WEBVTT - ICYMI: Hybrid Works Persists 0:00:02.520 --> 0:00:09.719 Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg 0:00:09.880 --> 0:00:14.400 Business Week with Carol Masser and tim Stenoveek on Bloomberg Radio. 0:00:14.920 --> 0:00:17.439 Well, the debate over remote work seems to be back, 0:00:17.480 --> 0:00:20.360 at least I don't know. We kind of keep hearing 0:00:20.400 --> 0:00:21.960 some things. It could be here for years to come. 0:00:21.960 --> 0:00:24.640 At least that's the subway was empty this morning for me. 0:00:24.840 --> 0:00:25.960 I see it certainly well. 0:00:26.000 --> 0:00:28.639 And this is the middle of summer ninety week, going 0:00:28.640 --> 0:00:30.200 to work when it's really hot in New York City. 0:00:30.200 --> 0:00:31.120 I don't know if that's what it is. 0:00:31.160 --> 0:00:31.479 I don't know. 0:00:31.520 --> 0:00:32.360 He said a funny week. 0:00:32.600 --> 0:00:34.199 Last week was a funny week. I thought last week 0:00:34.240 --> 0:00:35.280 was until September? 0:00:35.280 --> 0:00:40.240 Is funny until September Bloomberg Actually earlier this year, they 0:00:40.360 --> 0:00:42.360 pointed out, though, that we would kind of continue to 0:00:42.360 --> 0:00:45.000 have this debate. This was after President Trump added fuel 0:00:45.040 --> 0:00:47.760 to the remote work fire when he called federal workers 0:00:47.800 --> 0:00:49.760 back to the office full time. He might remember that, 0:00:50.040 --> 0:00:52.680 and that followed similar moves by JP Morgan and Amazon, 0:00:52.800 --> 0:00:54.560 And at the time it did renew some of the 0:00:54.640 --> 0:00:57.880 tensions between those in favor of in person work and 0:00:57.920 --> 0:01:00.320 the cohort that been working remotely. Or with a highat 0:01:00.480 --> 0:01:03.760 hybrid arrangement since the pandemic. So curious to see what 0:01:03.800 --> 0:01:05.760 our next guest has to say because he knows something. 0:01:05.880 --> 0:01:07.119 You know, it's actually a lot about this. 0:01:07.240 --> 0:01:10.080 Mark Dixon is CEO of International Workplace Group. It's the 0:01:10.120 --> 0:01:13.440 Flexible office company that owns the Regis brand. Mark. What 0:01:13.480 --> 0:01:15.920 are we all doing? Because Carol and I we never 0:01:16.000 --> 0:01:17.119 stopped coming in. 0:01:18.120 --> 0:01:18.640 A little bit. 0:01:18.760 --> 0:01:19.520 I did a little bit. 0:01:19.600 --> 0:01:21.040 You were from home a little bit. We were said, 0:01:21.440 --> 0:01:23.119 we were told to you were told to go home. 0:01:23.120 --> 0:01:25.040 I started in the fall of twenty twenty and came 0:01:25.120 --> 0:01:27.160 right in, Yeah, you were. What is the reality from 0:01:27.160 --> 0:01:29.319 your vantage point regarding work from home hybrid? 0:01:30.600 --> 0:01:33.919 Look at this isn't basically the sort of debate about 0:01:33.959 --> 0:01:37.800 work from home hybrid is sort of not missing the 0:01:37.920 --> 0:01:41.040 whole point of what's going on. So what's going out 0:01:41.280 --> 0:01:46.280 on is the workplace is changing into a platform where 0:01:47.040 --> 0:01:50.120 companies who are the customers, they're the ones paying for 0:01:50.200 --> 0:01:52.240 the workplace. Not all of them, but a lot of 0:01:52.280 --> 0:01:56.120 them want to have much more flexibility, in particular in 0:01:56.160 --> 0:01:57.640 these volatile times. 0:01:57.920 --> 0:02:00.440 You know, AI, what's he going to do to blah 0:02:00.480 --> 0:02:01.200 blah blah. 0:02:01.840 --> 0:02:05.800 Hard to predict the future hard to go into permanent space. 0:02:05.880 --> 0:02:09.800 So companies want flexibility. They want it off the ban sheet, 0:02:09.840 --> 0:02:13.400 not on the balance sheet. They want op x, not capex, 0:02:14.040 --> 0:02:16.200 and they want to be able to find workers anywhere 0:02:16.240 --> 0:02:21.359 in the country. And that is what is happening. It's 0:02:21.400 --> 0:02:25.080 a strong move by corporate America, and it's a worldwide 0:02:25.160 --> 0:02:29.959 move where the real estate becomes less of something about 0:02:30.600 --> 0:02:35.200 leases and much more about people using a platform flexibly. 0:02:36.480 --> 0:02:40.000 So waat, so help me understand. So a lot more 0:02:40.080 --> 0:02:43.480 hybrid going on, even though we've got some big, well 0:02:43.520 --> 0:02:46.520 known companies saying it back to work, I mean give us, 0:02:46.600 --> 0:02:46.880 give us. 0:02:47.080 --> 0:02:50.720 Yeah, it's not about back to work. This is sort 0:02:50.720 --> 0:02:54.799 of a trivialization back to the office. 0:02:54.880 --> 0:02:56.360 Excuse me, yeah, yeah. 0:02:56.400 --> 0:02:57.840 Back to the office and backs of work. 0:02:58.520 --> 0:03:04.120 We're providing offices throughout the United States two thousand buildings 0:03:04.639 --> 0:03:07.400 by the end of this year, so pretty much anywhere. 0:03:07.040 --> 0:03:10.520 You want to work, you can go locally and work. 0:03:10.639 --> 0:03:14.280 This is about people not wanting workers, not wanting a 0:03:14.280 --> 0:03:17.240 waste two hours a day getting to and from an 0:03:17.320 --> 0:03:24.240 inconvenient office. This is about technology allowing sort of platform 0:03:24.320 --> 0:03:28.000 work to be a reality. So look, we're in the 0:03:28.040 --> 0:03:31.440 office business So we have one point four million offices 0:03:31.720 --> 0:03:35.320 worldwide today, and so we're very much in the office business. 0:03:35.360 --> 0:03:39.160 But we're in the office business near where people live 0:03:39.720 --> 0:03:42.800 and in New York City. You know, this isn't about 0:03:42.920 --> 0:03:45.080 you know, the only work he's done in the United 0:03:45.120 --> 0:03:48.360 States in New York City or Chicago. It's done all 0:03:48.400 --> 0:03:53.280 over the country. So this is about allowing people to 0:03:53.360 --> 0:03:56.360 work productively. They can do it at home, but it's 0:03:56.440 --> 0:04:01.000 quite difficult for most jobs, some jobs to home. A 0:04:01.040 --> 0:04:04.040 lot of people need an office to be productive, and 0:04:04.480 --> 0:04:06.480 it just doesn't have to be miles away. 0:04:07.280 --> 0:04:07.720 That's all. 0:04:08.000 --> 0:04:10.680 For a period of time after the pandemic, when you 0:04:10.720 --> 0:04:14.040 thought about the relationship between workers and managers or workers 0:04:14.040 --> 0:04:16.680 and companies, the workers had the cards or had the 0:04:16.760 --> 0:04:19.920 leverage because it was tough to find employees. That that 0:04:20.000 --> 0:04:23.400 relationship may have shifted in recent years as the labor 0:04:23.400 --> 0:04:26.800 market has softened a little bit, as that isn't as 0:04:26.839 --> 0:04:29.920 tight as it was before. Who do you view right 0:04:29.960 --> 0:04:31.760 now as having the leverage? 0:04:33.440 --> 0:04:38.279 Look, companies always have leverage because they're the ones paying 0:04:38.800 --> 0:04:41.880 the salaries, they're the ones paying the bills. So what's 0:04:42.040 --> 0:04:47.800 driving the change is it's much it's a much lower 0:04:47.880 --> 0:04:51.960 cost to support someone near where they live than to 0:04:52.000 --> 0:04:56.200 get them to come to wherever you are. So, you know, companies, 0:04:56.240 --> 0:05:00.200 this been driven by companies, not by the workers, just 0:05:00.240 --> 0:05:04.520 to be clear. So companies want to save cost in 0:05:04.600 --> 0:05:09.599 particular today, and they absolutely want flexibility with you know, 0:05:10.360 --> 0:05:12.880 you have to say, probably many of the things you're 0:05:12.920 --> 0:05:13.640 talking about. 0:05:14.640 --> 0:05:15.760 It's a volatile world. 0:05:15.839 --> 0:05:18.120 It's harder to predict what the next few years are 0:05:18.120 --> 0:05:21.400 going to look like alone trying to commit to five 0:05:21.520 --> 0:05:25.240 or ten years. Hence, so they want flexibility, they want 0:05:25.279 --> 0:05:29.360 to minimize capital investment, and that's what's driving It's not 0:05:29.400 --> 0:05:32.560 sort of this idea that somehow workers have got leverage. 0:05:33.080 --> 0:05:35.080 You know, if you ask workers, a lot of them 0:05:35.360 --> 0:05:37.560 will say, yeah, look i'd love to work near to 0:05:37.640 --> 0:05:39.880 home if i can. Some will say yeah, I'd like 0:05:39.960 --> 0:05:42.760 to work at home. But all of them want to 0:05:42.800 --> 0:05:44.200 be productive. 0:05:44.120 --> 0:05:44.279 You know. 0:05:44.320 --> 0:05:48.240 And it's not a sort of this sort of very 0:05:48.320 --> 0:05:51.599 polarized argument where it's a pull and push. It's a 0:05:51.760 --> 0:05:57.560 general push by corporations to have a much more effective, 0:05:58.040 --> 0:06:01.880 lower cost, more practical working in part for their people. 0:06:02.000 --> 0:06:04.080 So Mark, when it comes to the real estate model, 0:06:04.120 --> 0:06:07.320 the commercial the office real estate model, is it going 0:06:07.360 --> 0:06:09.320 to be then in your view from what you are 0:06:09.400 --> 0:06:13.520 seeing your vantage point, that it's more about not company 0:06:13.680 --> 0:06:17.920 x y Z building this massive headquarters and then maybe 0:06:18.040 --> 0:06:21.320 you know, satellite offices around the country. It's more about 0:06:21.720 --> 0:06:25.880 maybe having a headquarters somewhere. But then they're more likely 0:06:25.960 --> 0:06:29.600 to rent space from you. Is that increasingly what you're seeing, 0:06:29.720 --> 0:06:32.640 and so there will still be demand for office space, 0:06:32.760 --> 0:06:35.640 but you will be someone who owns more of it 0:06:35.760 --> 0:06:37.520 than maybe company XYZ. 0:06:39.160 --> 0:06:41.240 We don't own any of it, just to be clear, 0:06:41.279 --> 0:06:46.640 so don't no, we don't. We operate it for landlords. 0:06:47.360 --> 0:06:52.800 So landlords also can see the future. It's a technology 0:06:52.839 --> 0:06:57.560 distorted future where you can work from anywhere we all can. 0:06:58.680 --> 0:07:02.120 And so you know, the demand has changed, you know, 0:07:02.200 --> 0:07:06.760 that's that's the reality. So we work for building owners 0:07:06.800 --> 0:07:10.080 to convert their buildings and put them on our platform 0:07:10.560 --> 0:07:14.680 to make them available for people and companies that want 0:07:14.720 --> 0:07:17.080 to buy what they need when they need it, for 0:07:17.120 --> 0:07:19.840 the time they need it with you know, a simple 0:07:21.360 --> 0:07:25.400 you know, half a page agreement. Not there's no leases. Okay, 0:07:25.680 --> 0:07:30.240 So it's a modern it's the modern picture of real. 0:07:30.160 --> 0:07:32.720 Estate like ubrization right of office space. 0:07:32.760 --> 0:07:37.880 Almost yeah, absolutely, so you have a good picture. We 0:07:38.080 --> 0:07:39.680 only have about thirty seconds left. You have a really 0:07:39.720 --> 0:07:42.240 good picture of demand for this stuff, which I think 0:07:42.280 --> 0:07:44.480 we can use as a source of data on the economy, 0:07:44.480 --> 0:07:47.120 at least anecdotal. How would you describe demand right now? 0:07:48.200 --> 0:07:48.679 Very strong. 0:07:48.680 --> 0:07:52.360 I mean, look, we're growing. We're adding one thousand buildings 0:07:52.360 --> 0:07:55.760 a year. We expect it will be fifty percent more 0:07:55.840 --> 0:07:56.360 next year. 0:07:57.000 --> 0:07:57.240 You know. 0:07:57.360 --> 0:08:00.120 That's that's that's demand for you. And you look that 0:08:00.280 --> 0:08:03.600 revenue birth so on. That's that's that's how you can 0:08:03.640 --> 0:08:04.000 see it. 0:08:05.160 --> 0:08:09.200 Interesting stuff always always, Mark Dixon, thank you so much, 0:08:09.280 --> 0:08:12.280 CEO of International Workplace Group. By the way, there are 0:08:12.280 --> 0:08:14.360 ADRs that trade in the US. It's a three billion 0:08:14.400 --> 0:08:16.480 dollar market cap. They're up about forty five percent year 0:08:16.480 --> 0:08:18.160 to date. You take a look at the stock that 0:08:18.280 --> 0:08:20.960 trades on the London stock has changed up about thirty 0:08:20.960 --> 0:08:23.120 five percent year to date. So investors definitely interested.