Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg
Speaker 1: Business Week with Carol Masser and tim Stenoveek on Bloomberg Radio.
Speaker 2: Well, the debate over remote work seems to be back,
Speaker 2: at least I don't know. We kind of keep hearing
Speaker 2: some things. It could be here for years to come.
Speaker 1: At least that's the subway was empty this morning for me.
Speaker 2: I see it certainly well.
Speaker 1: And this is the middle of summer ninety week, going
Speaker 1: to work when it's really hot in New York City.
Speaker 1: I don't know if that's what it is.
Speaker 3: I don't know.
Speaker 2: He said a funny week.
Speaker 1: Last week was a funny week. I thought last week
Speaker 1: was until September?
Speaker 2: Is funny until September Bloomberg Actually earlier this year, they
Speaker 2: pointed out, though, that we would kind of continue to
Speaker 2: have this debate. This was after President Trump added fuel
Speaker 2: to the remote work fire when he called federal workers
Speaker 2: back to the office full time. He might remember that,
Speaker 2: and that followed similar moves by JP Morgan and Amazon,
Speaker 2: And at the time it did renew some of the
Speaker 2: tensions between those in favor of in person work and
Speaker 2: the cohort that been working remotely. Or with a highat
Speaker 2: hybrid arrangement since the pandemic. So curious to see what
Speaker 2: our next guest has to say because he knows something.
Speaker 2: You know, it's actually a lot about this.
Speaker 1: Mark Dixon is CEO of International Workplace Group. It's the
Speaker 1: Flexible office company that owns the Regis brand. Mark. What
Speaker 1: are we all doing? Because Carol and I we never
Speaker 1: stopped coming in.
Speaker 4: A little bit.
Speaker 2: I did a little bit.
Speaker 1: You were from home a little bit. We were said,
Speaker 1: we were told to you were told to go home.
Speaker 1: I started in the fall of twenty twenty and came
Speaker 1: right in, Yeah, you were. What is the reality from
Speaker 1: your vantage point regarding work from home hybrid?
Speaker 3: Look at this isn't basically the sort of debate about
Speaker 3: work from home hybrid is sort of not missing the
Speaker 3: whole point of what's going on. So what's going out
Speaker 3: on is the workplace is changing into a platform where
Speaker 3: companies who are the customers, they're the ones paying for
Speaker 3: the workplace. Not all of them, but a lot of
Speaker 3: them want to have much more flexibility, in particular in
Speaker 3: these volatile times.
Speaker 4: You know, AI, what's he going to do to blah
Speaker 4: blah blah.
Speaker 3: Hard to predict the future hard to go into permanent space.
Speaker 3: So companies want flexibility. They want it off the ban sheet,
Speaker 3: not on the balance sheet. They want op x, not capex,
Speaker 3: and they want to be able to find workers anywhere
Speaker 3: in the country. And that is what is happening. It's
Speaker 3: a strong move by corporate America, and it's a worldwide
Speaker 3: move where the real estate becomes less of something about
Speaker 3: leases and much more about people using a platform flexibly.
Speaker 2: So waat, so help me understand. So a lot more
Speaker 2: hybrid going on, even though we've got some big, well
Speaker 2: known companies saying it back to work, I mean give us,
Speaker 2: give us.
Speaker 4: Yeah, it's not about back to work. This is sort
Speaker 4: of a trivialization back to the office.
Speaker 2: Excuse me, yeah, yeah.
Speaker 4: Back to the office and backs of work.
Speaker 3: We're providing offices throughout the United States two thousand buildings
Speaker 3: by the end of this year, so pretty much anywhere.
Speaker 4: You want to work, you can go locally and work.
Speaker 3: This is about people not wanting workers, not wanting a
Speaker 3: waste two hours a day getting to and from an
Speaker 3: inconvenient office. This is about technology allowing sort of platform
Speaker 3: work to be a reality. So look, we're in the
Speaker 3: office business So we have one point four million offices
Speaker 3: worldwide today, and so we're very much in the office business.
Speaker 3: But we're in the office business near where people live
Speaker 3: and in New York City. You know, this isn't about
Speaker 3: you know, the only work he's done in the United
Speaker 3: States in New York City or Chicago. It's done all
Speaker 3: over the country. So this is about allowing people to
Speaker 3: work productively. They can do it at home, but it's
Speaker 3: quite difficult for most jobs, some jobs to home. A
Speaker 3: lot of people need an office to be productive, and
Speaker 3: it just doesn't have to be miles away.
Speaker 4: That's all.
Speaker 1: For a period of time after the pandemic, when you
Speaker 1: thought about the relationship between workers and managers or workers
Speaker 1: and companies, the workers had the cards or had the
Speaker 1: leverage because it was tough to find employees. That that
Speaker 1: relationship may have shifted in recent years as the labor
Speaker 1: market has softened a little bit, as that isn't as
Speaker 1: tight as it was before. Who do you view right
Speaker 1: now as having the leverage?
Speaker 3: Look, companies always have leverage because they're the ones paying
Speaker 3: the salaries, they're the ones paying the bills. So what's
Speaker 3: driving the change is it's much it's a much lower
Speaker 3: cost to support someone near where they live than to
Speaker 3: get them to come to wherever you are. So, you know, companies,
Speaker 3: this been driven by companies, not by the workers, just
Speaker 3: to be clear. So companies want to save cost in
Speaker 3: particular today, and they absolutely want flexibility with you know,
Speaker 3: you have to say, probably many of the things you're
Speaker 3: talking about.
Speaker 4: It's a volatile world.
Speaker 3: It's harder to predict what the next few years are
Speaker 3: going to look like alone trying to commit to five
Speaker 3: or ten years. Hence, so they want flexibility, they want
Speaker 3: to minimize capital investment, and that's what's driving It's not
Speaker 3: sort of this idea that somehow workers have got leverage.
Speaker 3: You know, if you ask workers, a lot of them
Speaker 3: will say, yeah, look i'd love to work near to
Speaker 3: home if i can. Some will say yeah, I'd like
Speaker 3: to work at home. But all of them want to
Speaker 3: be productive.
Speaker 4: You know.
Speaker 3: And it's not a sort of this sort of very
Speaker 3: polarized argument where it's a pull and push. It's a
Speaker 3: general push by corporations to have a much more effective,
Speaker 3: lower cost, more practical working in part for their people.
Speaker 2: So Mark, when it comes to the real estate model,
Speaker 2: the commercial the office real estate model, is it going
Speaker 2: to be then in your view from what you are
Speaker 2: seeing your vantage point, that it's more about not company
Speaker 2: x y Z building this massive headquarters and then maybe
Speaker 2: you know, satellite offices around the country. It's more about
Speaker 2: maybe having a headquarters somewhere. But then they're more likely
Speaker 2: to rent space from you. Is that increasingly what you're seeing,
Speaker 2: and so there will still be demand for office space,
Speaker 2: but you will be someone who owns more of it
Speaker 2: than maybe company XYZ.
Speaker 3: We don't own any of it, just to be clear,
Speaker 3: so don't no, we don't. We operate it for landlords.
Speaker 3: So landlords also can see the future. It's a technology
Speaker 3: distorted future where you can work from anywhere we all can.
Speaker 3: And so you know, the demand has changed, you know,
Speaker 3: that's that's the reality. So we work for building owners
Speaker 3: to convert their buildings and put them on our platform
Speaker 3: to make them available for people and companies that want
Speaker 3: to buy what they need when they need it, for
Speaker 3: the time they need it with you know, a simple
Speaker 3: you know, half a page agreement. Not there's no leases. Okay,
Speaker 3: So it's a modern it's the modern picture of real.
Speaker 2: Estate like ubrization right of office space.
Speaker 1: Almost yeah, absolutely, so you have a good picture. We
Speaker 1: only have about thirty seconds left. You have a really
Speaker 1: good picture of demand for this stuff, which I think
Speaker 1: we can use as a source of data on the economy,
Speaker 1: at least anecdotal. How would you describe demand right now?
Speaker 4: Very strong.
Speaker 3: I mean, look, we're growing. We're adding one thousand buildings
Speaker 3: a year. We expect it will be fifty percent more
Speaker 3: next year.
Speaker 4: You know.
Speaker 3: That's that's that's demand for you. And you look that
Speaker 3: revenue birth so on. That's that's that's how you can
Speaker 3: see it.
Speaker 2: Interesting stuff always always, Mark Dixon, thank you so much,
Speaker 2: CEO of International Workplace Group. By the way, there are
Speaker 2: ADRs that trade in the US. It's a three billion
Speaker 2: dollar market cap. They're up about forty five percent year
Speaker 2: to date. You take a look at the stock that
Speaker 2: trades on the London stock has changed up about thirty
Speaker 2: five percent year to date. So investors definitely interested.