https://www.listennotes.com/e/f6f9cfa9a0f54607947ef31a0e82eae6

Welcome to Executing the Vision podcast. I'm your host, Brad Hunter, president of Emerge Labs. On the podcast we'll get to know the person behind the vision, their successes, their challenges, and their plans for the future. If you're interested in becoming a guest or know someone who might be a good fit, stick around to the end and we'll discuss how to apply. Now enjoy the show. Well everybody, welcome to another episode of Executing the Vision. I'm your host Brad Hunter. Today I welcome Todd Lickerman, he's the Chief Executive Officer at cresa. And Todd, tell us a little bit about what CRESA is all about.

So CRESA is a North American based tenant representation advisory firm. So what do we do? We work exclusively for occupiers on helping set up and right size their portfolios for office and industrial in North America.

Okay, great. In which to me that space in general seems like, I don't know, one of the more dynamic spaces I can imagine. The past several years I was personally involved in a, in a situation like that. I was consulting with a company a couple years ago, a bank. And we were looking for new space. And you know, super interesting cause it's one of those tons of space available but then they have these companies that are still on these leases. And so the whole negotiating of that situation, you know, it's pretty wild where just you know, from a tenant trying to find space, there's space everywhere. Yet to get it at a reasonable rate was quite tricky because they had these other tenants still on the hook for it. And so I definitely like to really understand because I can see an incredible amount of value in what you guys are doing in today's marketplace. So definitely like to dive into that. But first, you know, run me through childhood, you know, where you grew up, kind of how you, your, your road to here.

So I'm from Chicago, so I grew up in, in Chicago and in a town called Evanston, which is just north of Chicago, where Northwestern University is. I'm the only person in my family, my extended family, who's worked for, for profit. So I come from a family of a lot of non for profits. My dad ran the Chicago Boys and Girls Clubs there, so worked in the inner city with youth in the 60s and 70s which was a dynamic time. And so I really enjoyed growing up in and around Chicago in a major city and cities have had kind of a big impact and it really has informed what I've chosen to, you know, to follow up and do as a career. I went to school first for physics and then transferred into the architecture program at University of Wisconsin. So I graduated as an architect and that was a nice fit for me. And I mean, it's a creative function. It was before cad. So my senior year of college was the first year of CAD machines that showed how old I am. So I'm the last kind of class to graduate drafting, you know, paper pens. Which is archaic, right? Very archaic, but very old school.

And how did you at the time, by the way? I mean, obviously now that's just what everybody's known forever at the time. How was that transition for you? Was it seen as like, oh my gosh, this is such an amazing tool or. Or was it seen as.

It was clunky at first, right? I mean, just think when computers first came out, they were big and clunky and they were not faster than doing it yourself. So I totally missed like today, technology, as with most things, is better and faster than doing it without it. Right? It wasn't at the time, so. So the promise hadn't shown up. It was a pretty analog world that back then, 1985, I worked for a year practicing as an architect and wanted to see how buildings went together, how they were built. So I went to work for a construction company and worked my way up in management. A construction company overseeing construction projects, multifamily retirement village, and then a lot of office interiors, which was sort of the specialty of the firm. And the firm was owned by a company called LaSalle Partners. We which I ended up spending 23 years at La Salle Partners. It's known as JLL today. It's one of the L's in La Salle Partners. I worked my way up from construction to project management, to running the project management group to working on the integration. So. So I always enjoyed kind of moving up the food chain in the design and construction process, trying to figure out why things are built, how to do it better, how execution can be done better if it's conceived of better upfront than spending your time there. And ended up in kind of real estate, project management, development management, and ran that division at La Salle for quite some time. And then we went public and then we merged with a company out of the UK international company to become global. And we changed our name to jll. So I was one of the people that helped kind of put that company together. I worked on the integration for three years and just sort of flew around the world and helped the company move from partnership to a global platform merit based public company. So spent a lot of time around that, then came back and ran A number of different divisions at jll, the facility management division, the energy and sustainability division, the corporate solutions outsourcing business, where they do integrated services for corporates.

And how long is that period of years right there that you're talking to that trend? Because I mean, the amount you must have learned during that period dealing with all those things must have really been something.

I have a three year shelf life, it matches my add and, and I'm relatively curious and that has kind of guided my career is I do something, I get interested in it, do something. I kind of have a thesis of what, what's that about? I gravitate towards it, see if I can do it, prove most of the time that I could do it and then say, hey, what's next? And so that works well, especially at jll because the company was growing as I was growing, so I could always find something new like, hey, I want to do something international. I raised my hand, you know, that, that works. And I think it's actually a good blueprint for contemporary career navigation today. You know, you have to steer your own ship and you have to know where you want to go and the kind of things you want to do. And you gotta find, put yourself in scenarios where you can learn things that are interesting and valuable and string them together to create kind of a valuable experience that creates a rewarding career. So that's been kind of a theme for me.

Yeah, yeah. Well, when you first mentioned that idea of, you know, you graduated architecture degree, then you kind of purposefully went in to really learn the whole process, it brought me back to just thinking about kids today, you know, it seems they just graduate and it's just drifting one job to the next, the next, you know, I can't tell you how many times I go and look at resumes to interview and hiring people and it's like, man, I mean, you are bouncing around to random jobs every six months or years since you've been out of college. Like no direction, no thinking ahead in purposeful. You getting into those things from what I see for the most part whatsoever, right. It's just like I get, get this random job that I happen to get. I don't like it here, I'm gonna get another random job. I don't like it here, I'm gonna get another random job, you know, and not having that foresight to really think through where you want to be long term.

Yeah, I think, look, it's really hard, right? It's easy to look back in hindsight and string it together in a way that sounds like you had a real strategy. I don't know if I had a strategy at the time, but I think, look, I think the work world today is fascinating. Just absolutely fascinating. But it's hard, right? It's hard. It's always hard to navigate your own and you're just kind of progression as an adult and when you decide to kind of go through different stages, it's a hard thing to navigate anyway. But I grew up at a time when I first started working where people didn't do that. They joined on somewhere and just did that forever.

Right.

And that was the norm. And actually moving around was frowned upon. And I found that terribly constricting, but I couldn't relate to that one bit. So I personally, you know, I, I look at this environment and go, yeah, that's the environment I wouldn't mind starting over. And again. Right. Because it's, it's loads of opportunity, a lot fewer restrictions than what I was used to. But fewer guardrails. True. And, and fewer pathways and you have to navigate your own boat and it. And that's not easy.

Yeah. Yeah. Okay, so with Jones LaSalle, that you traveled around the world putting all of that together.

Right.

And then what was the next transition after that?

Yeah. So. So eventually I kind of ran out of things to do at jll. I sort of had played all the positions I wanted to play at a big firm and I had built a couple of businesses or helped build a couple of businesses. And I got interested in doing that on my own in a private equity kind of environment. And I spent quite some time looking at those kind of opportunities. I got very close to running a portfolio company and eventually I took a job as CEO of a international real estate firm. A lot like a small version of Jones. I wouldn't. International firm, really. Based in London, but worldwide. Owned by an Australian company. An Australian parent company was called DTZ or DTZ Internationally, it's the way they pronounce it. And so I was brought on to carve that out of the parent company. We were supposed to take it public in Australia. But the truth of the matter is it was a partially built up global platform. It was a billion dollar company that needed to be a $5 billion company. Once you decide to be global and once you decide to be full service, you have to be in 70 important markets around the world, probably another hundred after that. And you have to really be very, very good at 10 different services in our specialties. And you can't be in between because people can't Say oh, you're global. How about can you help me in Brazil? And you say, oh, we're not in Latin America. You either have to be happy. So that got us to a strategy where we had to get to be that company. And it was about a $5 billion and starting point actually to then be in that level. We had to get there the fastest. The best way to do that was to go private with private equity. And that's what we did. So let a process and we ended up with two finalists and then at the end were bought by a consortium led by TPG and Ontario Teachers Pension Plan. And then we United States CEO of that company who bought a $900 million company in, in the US called Cassidy Turley, bought a bunch of other different companies and then we bought Cushman and Wakefield, which is owned by a Italian conglomerate. And so we bought that and did a big integration. We brought all those firms together and here we were three years later and it was a viable global platform. All those predecessor companies now were able to scale across the world to serve those clients. So it was another one of these platform builds. Super fun. Kind of burns out after a while. It's a lot of heavy lifting. Private equity thing was, was fun and, and learned a lot. We were getting ready to go public and it was just too much for me. I just was a little burned out. They said, you know, this is going to take another seven years of my life. You know, I had, I was in year four and a half, so 18 months past my cell date and just decided to take some time off. So I actually retired before they went public, which was awesome. It took three years off. So that was, you know, that's another kind of cool thing unheard of when I was growing up. But this idea of this sabbatical or this midlife break is a very, very cool thing if you can pull it off in your career.

And now two questions. Question number one. You, you know, clearly as far as a CEO bounced around, done a lot of amazing things, what would you say your style of management is? I mean, what's made you successful in so many different roles?

Yeah, my style of management is really about try to envision, try to read, read the markets, understand what the core value of your business is and create a vision of how to take it to the next level. If I can't find that, then it doesn't really hold my interest. There's not really a role for me. So I like to understand what can be, work on it with others to envision, to See if that thesis can come true and then go do that. Visionary is a strong word, but it's a sort of a let's go create something strategy and then align with great people to go do that. And then hopefully you create a vision that lives beyond you. Right. It's a little less management, probably. A little more leadership, a little less management management. I'm not a big rule follower, so, you know, I don't, I don't really fall in love with the mechanisms of management. But I'm a big fan of talent, I'm a big fan of strategy. I'm a big fan of people aligning around a goal and coming together to do something they couldn't do on their own. I'm a big fan of personal development and the right kind of structure that enables a company to perform. So I kind of spend my time on that stuff, kind of architecting things and then lead by doing and then.

Talk to me about the sabbatical. What did you learn from that? What'd you take from that experience?

Fantastic. One is, especially in my generation, you just worked and worked and worked until you did right the American way. And then, I don't know, something happens when you're 65 and you do nothing but you work, you, you invest heavy and there is a monotony and a grind to that when you do it that I think lends itself to a big break. We had looked at this once at JLL. We had looked at giving somebody, everyone after 10 years a month off, which sounded radical at the time, doesn't sound too radical right now. I think that kind of thing is really good because I think you need time to stop, put down the tools, go think about something else and then recommit yourself to a path if you choose to go back. It ended up being three years. I kind of thought it would be forever. Kind of thought I don't really need to work again, so why would I? So two things happen. One is I had a son who was going to school in a French immersion school. So he moved to Paris and he just went to school and went to second grade in Paris. And Paris is the best residential city in the world. The most successful, kind of has all the fabric of it. I mean it's a beautiful place, but it is a wonderful, high functioning city and what a great place to live. What a great place to live. So we live right in the seventh Aaron D. Simon and loved it and probably would have stayed. My, my dad was getting older. We kind of need to be back for that. That Chapter so we came back. But that was really great. You know, you do holiday trips, but there's. You don't really. You need to be someplace at least for a month, if not six months, if not two years before you really get in the groove. So that was the best part, I would say.

I too was able to take a year off after my first 10 years. Took a year off, traveled around. It was funny for me. At the end I decided I'm never going to retire. I never, I want to keep working until the day that I die. You know, that was kind of for me it was traveling around the world doing all sorts of fun, cool stuff and just, it made me appreciate stress. Without any stress in your life, everything becomes very flatlined. Every day becomes very like, what are we going to do today? We're going to go skydive. Oh, that should be cool. Yeah, that'll be neat. You know, like there is, I think it really made me appreciate the idea, the value of stress. You know, you need those little stresses and it's the balance, right. If just it's more about finding that balance of there has to be something in the, when you wake up in the morning that pushes you a little bit.

Challenge something that's bigger than yourself that you can go do.

Yeah. Yeah. Okay, let's get back to the work front now. So talk to me then about where you're at now with cresa and you know that, that transition over towards, you know, from the real estate side it seems into the service side of the industry. Right.

I came back and I, I didn't think I'd go back to work, but I had, I had a very long list of things I wanted to do with my. I actually it was 40 things, 42 things and they were in big buckets and like one of them was around cities. And I started this non profit about city revitalization in Chicago and that was super fun. And then I went and lived in Paris. There's a whole thing about cities. There's a whole thing about travel which is great hobby wise. I have interest in woodwork and metal work and that, that was super fun. And, and ceramics and then sky sports. I'm a big sky sports, but a recreational skydiver for about 24 years flying and just anything where I can get in the air, super fun. But then it came back to business and I thought let's get on the board of a big company that had something to offer. And I interviewed and I looked at some big company boards and I realized, ah, this level is so high up. You're really just governance and your governance at the behest of the current CEO or chairman. And that's a, that's a rubber stamp duty. That's not really for me but by accident I had gotten calls from a couple of mid sized companies, one of them Cressa, and they just said, hey, your background looks great, this is what we're doing. And I looked and I said, you know, we always said, we always said at Cushman when we were in strategy sessions that you either need to be big and broad and full service or you need to be highly focused in major markets and crescent a focus only on the occupiers, only on tenant representation, only in North America. In my view, it's the best business in the biggest market and there's a privilege of focus in companies like that because they tend to be anti bureaucratic because everyone's doing the same thing and you're like minded and it's easier to have strategies and strategies don't get watered down. So I really like that, really like it. Also in the world of real estate, there's investors and developers and managers and direct investment that see real estate as an asset investment, asset class. And then there's the other side where I work on, which is the occupier. There's the people that own the space or rent the space and it's their home and it's their means of production. So for our clients, real estate is not an investment, it is not a capital investment, it's an investment of expense in the means of production. And so they look at the roi not in hey, I might have an asset that I can sell, but hey, this is 1%, usually 5 to 11% of the cost of business. That's that I'm putting this in that to go do something. So it's an enabler. And the neat thing in real estate is if you've got an empty building or a piece of land, you got a problem. If you have a client who is the end user who's trying to mold real estate around their business, you always have the opportunity because you can put them in wherever it's the least cyclical and it's the most rounded, I think part of real estate. So love it. And by the way, everybody who chooses tenant wrapping is in it feels the same way. Like I'm on the right side and the advocate for the end user. I try to go deep and understand what they need and then we try to fulfill it and try to remake it in that Dynamic. It's really interesting because real estate's very, very expensive. Buildings are expensive to build and to get rid of. They take a long time, so they require a lot of capital, which requires long commitment periods. So if you're going to spend whatever 600 a square foot to build a building or $80 a square foot to lease it and you have to put tenant improvements in it, you're going to end up with a long commitment. You're going to, you're going to have a long term debt on the building or you're going to have a long term lease. It just goes with the level of capital that's involved. So what happens is you have these series of very long term commitments. I own that building because we built it 20 years ago, or I have this lease that's 10 years in length, which is the typical for a decent size. Obviously what happens is that that commitment of a fixed space almost never matches the need at any one time. So your actual need for space and support goes up and down and changes and it changes geographically too during the span of when you own it. And so our clients, it's interesting, almost never what they have as a portfolio almost never matches what they need at the time. So there's always something to do, there's always something where is what you have what you need. If not, let's go look at it and let's go make it what you need because again, you don't work for the space, the space works for you. And let's constantly refit your portfolio to fit what your business is doing. And that's kind of the, that's kind of the strategy, the secret sauce behind what we do. And that's how we find, you know, the COVID was a, was a heck of a contraction. You know, I've seen five major contractions in my career now and you think they're never going to happen again. And they kind of happen every seven years. So I've seen, you know, major contractions. Covid was, was definitely the most impactful and I think we all know this intuitively. One is because things shut down, people stop making decisions. So corporates stop making decisions for about nine months, felt like longer, but it's about nine months when nobody made any decisions, right. And that usually happens. Global financial crisis, you know, financial markets freeze up, you're not sure what's going to go on your business, you stop making decisions.

What did the industry look like coming into Covid? I assume that great, strong and in the midst of a big growth, everything looked really Good coming into it always does.

It was not bubble. This was an O2 or you know, 07. These were, these were bubbles or they corrected. We didn't have a bubble. We just had a decent strong, I'm talking about the US we had a decent strong economy that was clicking along right at kind of the highest point head. Then if you look at the stock market as a guide and then contagion happens out of nowhere. Hard, hard, hard, hard correction down. And remember we were talking about is this a long U shape, Is it a long or is it a V shape Correction. And nobody thought it'd be a V shape. And that's, that was wishful thinking on behalf of analysts. Well, in our business it was a hard V shaped correction. So it dropped 35, 40% and corrected above. So let me tell you about what our experience was in our business. And this, this directly reflects decision making with corporates. 17, 18, 19 were all the best years ever in our company, as was the stock market. 20 was one of the worst corrections ever because things stopped. 21 was significantly better than 19. So we corrected above the pre pandemic starting point in 21 and then we beat it again in 22 and then we beat it again in 23 and 24 would be probably about the same as 23. So you know, high. Correct. But, but we, we're now building back up and, and, and many things look like this. Knowledge worker job creation. Right. Jobs big, doing great, boom, correction. Now we're back up. I think we're up 7% from free from 2019 pre pandemic. So we're talking about a real big correction. But then now we're above significantly where we were in 19.

And you're saying when we're above, is that referring to office space, you know, tenant occupancy rates.

Our work reflects decision making on behalf of corporates. So it kind of reflects the stock market, it reflects the overall health of companies now in that companies are using less space. Now there's a tale of two worlds in our world. There's industrial, which is, let's just talk.

About all the warehouses and all the Amazon type stuff has been going bananas. Right?

Just bananas. Right. We all went to online and then, and then we went from online to same day and then we went to global shock and supply chain and everybody went from just in time delivery footprint to just in case. Right?

Yeah.

And so that balloon, the size of the distribution center and it moved them and they had to get closer last mile. So the whole fabric of when we say Industrial it's really distribution centers is what is what is what we work on. That whole footprint grew and changed pretty significantly 20 through now and is a much more purpose built infrastructure in the U.S. you know you almost wish you could redesign the electrical grid the way we redesigned our distribution center infrastructure in the U.S. it's big, it's robust, it's size for purpose. Investors went to it and they made money in the real estate, but really retailers, and not just retailers, but businesses figured out how they need to remake themselves to capitalize on that new economy. Fantastic office. Not quite. They figured out what they needed to do as a company to survive and the best of them thrived. I mean just look at valuations in the stock market and sure some of that is a valuation bubble, but a lot of it's fundamentals. This company is the best of the the best of the country did well that's it's haves and have nots and there's a whole section that didn't but just talk about the health of corporates. So we are servicing them and we're changing their footprint as their leases come up, as they make decisions to grow. And a couple things happen. Office real estate change from a kind of begrudgingly must have cost to attract or retain talent. And all of a sudden we had seen this coming but all of a sudden we knew that the issue wasn't cost, it was talent. And the only reason you have an office, especially if you can go back to a clean sleeve sheet of paper, is to convene the workforce. And the workforce is the talent that you need. Now a couple of things happen. One is about 15% of the jobs in the U.S. the knowledge worker jobs found themselves to be remote and they will permanently be remote. But it went to about 25% remote work during the COVID About 15 of that is work that just can be done remotely and should and it's actually better, faster and cheaper. No problem. Access to talent, certain jobs, the rest of it about 35 to 40 needs to be in the office all the time and about 50% of it needs a hybrid solution. And that's kind of where everything settled. About half of the knowledge based workforce needs to be in what has come to three to five days a week. You just saw Amazon, just said it's five days. Everybody in. They said that for very, very specific reasons. They said we've become bureaucratic, we went slower, we become more expensive and bloated. We need to huddle up and get back to business. So they reconvene the workforce as a way of collapsing and speeding up in general. Three to three days, three, four days a week, same days, have about half the workforce. And so it hasn't really. And then about a third of to be there all the time. And it's remote. So it hasn't really changed demand in as much as you might think it would.

What has happened in some of these bigger cities where you see some of these huge office buildings that, you know, were 200 million sell for 12 million, or what's happening in those situations? I mean, I understand the general concept that there's not as much demand, but some of those seem so. Like.

No, it is. So first of all, we went into the pandemic with 12% national, 12% vacancy, which is about the norm. That's about the cycle of things. We have to remember that we had a very, very cheap capital bubble we had with artificially low interest rates that probably does pump up investment in fixed assets more than it otherwise would. So that if we had any kind of bubble, it might have been that. Then you go into it, we have like, what, 23% now? Something like that. And so 0.3% is huge. And in some places it's much higher than that. You go to Houston, go to San Francisco, it's much higher than that. So it did. Obviously, the tide went out. Vacancies are very, very high. We have to realize that half of that was already in the system before you got there. And norm is not. It's kind of like inflation. Low inflation is 2%. And so when you're at 5, it's high, but zero isn't the stasis. Right. So we've got that now. Really interesting thing if you dig into that. Tough time to be an investor in office buildings. Really tough. We grade office buildings. Class ABC and A is the shiny new stuff. Office, you know, white shoe, professional firms, that kind of stuff. Buildings that are built in 2015 and above have taken almost all of the absorption. Almost all of it are in buildings that are new. So buildings 215 and newer across the country are doing quite well. They actually have. They actually have rental pressure, upward rental pressure. It's a thing called flight to quality, everybody. Hey, if my credit's good, if my demand is good, if I know I need to be someplace, I'm going to the best building. Partially because you're doing it to attract or retain talent. I need to be in that city or I need to be in that locale, or I need to get talent that's there and I want to be in the best place to get everybody back in. So the best of the market is doing quite well. The B and C stock, anything built before 15, God forbid, anything built in the 80s and older has, is a race to the bottom. So what happens? Typical ownership debt and then some kind of an equity stack group of people that own a building could be pension funds, could be whatever. What happens is, is that cost of debt goes up. So the business, even if the fundamentals are the same, the building can't handle as much debt as it used to because the interest rates are higher. And so when that debt comes up and investors tend to use five year balloon notes in general in that five year cycle that we're just about working through our last year now, banks might be willing to refinance if your buildings in as good a shape as it was before, but they're going to refinance for less. So if you and I own a building, we have to put more capital into the building just to keep it. That'd be hard enough. That will be hard enough. But you then have the other side of the shoe where the fundamentals have probably retreated on them. The cash flow is probably down because tenants have probably left a building unless it's the best of the best. And so you have lower cash flow, lower fundamentals, less debt. There's a huge recapitalization or equity check that would have to be written to stay owners of the building. And what happens, buildings go underwater and there's quite a bit of that, there's quite a bit of building, especially in the B and C and they're underwater to the point where ownership walks away, gives the keys back is what they say. Banks end up owning property which they hate to own, the property they really can't own and so they sell at whatever the market will bear. And that's why you've seen places like San Francisco. There have been buildings trading it's so far below replacement cost that it's almost for that class. It's almost a race to the cost of the land.

Yeah, yeah.

So there's a lot of bloodbath among ownership, but that's what's going on. That's why you see things trading so low. And you're starting to see it now, you're really starting to see people have it sort of kick the can down the road, maybe, maybe some lower interest rates. But as you can see, lower interest rates doesn't. Don't dig you out of this hole.

I was in the retail space, in the shopping malls For a lot of years, we had locations all over the country there. And. And that was back in the early 2000 when retail was still doing really well. Right. And then over the years, obviously with the online stuff, there's been a big shift there. But it seems to me that for the most part, retail has done a pret. Pretty good job at being able to kind of stay alive, doing different, you know, becoming more lifestyle centers. Right. With more things like that. So it seems like they've kind of sort of figured out a way to survive. Now what happens then in this office space world is that the idea that these big downtown buildings that are no good for office space, like really what's happening is those are going to be torn down and rebuilt into condos or something totally different is what will most likely happen.

Yeah. So it's a cycle, right. And it. And it plays out with different players because what happens is the owners, you know, as a saying that if you used to have equity in A, B or C building, you used to have equity. Right. The players that used to own the buildings don't and won't. Right. So that's the difficult part of it. Once that happens, once you fess up to the real, where's the value? Then you have big urban centers that have an awful lot of interesting old buildings that are fundamentally at the value of land, and you have to reimagine their use. There is a life pattern to cities, and boy, you see this in Europe because they're residential cities. You know, there's a life pattern of cities that, that we had sort of destroyed in the 60s and 70s here, you know, the kind of a car and you go out to the suburbs and the mall and everything sort of disintegrated the city and the car was the connector. The truth of the matter is cities are the most efficient way to live. And there is a talent concentration and there is a resource and use in cities that have momentum, that are really, really, really hard to kill off. And you know, we used to say after 9, 11, we used to say it'd be a long time for New York to rebound. And New York rebound beautifully. Why? Because all the talent went there. All the young kids said, I'm going to New York. Right? Talent choose where to live. And then companies have to have to follow. And that is happening now. And cities are vibrant places. So what you have is you have this time. It's an. It's a difficult time right now where you have the strength of cities, but you have some real missing teeth in the fabric. And then at the same time you have a, you know, a generational housing crisis. So on paper it would say housing is what's needed, housing should fit. Housing and other life uses should fit in where the office use isn't. And I think that's going to be true, but it's going to be rocky to get there because a lot of people have to lose value and they have to find a way to rebuild it and find a way to do it. And, and housing is expensive because it's expensive to build. You know, everything's luxury mainly because it's really expensive to pull something off. So I would think the pressure from the housing piece and the strength of Cities, fast forward five years, 10 years, you're going to see cities back being rebuilt in a much more vibrant, long term sustainable way. But it's, it's a hard time to get there.

What's the future of the workforce? What role does technology play this? Where are things headed?

Well, so we're in this really interesting demographic warp that we're entering into, right? Baby boomers are aging out, right? Baby boomers. Now there's a lot of dynamics that will keep people in the workforce longer. Two reasons. One is because they have to and two is because they're needed. So you're going to see people working longer. However they do it part time, a little bit here, leave, come back, whatever it is, it's good. Flexibility is going to be the name of the game at the top end. And you have to have it because we have a Covid. Covid created a real shortage of workplace participation. Whole people evaporated from workforce. Right. And that's going into this demographic time where the numbers behind are not larger than the numbers ahead of us. Right. So you know, the whole whole U.S. system coming out of World War II was, you know, it was this where the workforce is so big. Social Security is a no brainer because you have, you know, 15 people paying in for every one in it or more. Now we got more like this in some places like Italy and Japan are just.

Yeah, I've read some very interesting books on that topic.

And China's going to have it in the most worst way. But we got a little bit. And so, so you got. But we also have a higher, sometimes my office use, so. So knowledge worker, you have higher education rates, which is great. You have a workforce that is going to be needed. I mean if you just go by the general Labor Department statistics, they're protecting about 2% workforce growth, which is really pretty low given where we've come from. And so we don't have enough workers. There's some places like farm work and certain things, factory work really don't have enough. And there's an immigration issue that's been shut off. If you talk about office work, it's literally just the numbers are smaller than who they're replacing. So two things are going to happen. One is you're going to extend participation. Older folks will work longer however they do. Other people will come back into the workforce however it happens. Some of the things that we've said you kind of want to. So that will help. That definitely helps. The other is technology. And AI is a force that's coming at the right time. I think if you look at what's happened in our lifetimes, personal computer, Internet, real adoption of tools and dot com, that all drove productivity, drove productivity at times. But we've been on a pretty, in the US we've been on a pretty flat productivity curve here and then we're facing a demographic slowdown. So AI is coming at a time where it will do a couple things. It will, it will enlarge the economy and it will drive productivity. And on paper, in whole, you really need it because you cannot drive old school productivity on the backs of workers because they're just not there. We'd be looking at much, much lower growth here. We should be able to support pretty significant top line growth at the top of the stock market part of the economy. It'll be doing more with less, fewer workers. That's good, that's interesting. That's exciting. Got some dangers, but that's a, that's a net. Net. Good. Now what happens is whole types of jobs will get cycled out and then new things will come in. People will have to be reskilling themselves to stay relevant. But I think they will because they're going to be needed.

Talk to me a little bit about how you view personal growth, you know, because I feel like that also ties in. We just talked about the retraining aspect of things, you know, because you mentioned that as part of your leadership style. It seems like just a few of the things that you really seem to kind of live. Like what, what does that mean to you? How do you go about kind of, you know, getting personal growth in your life?

Yeah, I think it comes from just curiosity. I think everyone's got their own drivers, but for me it's a curiosity. Love learning, love experience. Right. So it's just what's the next interesting thing to learn to do, to develop and to create, so that that's kind of enough fuel to keep you going. Right. And then it's just a matter of kind of keeping yourself within some guardrails that you're not just like a rocket without a rudder. I think that is a very, very useful thing in this world, in the world we're faced with in the next 20 years, because I think the curiosity will pull you towards things that you care about, that you have some passion about, that you'll go the extra mile for, and hopefully you'll find enough places to do that that create real value. Right? And the thing I love about the technology wave that we're just on the tip of now, it's not about coding. It's not about some secret, you know, thing you have to go study it in school. It's about deep domain expertise and knowing how to interface with. And interface with some very bright tools. But look at it. You don't need to be a coder anymore. You wouldn't. Going to school for computer science does not mean I'm going to be a fantastic coder. It means I'm going to understand how to work systems and how to have them interact with humans to create value. So the cool thing is all of a sudden your IQ on actually knowing how technology works is a little simpler, actually, because AI is a little easier to understand, frankly, than how do I write code? So I think that's really, really, really fascinating. I think there's the set of tools that are being made available to us and they just 1020 x productivity and they take you to a level of getting stuff done and understanding what can be done so much faster than ever before that I think it should be a really kind of an explosive time here that we're just now entering into.

Yeah, yeah. So, you know, we do software development, right. And so of course, you know, the whole AI thing in our world of what we do, like we haven't. It hasn't changed our world that dramatically yet. And I will certainly say yet, because there are some very, very interesting things happening on the back end of AI that I don't think people are aware of. You know, that idea of they have these different language models that they're really starting to create a ton of niches for these things. Right. And I think that you're going to see in the next year that explosion into such a broad range of what it can really do. Right. Because I feel like now it's kind of Neo, you know, it can do a lot of, like, neat little niche things, but it Isn't necessarily has this feeling that it's going to take over the world. There's this talk that it's going to. But when you really look at what's out there, it's kind of like, I mean, you know, I could see it does it, you know, to me it's like marketing great. It does a lot now for marketing and it can create graphics and create all sorts of blah, blah, blah, but that's about it. But yeah, when you really see what's happening in the back end of things, I really think that yes, within a year there is going to be this very broad explosion of what it can do in such a massive range of things. And then on the other side it just. When I step back a little further and look at the general concept of it all, you know, I mean there's definitely fear side of things that man, I mean just we keep building these machines that are exponentially faster and smarter and then the idea that. And we really don't 100% understand how they're doing what they're doing. You know, when you really listen to some long form podcasts about it, there's definitely that double edged sword of like boy, from a developer standpoint, it's like, this is really going to be amazing. Next year is going to blow some people's minds. And then on the other side of that sword is like, and then who knows what else really could come of this?

You know, it's something else. We haven't seen this potential pace of change that gets, I don't want to say gets away from us, but goes beyond us so quickly. I mean technology always does stuff better than you do, right? That's why you have it, right? So computers have been smarter than humans in certain ways. I'm terrible at math. I love Excel. I don't do math. There's always a section of it. But this is so broad based and so conceptual and so quick and its ability to look into and draw from the whole of at least the written experience and the data experience and so quickly. I was listening to this podcast about neuralink, the Elon Musk thing where they're doing implants and his whole thing for doing that is about bandwidth. Initially it's helping people, paraplegics, whatnot. But the big thing is bandwidth because his point is language and typing really slow, low, low bandwidth and the bandwidth that LLMs and AI are doing, you know, trillions of calculation per second and we're here doing like this. He said it's like, it's like Talking to a tree. If you think of how quickly they think and how fast we think and respond, we're like trees.

Yeah.

Given how fast it was. Right. It could get away from us. You got to hope the controls stay there. Right. And you know how to turn it off. You know how to put guardrails around it. But it, it is. It's fascinating. And there's things that I think it'll do. It brings dimensions to things. And so this is my favorite. Hasn't really shown up yet, but I've often thought, you know, just look at medicine in the U.S. medicine in the U.S. it's hard as heck to get in to see your doctor. You got to know, you got some reason to. And then you got to find the right one. And then he's got to get. He or she's got to get to the right specialist. That's really slow moving and it's really not very customized. And doctors don't have a lot of data on you. They're working off of whatever they can remember. I really don't want to see a doctor unless he's got the AI right next to him, because I want him to see it. And then you want tons of data. If we can increase the amount of data that's going on in our bodies, the AI and the doc can see, then I want them, after they traverse to tell me what they think is going on, and they get to a place of customized medicine and prevent it. That is so different than the dark ages of you go see the doc and he asks you four questions and he diagnoses you and gives you some kind of blunt instrument medicine that. I really think there are areas like that that can and should be able to plumb the depths of knowledge to point at big hairy problems. And that's when you kind of like things like medicine, things like energy, things like drug development that are just. They're big, big kind of generational. What people. People work on drugs their whole life and they may still never, you know, they push the ball this far on research and if all of a sudden that can be accelerated. Be fascinating.

Yeah, I've heard some unbelievable ones about that, about on the medical side of things, how they. They put AI on this and it more in like two days than. Than medicine has in like 20 years or something. It was a crazy. Which makes perfect sense, right? I mean, it's just analyzing incredible amount.

Of stuff we don't have today. That's. That's like. We don't have that today. So what's the Net effect of that. Is it going to put a lot of doctors out of business? Probably not. There's a doctor shortage, right. Is it going to make a massively more accurate productive. Yes, as and when they can adopt. So that to me is, that's just good.

And do you have any recommendations for people? You see I, I imagine in general you on a regular basis are interacting with a lot of high level people. As far as, you know, where things are going for the average person, what do you recommend for them to be able to, you know, just kind of pay attention to this source of information or that source you really have a good feel for, you know, the direction things are headed.

It's really interesting because AI is so broad and it's being so crowdsourced right now. Tens and thousands and millions of people are working on different aspects of this larger collective thing in the AI sphere that it's really hard, it's really hard for the experts to stay across. You almost have to make that a full time job to be really good at it. So the rest of us are just dabbling. But I think there's a curiosity when as and when things come out, they seem to be finding their way to the public pretty quickly like ChatGPT and the Mid journey stuff. And there's there, there are about a dozen really cool apps that are almost free, if not free, that do really interesting things. Now they're kind of novelties but they're the baseline of what will be a whole different way to work. So I think part of it is just kind of keeping your wits about if you hear something good, you go try it. You go see and yeah, yeah, because.

Any of the tools, they're either free, I mean shoot, the most expensive ones may be $20 a month, right. It's usually like you can start for free use a little bit, then maybe you're paying $10 a month.

To be honest, I think the chat GPT4.0 though the, the one where you could put a voice around it and talk to it. I was on a long driving trip so I was driving my wife's Tesla and by the way the new Tesla's have a dash cam that they can tell if your eyes are looking straight out on the road. So I had the total automated driving going and think I'll just do some emails. You can't. If you're, if you start looking down it'll be take control and if you do that like four times it shuts the, it shuts the auto down. So you have to look at Your full autograph. You got to look outside. And then I'm like, what am I going to do? So I fired up the chat GPT. You put a voice on it and you just talk to it. And for learning geeks and those with add, it's fantastic. So I start out with, tell me the top 10 economic thinkers over the last 200 years. All right, you know, Thomas Hobbs, go. And then it'll just explain it and explain. It's really good at explaining the depth of human knowledge and concepts. Please explain the difference between nuclear fusion and nuclear fission. What are the barriers to development of nuclear fusion? You can go down rabbit holes in it conversationally, which is good. Higher bandwidth, it's so. It's so nimble. It's so nimble. It's very, very natural that I think that's kind of an interesting point.

I love that whole thing because I'm, I'm a big list. I listen to a lot of podcasts and I end up doing a fair amount of just driving for trips and blah, blah, blah. And I, I've never even considered that concept. I love that idea.

It's so good. And it's. It's almost like reading books. Like I've, you know, there's some books that are just too big for me to get through. And. God, what was it? A Tale of two. No, Crime and Punishment. Right. Dostoevsky. And I just said, explain the outline. And I said, okay, with more detail. Okay, with more detail. Okay. How does it start? Okay, who are the characters? And it could just take you through the essence of the book just by talking to it.

Yeah, that's great. Okay, so let's end on this one here. Explain to me with cresa, who's your ideal client? Who is, you know, someone's in that space? Just who's your ideal client? How do they get in touch with you?

Yeah, look, our ideal client is any corporate who's using officer industrial space who's. Whose business is growing, shrinking or somehow they're. That what they have doesn't match what they need. So it's most any. Every corporate. And look, they get in touch with us by reaching out to us. Look for me. Look for crescent. We're probably calling on you. It's a dynamic, very, very interesting time. I like what we do because I think there's a lot of value. It's very expensive. These deals that we do. Mistakes are very expensive. And so good advocacy advice proves up its value. And that's what me and my thousand colleagues have committed our lives to. And we look forward to seeing everybody out there in the economy.

All right, well, awesome. Thanks again, Todd. It has been a fascinating conversation today. I appreciate it. Appreciate you coming up. Thank you for listening to Executing the Vision. If you'd like to be a guest, go to EmergeLabs US and click on the podcast page. If you like what you heard, please share the episode. Subscribe. Ratings and reviews go a long way to help promote the show. You can find us on Instagram @Brad EmergeLabs, as well as X, Facebook and LinkedIn, where we strive to provide valuable information on business and life. We'd love to hear your thoughts on the show and what you'd like to see in future episodes. Thank you again and have a great day.