silos in an effort to see ourselves differently and to function effectively, more effectively as a team. And it’s really been exciting, there’s a long way to go. But again, it’s kind of like breaking the norms. The norm is you need an asset management department, you need an accounting department, you need a property management department. Actually, they are largely dysfunctional in a modern operating environment. You need those disciplines highly developed for sure in your business. But the people who have that particular expertise shouldn’t limit their contribution to it. And people who have other areas of expertise shouldn’t limit their contribution. And just because an accountant suggests something doesn’t discredit it, in fact might be a brilliant suggestion.

DA: Absolutely.

ME: So, this is probably the, operationally, the single biggest impact on us of the pandemic. And it’s been really, really positive. Now the pandemic has been difficult, but it can be one of two things. It can fracture an organization or it can make an organization more cohesive.

DA: Absolutely.

ME: I think we were successful in making Allied more cohesive as a result of the pandemic. And the other thing I’ve noticed is the pandemic shone a different light on everyone. It’s almost as though we got onto a different stage and the lights were at a different angle, so we all looked different, than we did normally, and some of our team really rose to that occasion and some, not so much. And we’ve of course tried to recognize those who did, and encouraged the behavior of those who did.

DA: Right, I think you’ve adopted a page out of the playbook for a technology startup because we’ve got the product team, we’ve got sales, we’ve got growth marketing, we’ve got client success, but what we tell ourselves and every day is that we’re all in sales. At the end of the day, as a startup, our number one job, everybody across the board, sales, and getting everybody to contribute. And so I think what you’re doing at this juncture in your business development actually could be quite rejuvenating. And I think probably will be pretty exciting in the future.

ME: And I think rejuvenating is a really good word. I think a lot of organizations will come through this rejuvenated and some may come through diminished, I hope not, but a lot will come through rejuvenated and revitalized for sure.

DA: Absolutely, absolutely. All right, our closing speed round.

ME: Okay.

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

ME: It has reemphasized to me how important it is, never to assume that things are going to stay the same, no matter how good things are, something is going to happen in our world beyond our control that Will present adverse change. So it’s something I’ve learned over my career, but we were in such a long run in real estate.

DA: Right.

ME: We almost thought, well, nothing can go wrong anymore, fundamentally. And then the pandemic comes along and it was a great eye opener in that respect.

DA: Right, fair enough. What travel destination do you miss most?

ME: Probably Istanbul. My wife is from Istanbul. We spend a lot of time there, her original family is concentrated there, so for sure it would be Istanbul, we love it there.

DA: All right. Anything new on your bucket list that you’d like to experience?

ME: In a very big sense, yes, my wife and I now have four grandchildren, four, three, one, and one. And I would have to say, for the remainder of my life, I want to have as rich and meaningful a relationship with my grandchildren as humanly possible.

DA: Awesome, well, I’m going to join you on that journey in a few months, so I’ll keep you posted.

ME: It’s a great gig, congratulations.

DA: Thank you. What is your favorite technology that is new to your life?

ME: It’s relatively new and it’s probably not going to reflect on me, but I have to say, I am in love with my iPhone. For years and years and years, I was true to Blackberry and true to the QWERTY keyboard. But about three years ago, I did the inevitable and switched to the iPhone. And I have to say, it’s a stunning tool.

DA: It is.

ME: For me, that’s probably the biggest thing.

DA: Okay, what is your personal choice for days spent in person with your colleagues versus working from anywhere? Not just the home, anywhere.

ME: I would say I want to spend virtually 100% of my time working with my colleagues. What I like about the receding of the pandemic is I’ve been able to go across the country and meet with our teams in Montreal and Calgary and Vancouver, and that was really uplifting, and I think really valuable for me and hopefully for them. But I want to spend 100% of my time with my colleagues.

DA: Great, okay, listen, Michael, I want to thank you so much for spending time with me today. Again, this is an interview that I’ve wanted to do for quite some time. I really appreciate your insights, your sharing of your personal stories, your journey. I hope that this a first of many conversations. We love to have guests back on the show and talk about how things have changed from the last time we connected. So again, I hope that we’re able to chat again. Continued success in your business, and I look forward again to opportunities to connect and collaborate. Thank you so much, take care.

ME: Bye now..

DA: I want to thank Michael Emory for joining me on this episode of TEN, and for contributing to the global conversation around buildings, being part of a robust ecosystem that can help to build great companies and that they are vital to the effort to cultivate and support great people and teams. The future of the workplace will likely take many forms and 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.