WEBVTT - Supply Chain Disruptions, Design for A Radically Changing World 0:00:00.120 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:07.000 --> 0:00:10.319 You're listening to Bloomberg Business Week with Carol Messer and 0:00:10.360 --> 0:00:12.760 Tim Steneveek on Bloomberg Radio. 0:00:12.960 --> 0:00:14.560 Hey, Carol, I don't know if you heard about this, 0:00:14.680 --> 0:00:18.360 but on Sunday, as it approached the narrow bob Elman 0:00:18.440 --> 0:00:21.040 deb straight off Yemen's coast, a commercial ship in the 0:00:21.079 --> 0:00:24.759 Red Sea changed its destination signal. It's something widely available 0:00:24.760 --> 0:00:27.160 on the Internet for most vessels, so anyone can see it. 0:00:27.160 --> 0:00:31.120 It changed it from an Iraqi port to all crew Muslims. 0:00:31.120 --> 0:00:32.280 I saw this. This is pretty cool. 0:00:32.360 --> 0:00:32.560 Yeah. 0:00:32.600 --> 0:00:33.880 The changed it for a good reason. 0:00:34.040 --> 0:00:36.080 Yeah, this is the whole point of changing this was 0:00:36.120 --> 0:00:38.600 a message to the houthy militants of Yemen who say 0:00:38.800 --> 0:00:41.479 they're targeting ships linked to Israel and to its allies 0:00:41.479 --> 0:00:45.080 to pressure them over the war in Gaza. So the 0:00:45.120 --> 0:00:48.880 idea was, okay, well, our ship will be safe if 0:00:48.880 --> 0:00:51.360 we change our call signal and say, okay, we're all 0:00:51.440 --> 0:00:52.760 Muslims here, so don't attack us. 0:00:52.880 --> 0:00:53.080 Yeah. 0:00:53.080 --> 0:00:55.760 I think it's incredible, all right, And then you know, 0:00:55.800 --> 0:00:57.920 you've got a lot of stuff going on in terms 0:00:57.960 --> 0:01:01.200 of concerns about Red Sea not getting around it. If 0:01:01.240 --> 0:01:03.680 you have to go a different route, the extra costs, 0:01:03.680 --> 0:01:05.920 and then there's also the drought in the Panama Canal. 0:01:05.959 --> 0:01:08.720 Needless to say, global shipping has been upended in recent 0:01:08.760 --> 0:01:09.560 months in a big way. 0:01:09.840 --> 0:01:11.720 Well that's why we invited David Dyker on the show. 0:01:11.760 --> 0:01:14.520 He's Associate partner and Shipping Practice co leader at Mackenzie 0:01:14.520 --> 0:01:17.440 and Company. He joins us from Summit, New Jersey. David, 0:01:17.440 --> 0:01:20.280 good to have you with us this afternoon. You guys 0:01:20.280 --> 0:01:23.880 crunch the numbers at Mackenzie. What's a bigger deal here? 0:01:24.160 --> 0:01:26.720 Is it the disruptions in the Red Sea or is 0:01:26.760 --> 0:01:28.759 it what's happening in the Panama Canal which is having 0:01:28.760 --> 0:01:31.080 a bigger global economic impact. 0:01:32.800 --> 0:01:35.000 Well, first of all, it's great to be on the show. 0:01:35.040 --> 0:01:38.160 I've been a long time fan, and it's great to 0:01:38.200 --> 0:01:41.160 be speaking with both of you. In response to your 0:01:41.240 --> 0:01:45.000 question here, the answer is you're not gonna like it. 0:01:45.000 --> 0:01:47.559 But the answer is both right. You can't look at 0:01:47.600 --> 0:01:49.559 any of these in isolation. 0:01:50.160 --> 0:01:50.320 Right. 0:01:50.400 --> 0:01:52.560 So when we were first of you looking at the 0:01:52.560 --> 0:01:55.120 Panama Canal back in October, when they had started to 0:01:55.160 --> 0:01:58.080 announce some of the restrictions, you know, we had started 0:01:58.080 --> 0:01:59.840 to look at the numbers. Then but then when you 0:02:00.040 --> 0:02:02.720 start to compound this with the situation in the Red Sea, 0:02:03.040 --> 0:02:06.720 it obviously changes everything. So no ship or no investor 0:02:06.760 --> 0:02:08.720 that has approached just as looking at either of these 0:02:08.720 --> 0:02:10.120 in isolation, all right. 0:02:10.120 --> 0:02:12.280 So all right, they're all looking at it together. That 0:02:12.360 --> 0:02:14.600 makes sense, right, If you're running a company or an organization, 0:02:14.680 --> 0:02:16.240 you kind of need to keep your eyes on it. 0:02:16.800 --> 0:02:19.400 Having said that, and I'm assuming some of your customers 0:02:19.480 --> 0:02:21.440 or your clients are reaching out to you. What are 0:02:21.440 --> 0:02:23.600 you saying, I mean, do they need to start making 0:02:23.639 --> 0:02:26.639 some changes longer term? Or I mean, how do you 0:02:26.680 --> 0:02:30.120 assess the situation like this in an environment David where 0:02:30.120 --> 0:02:31.639 I think it's safe to say over the last couple 0:02:31.680 --> 0:02:34.680 of years, we've talked about the pushback on globalization. We're 0:02:34.720 --> 0:02:37.480 near shre and like, how how are you advising some 0:02:37.560 --> 0:02:40.760 of the folks in your world, the clients in your world. 0:02:42.000 --> 0:02:44.680 Yeah, you know, the first question I usually get from 0:02:44.720 --> 0:02:46.640 a lot of investors is, David, when are we going 0:02:46.720 --> 0:02:47.760 to have a normal year? 0:02:48.520 --> 0:02:49.240 Give up on it? 0:02:50.280 --> 0:02:52.839 And the answer is, I don't think that we will 0:02:52.880 --> 0:02:55.440 ever have a normal year. In shipping, you always have 0:02:55.480 --> 0:02:58.120 to remind everybody just as technology and you know, the 0:02:58.160 --> 0:03:01.120 products that we manufacture are getting more and more sophisticated. 0:03:01.360 --> 0:03:04.960 The supply chains and the logistics that support them and 0:03:05.040 --> 0:03:09.919 provide those manufacturing components are getting even more sophisticated. So 0:03:10.000 --> 0:03:12.520 the number one piece of guidance that we give to 0:03:12.520 --> 0:03:14.960 to investors that approach us, to our clients that are 0:03:14.960 --> 0:03:19.160 manufacturing these goods is this is business as usual and 0:03:19.200 --> 0:03:21.520 will continue to be business as usual for the future. 0:03:22.320 --> 0:03:25.240 Just supply chain disruptions that last a month or longer 0:03:25.600 --> 0:03:28.880 are now becoming more and more frequent, and on average 0:03:28.880 --> 0:03:30.880 are happening every three point seven years. 0:03:32.080 --> 0:03:34.960 But how much are people taking that advice and actually saying, Okay, 0:03:35.040 --> 0:03:37.400 I'm going to build a plant in my backyard or 0:03:37.440 --> 0:03:39.920 I'm going to make sure that I've got the ability 0:03:39.920 --> 0:03:42.120 to access either my supply chain make sure that my 0:03:42.160 --> 0:03:45.920 suppliers are more locally based. How much of that is 0:03:45.960 --> 0:03:48.960 actually resulting in action that changes how we've been doing 0:03:49.040 --> 0:03:49.920 things for decades. 0:03:51.680 --> 0:03:53.400 Quite a lot of it. And so there's two main 0:03:53.520 --> 0:03:55.160 things that we see a lot of our clients doing. 0:03:55.520 --> 0:03:57.880 The first is that they are elevating the importance of 0:03:57.920 --> 0:04:01.920 their supply chain organizations. That means not only building the 0:04:01.960 --> 0:04:05.680 capabilities and the in house technologies, and a recent pal 0:04:06.040 --> 0:04:09.160 just showed with our supply chain executives across a lot 0:04:09.200 --> 0:04:11.480 of our client base is that ninety eight percent of 0:04:11.520 --> 0:04:15.400 them plan to increase their spend and supply chain related 0:04:15.440 --> 0:04:18.440 technologies over the next five years, which is very significant 0:04:18.480 --> 0:04:21.800 compared to pre pandemic. The second thing that they're doing 0:04:21.880 --> 0:04:24.280 is just as you were alluding to, is they are 0:04:24.440 --> 0:04:27.040 starting to look at a longer term supply chain plants 0:04:27.040 --> 0:04:29.400 and starting to think through, Okay, what are some of 0:04:29.440 --> 0:04:31.960 the strategies I need to have in place for events 0:04:31.960 --> 0:04:36.680 that I can't necessarily foresee. That means omni shoring or 0:04:36.760 --> 0:04:39.960 potentially looking at potential different routes that they can take 0:04:40.000 --> 0:04:43.280 to get to some of their manufacturing locations. Now everything's on. 0:04:43.240 --> 0:04:47.240 The table, So David does it. I'm wondering, like, you know, 0:04:47.320 --> 0:04:50.720 obviously understand the economic implications of this, but I'm thinking about, 0:04:50.920 --> 0:04:54.840 you know, other geopolitical associations or implications of this. I'm 0:04:54.839 --> 0:04:57.400 thinking about, you know, there are certain things that we 0:04:57.480 --> 0:05:00.760 can actually build closer to home, but there are certain 0:05:00.760 --> 0:05:04.960 things like commodities that just can't be things like cocoa 0:05:04.960 --> 0:05:08.080 for example, or coffee for example. Things that you know, 0:05:08.240 --> 0:05:10.880 we rely on to be shipped from all over the world. Here, 0:05:11.200 --> 0:05:14.360 what ends up happening to our economy? I mean, do 0:05:14.400 --> 0:05:16.120 we all become more insulated. 0:05:18.920 --> 0:05:21.880 The pushare is to become more and more resilient. And 0:05:21.920 --> 0:05:23.600 if we were to put this back and focus of 0:05:23.640 --> 0:05:26.920 the Panama Canal and some of the commodities that you're 0:05:26.960 --> 0:05:29.640 mentioning there are going to be dramatically affected. You if 0:05:29.680 --> 0:05:33.080 you look at the Panama Canal, those economies that bear 0:05:33.120 --> 0:05:35.640 the brunt of this are those that are closest to 0:05:35.720 --> 0:05:38.560 the canal and a lot of those a lot of 0:05:38.600 --> 0:05:42.360 those economies are very tied to perishable goods like bananas 0:05:42.480 --> 0:05:45.600 or other refrigerated cargoes there. And the answer is those 0:05:45.640 --> 0:05:49.040 things cannot just disappear. We have to reinforce and make 0:05:49.080 --> 0:05:53.200 those supply chains more resilient. And where we can't, ultimately 0:05:53.279 --> 0:05:55.760 you'll see these companies have to increase the costs that 0:05:55.800 --> 0:05:59.240 they ultimately pass on to customers because it's just become 0:05:59.279 --> 0:06:01.400 more expensive operate those supply chains. 0:06:01.920 --> 0:06:03.960 Yeah, it's interesting and at a time when we know 0:06:04.000 --> 0:06:06.720 that certainly the US Central Bank, you know, we had 0:06:06.760 --> 0:06:10.440 another hot inflation print and it's just you know, struggling 0:06:10.440 --> 0:06:13.960 to make sure that prices no longer are rising at 0:06:13.960 --> 0:06:15.920 the levels we've They've come down a lot in the 0:06:15.960 --> 0:06:18.200 last twelve months, but you do wonder about other stress 0:06:18.240 --> 0:06:22.200 points that either put a floor in prices. As we 0:06:22.240 --> 0:06:24.920 sit right now. Having said that, one thing I think about, 0:06:25.040 --> 0:06:27.400 David is I've been to the Panama Canal. I've seen it. 0:06:27.400 --> 0:06:29.520 It kind of blew my mind having seen it in 0:06:29.600 --> 0:06:31.279 video and so on and so forth, Like you just 0:06:31.360 --> 0:06:34.360 realized the importance this is in terms of trade. Sue 0:06:34.360 --> 0:06:37.440 has obviously very important, the Red Sea too, the Panama Canal. 0:06:37.640 --> 0:06:40.040 Are you starting to think about a world where maybe 0:06:40.040 --> 0:06:42.520 we don't have access to the Panama Canal because of 0:06:42.520 --> 0:06:43.440 climate change? 0:06:45.720 --> 0:06:51.120 Now, in conversations that I've had with major logistics providers, 0:06:51.880 --> 0:06:54.359 investors and shippers that are that are tied to the 0:06:54.360 --> 0:06:57.719 canal for economic reasons, you know the canal is still 0:06:57.880 --> 0:07:01.200 a very critical part to all of those chains. Uh. 0:07:01.480 --> 0:07:03.520 And you know, the canal can tell you itself that 0:07:03.560 --> 0:07:06.520 they're they're actively looking at various means where they're going 0:07:06.520 --> 0:07:08.800 to ensure that the canal stays open. It is too 0:07:09.040 --> 0:07:14.120 critical of an international trade pathway for for us not 0:07:14.200 --> 0:07:15.280 to continue to maintain. 0:07:15.800 --> 0:07:19.320 We talked Panama Canal, we talked Red csu As Canal. 0:07:19.840 --> 0:07:22.240 What is the other geographical area that we need to 0:07:22.280 --> 0:07:25.520 have our attention to that we're not necessarily talking about, David. 0:07:27.280 --> 0:07:29.720 If I could answer that question, I don't think I'd 0:07:29.720 --> 0:07:30.560 be sitting in this seat. 0:07:30.600 --> 0:07:32.440 But is there anything on your radar right now that 0:07:32.560 --> 0:07:34.320 you know you're starting to see bubble lot that is 0:07:34.360 --> 0:07:36.760 an area of concern, especially with with climate change. 0:07:39.120 --> 0:07:42.680 You know, again, I go back to my original point 0:07:42.680 --> 0:07:46.040 here with these are today's supply chains being so sophisticated 0:07:46.160 --> 0:07:48.720 and so so tight, or you know, a lot of 0:07:48.760 --> 0:07:50.920 shippers are still despite you know, what we went through 0:07:50.960 --> 0:07:52.880 in COVID still want to go back to just in 0:07:52.920 --> 0:07:56.200 time inventories. You know, it is any sort of disruption 0:07:56.640 --> 0:07:59.040 that could that could come to the forefront here, So 0:07:59.200 --> 0:08:01.360 I don't want to spec it could be, but I 0:08:01.360 --> 0:08:04.640 can tell you it could pop up in any place 0:08:04.680 --> 0:08:05.240 around the world. 0:08:05.360 --> 0:08:05.640 David. 0:08:05.640 --> 0:08:07.600 It sounds like though we as consumers have to get 0:08:07.680 --> 0:08:09.840 used to something that shocked us during the pandemic of 0:08:09.880 --> 0:08:12.679 empty shelves, and I feel like I increasingly walk into 0:08:12.720 --> 0:08:17.080 places and shelves are empty. And maybe that's because of 0:08:17.120 --> 0:08:19.360 the just in time inventory. Nobody wants to be stuck 0:08:19.400 --> 0:08:21.800 with excess inventory? Is that a fair assessment? And just 0:08:21.880 --> 0:08:25.160 got about twenty seconds here. Sorry. 0:08:26.600 --> 0:08:30.080 I still believe that the sophistication of our logistics providers 0:08:30.120 --> 0:08:32.240 and the shippers out there will ensure that we won't 0:08:32.280 --> 0:08:35.920 have any stock outs here. So we'll see. 0:08:36.160 --> 0:08:38.800 Yeah, time will tell, right, David, great to check in 0:08:38.880 --> 0:08:40.559 with you. Nice to be talking with someone who's a 0:08:40.600 --> 0:08:43.440 fan of the show, so thank you for that. David Dyker. 0:08:43.480 --> 0:08:45.920 He's Associate partner and shipping practice co leader of at 0:08:45.960 --> 0:08:49.480 mackenzie and Company. Joining us on Zoom from Summit, New Jersey. 0:08:49.520 --> 0:08:51.600 But I do think about supply chains, right, we continue 0:08:51.600 --> 0:08:54.160 to be talking about them post pandemic. How many years 0:08:54.160 --> 0:08:55.679 are we out here? In four years? 0:08:56.160 --> 0:08:59.640 But it's not just pandemic, it's pandemic, climate change, politics, 0:08:59.679 --> 0:09:00.960 it's it's wild. 0:09:00.760 --> 0:09:02.760 Yeah, serious issues. All right, folks, don't go anywhere. I 0:09:02.760 --> 0:09:04.720 got a special treat coming up in just a moment 0:09:04.800 --> 0:09:11.480 right here on Bloomberg Business Week. 0:09:12.559 --> 0:09:16.160 My whole world around domans that one. 0:09:16.559 --> 0:09:19.120 Okay, bear with me here, take a moment and think 0:09:19.160 --> 0:09:21.440 about your life, think about your daily routine and the 0:09:21.480 --> 0:09:24.600 built environment that you interact with, your office, your workspace, 0:09:24.679 --> 0:09:27.440 the roads, the parks, public transit, all of the things 0:09:27.440 --> 0:09:29.960 that are around you, and equally important, what you find 0:09:30.000 --> 0:09:32.000 on the other side of all the doorways that you 0:09:32.040 --> 0:09:34.680 walk through. Maybe it's just me, but these things have 0:09:34.720 --> 0:09:38.640 a huge effect on my life and my wellbeing. So 0:09:38.679 --> 0:09:40.840 we're really interested to talk with our next guest because 0:09:40.840 --> 0:09:44.480 this is their world. Andy Cohen and Diane Hoskins are 0:09:44.520 --> 0:09:47.559 the co CEOs of the privately held global architecture design 0:09:47.600 --> 0:09:51.239 and planning from Gensler. Gensler's got more than fifty locations 0:09:51.240 --> 0:09:54.000 and six thousand employees around the world in the America's 0:09:54.040 --> 0:09:56.440 euro Up, Greater China, Asia, Pacific, and the Middle East. 0:09:56.720 --> 0:09:58.680 They do more than two billion dollars a year in revenue, 0:09:58.679 --> 0:10:01.480 and they count eighty percent of the top fifty Fortune 0:10:01.480 --> 0:10:04.800 five hundred companies as clients. Needless to say, they got 0:10:04.800 --> 0:10:06.880 a good idea about what's going on around the world. 0:10:06.920 --> 0:10:08.560 They're also the co authors of a brand new book 0:10:08.600 --> 0:10:12.920 out today, designed for a radically changing world. Andy, Diane, welcome, 0:10:13.000 --> 0:10:15.800 good to have you here in the Bloomberg Interactive Brokers Studios. 0:10:15.920 --> 0:10:17.640 We're going to get to the book in just a bit, 0:10:17.640 --> 0:10:19.360 but we got a good chunk of time with you guys. 0:10:19.760 --> 0:10:22.840 You have an amazing view on the global economy. Diane, 0:10:23.480 --> 0:10:25.320 just talk to me about how business is right now, 0:10:25.520 --> 0:10:26.400 what you're seeing. 0:10:26.960 --> 0:10:30.839 Hey, Tim, Carol, it's so good to be here. Wow, 0:10:31.320 --> 0:10:35.520 we're seeing that. You know, again, things are moving quickly 0:10:35.559 --> 0:10:38.080 and changing from what we might have seen five years ago, 0:10:38.600 --> 0:10:43.080 and certainly during COVID there's you know, we're in a 0:10:43.160 --> 0:10:49.280 world where you know, new cities are being created I 0:10:49.320 --> 0:10:51.960 won't say overnight, but you know, again at such a 0:10:52.080 --> 0:10:56.680 rapid pace. You know, we were just in India and 0:10:57.000 --> 0:10:59.760 you know, to see the kind of energy and excitement 0:10:59.760 --> 0:11:03.440 goinging on and the transformation that we're part of as 0:11:03.480 --> 0:11:06.760 a design firm in Bangalore. We were just in Mexico 0:11:06.840 --> 0:11:09.920 City hearing a lot about the near shoring and the 0:11:10.559 --> 0:11:14.600 energy that that's bringing to the economy there and obviously, 0:11:15.200 --> 0:11:18.560 excuse me, opportunities in the built environment as well. So 0:11:18.840 --> 0:11:22.160 you know, again, as a global firm, we're part of 0:11:22.200 --> 0:11:26.240 this transformation that is literally happening, you know, around the world. 0:11:26.280 --> 0:11:30.080 We were at COP twenty eight and in Dubai and 0:11:30.200 --> 0:11:33.360 you know, again all of what's happening in the Middle East. So, 0:11:33.720 --> 0:11:37.400 you know the United States, there's amazing things happening that 0:11:37.440 --> 0:11:40.800 hopefully we'll talk about as our cities are you know, 0:11:41.160 --> 0:11:45.000 finding their path. But we're very bullish, well. 0:11:45.000 --> 0:11:47.120 Safe to say we have a sensitivity about cities too, 0:11:47.160 --> 0:11:48.880 and we think it's really important that if you have 0:11:48.920 --> 0:11:52.680 healthy cities, you have healthy countries and healthy policies. Like 0:11:52.720 --> 0:11:54.480 it kind of starts at that level, but I want 0:11:54.520 --> 0:11:56.720 to dig a little bit deeper, Andy, because you guys 0:11:56.760 --> 0:12:01.560 do have this incredible global perspective. Any so that there 0:12:01.600 --> 0:12:06.040 are companies, are you know, cities slowing down on projects 0:12:06.280 --> 0:12:07.720 because of uncertainty about. 0:12:07.559 --> 0:12:11.080 What's to come again, like Diane said, it's where of 0:12:11.120 --> 0:12:13.640 this global perspective. We worked in over one hundred countries 0:12:13.720 --> 0:12:17.199 last year. You know, we're seeing the US right now 0:12:17.559 --> 0:12:20.080 in definitely in the work sector, in the office sector 0:12:20.160 --> 0:12:23.200 definitely slowing down. We're in four sectors in our firm, 0:12:23.280 --> 0:12:26.080 we have work, lifestyle, what we call cities, and health 0:12:26.120 --> 0:12:29.719 and wellness. We're seeing our work sector definitely being hit 0:12:29.800 --> 0:12:31.880 right now with the slowdown in office. Although we're doing 0:12:31.920 --> 0:12:36.120 a ton of office to REZI residential conversions. 0:12:35.720 --> 0:12:37.800 Right now, are you really a ton of those right 0:12:39.040 --> 0:12:40.840 like old office buildings. 0:12:40.920 --> 0:12:44.480 Older office buildings. What we're seeing is because office buildings 0:12:44.559 --> 0:12:48.600 right now they're only fifty percent occupied. We're seeing this 0:12:48.760 --> 0:12:51.880 unbelievable flight to quality that's going on right now where 0:12:51.920 --> 0:12:55.280 tenants really only want to be in highly amenditized quality 0:12:55.320 --> 0:12:58.240 buildings that are brand new or newer, and the older 0:12:58.280 --> 0:13:01.560 building stock millions upon millions of square feet what we 0:13:01.640 --> 0:13:05.959 call B and C product B and C buildings are 0:13:06.080 --> 0:13:10.440 really really problematic. So we have done we created an 0:13:10.480 --> 0:13:14.760 algorithm recently that we're able to study entire cities or 0:13:15.040 --> 0:13:19.120 whole portfolios of buildings and analyze them quickly to see 0:13:19.320 --> 0:13:24.280 which buildings can be converted from office to REZI and 0:13:24.400 --> 0:13:26.760 about twenty five percent of the building stock in the 0:13:26.840 --> 0:13:29.719 United States and around the globe can be converted. 0:13:30.880 --> 0:13:34.599 Diana Howe, I mean we've heard for years since the 0:13:34.600 --> 0:13:38.320 pandemic that oh, it's just too expensive to convert on 0:13:38.360 --> 0:13:41.920 a large scale old office buildings into housing. I mean, 0:13:42.000 --> 0:13:44.560 think about it from the perspective of the plumbing, and 0:13:44.640 --> 0:13:48.520 there's some lack of windows. I mean, how do you 0:13:48.559 --> 0:13:50.760 do this efficiently? Is it something that is realistic to 0:13:50.840 --> 0:13:52.320 do to offices that aren't used? 0:13:52.880 --> 0:13:55.440 Yeah, as Andy said, we've created a tool where we 0:13:55.480 --> 0:13:57.959 can answer that question really quickly. 0:13:58.080 --> 0:13:59.679 So some buildings, it works in some buildings. 0:13:59.760 --> 0:14:00.840 Yeah, what's in that tool? 0:14:01.040 --> 0:14:01.240 Yeah? 0:14:01.280 --> 0:14:04.959 What is it? No, it's you know, we've put together, 0:14:05.440 --> 0:14:08.920 basically a way of bringing all the analytics that would 0:14:08.960 --> 0:14:12.080 probably take you know, a pretty extended period of time 0:14:12.240 --> 0:14:16.440 to study, into a very concise set of metrics that 0:14:16.679 --> 0:14:21.720 predict the viability of an office building becoming residential. So 0:14:22.040 --> 0:14:25.560 the window to the core, you know that dimension. Obviously, 0:14:25.920 --> 0:14:29.640 super deep apartments are not going to work. You know, 0:14:29.760 --> 0:14:32.920 the Florida floor height again, you know, there are ideal 0:14:32.960 --> 0:14:36.240 Florida floor heights for residential that are different in many 0:14:36.280 --> 0:14:40.440 cases than office. The loading dock, by the way, makes 0:14:40.480 --> 0:14:43.120 a huge difference. What's going on with you know, the 0:14:43.160 --> 0:14:46.720 column base. So all of this basically we do a 0:14:46.760 --> 0:14:50.440 scoring and literally, if it's eighty or above, it's viable. 0:14:50.480 --> 0:14:52.440 If it's below, maybe not so much. 0:14:52.480 --> 0:14:55.880 And you said that algorithm says twenty five percent can 0:14:55.880 --> 0:14:58.160 be reworked, which makes me think that other seventy five 0:14:58.200 --> 0:15:00.520 percent do you think ultimately it's just have to be 0:15:00.880 --> 0:15:03.600 either torn down or done away with. 0:15:04.160 --> 0:15:06.640 Well, we're doing a lot of adaptive reuses right now 0:15:06.640 --> 0:15:09.560 to other types of uses. But definitely the reason why 0:15:09.560 --> 0:15:13.280 we're studying residential is such as short as a residential 0:15:13.680 --> 0:15:16.360 and so we need more residential and this is a 0:15:16.480 --> 0:15:19.560 sustainable way of doing it. Instead of ripping a building down, 0:15:19.800 --> 0:15:22.560 we can reuse the building, which is so much better 0:15:22.600 --> 0:15:25.080 for the environment. I should also add, Diana, I just 0:15:25.120 --> 0:15:27.640 went this morning. We saw a project called a Pearl 0:15:27.640 --> 0:15:31.400 House and it's here in Lower Manhattan. It's the first 0:15:31.680 --> 0:15:36.520 unbelievable successful conversion from office to REZI and it was 0:15:36.520 --> 0:15:39.160 a building built in nineteen seventy and we were able 0:15:39.160 --> 0:15:41.400 to literally turn it inside out and turn it from 0:15:41.440 --> 0:15:44.720 a standard office building into residential and we think it's 0:15:44.760 --> 0:15:46.280 going to be a home run here in New York. 0:15:47.240 --> 0:15:50.160 It's really cool to hear about this because again again 0:15:50.280 --> 0:15:52.360 it's like we've heard about we've been talking about this 0:15:52.360 --> 0:15:54.720 for years, and it's like it's good to finally see 0:15:54.720 --> 0:15:59.880 this happening. So, Diane, how susceptible is Gensler to blips 0:15:59.880 --> 0:16:02.000 in the economy? Because the reason, the reason I ask 0:16:02.040 --> 0:16:03.760 it's and I don't think it's an obvious answer, is 0:16:03.760 --> 0:16:06.080 because yes, a big portion of your revenue does come 0:16:06.120 --> 0:16:10.160 from offices, but also a lot comes from municipal municipalities. 0:16:10.200 --> 0:16:16.320 You do airports, you do courthouse renovations, parliament. So so 0:16:16.320 --> 0:16:18.480 how much of that is dependent on you know, fluctuations 0:16:18.520 --> 0:16:19.600 within the global economy. 0:16:20.120 --> 0:16:22.680 Yeah, you know, over the last twenty years where we've 0:16:22.720 --> 0:16:27.800 been co CEOs, we've really focused on diversification and really 0:16:27.880 --> 0:16:30.560 looking at all of the kind of a three sixty 0:16:31.200 --> 0:16:33.840 from as Andy said, sort of this work sector which 0:16:33.880 --> 0:16:36.240 we've been talking about, that's the office buildings and then 0:16:36.280 --> 0:16:39.080 the spaces inside those buildings. But even that is like 0:16:39.200 --> 0:16:41.720 you know, you've got tech, and you've got financial services, 0:16:41.720 --> 0:16:45.800 and you know, professional services. But you know, right now 0:16:45.920 --> 0:16:49.720 one of our fastest growing practice areas is actually aviation. 0:16:50.760 --> 0:16:53.880 And you know, you look at the stimulus, the you know, 0:16:53.920 --> 0:16:57.360 infrastructure bill that got passed not that long ago. You're 0:16:57.400 --> 0:17:01.320 starting to see amazing project going on all over the 0:17:01.440 --> 0:17:05.639 US in terms of these you know, much needed new terminals. 0:17:05.640 --> 0:17:08.400 We all go, you know, overseas and see great terminals, 0:17:08.400 --> 0:17:11.879 but we're starting to see some amazing opportunities here in 0:17:11.920 --> 0:17:15.520 the US. So you know, again that diversification, whether it's 0:17:15.680 --> 0:17:19.960 another massive growth area for US is sports stadiums and 0:17:20.320 --> 0:17:23.200 you know again we all just saw the Super Bowl, 0:17:23.280 --> 0:17:26.800 but you know it's so important in our communities to 0:17:27.320 --> 0:17:30.199 you know, entertainment in sports as well, so you know, 0:17:30.520 --> 0:17:34.440 the and let's say hospitality. I mean again, since COVID, 0:17:34.680 --> 0:17:37.639 we all know, the hospitality sector has been just on 0:17:37.680 --> 0:17:41.000 a rocket and that reflects also back into the work 0:17:41.040 --> 0:17:41.640 that we're doing. 0:17:42.200 --> 0:17:43.679 Let's get back to our guest because still with us 0:17:43.680 --> 0:17:46.040 as Andy Cohen and Diane Hoskins, co CEOs of the 0:17:46.040 --> 0:17:49.040 privately held global architecture design and planning firm Against there. 0:17:49.200 --> 0:17:51.240 They've got a new book out. It's called Design for 0:17:51.240 --> 0:17:53.760 a Radically Changing World. Tim and I throughout the day 0:17:53.760 --> 0:17:55.600 have been just kind of having some fun even with 0:17:55.640 --> 0:17:57.840 the titles. I want to go right to one called 0:17:57.880 --> 0:18:01.280 social and racial justice because I think about how we 0:18:01.400 --> 0:18:06.120 have done in general housing for decades and kind of 0:18:06.200 --> 0:18:09.200 separating lower income and then developers maybe they throw a 0:18:09.240 --> 0:18:11.679 few units like how do we do and Diane, let 0:18:11.680 --> 0:18:13.000 me start with you, how do we do this better? 0:18:14.200 --> 0:18:18.800 Yeah? You know, it's about equity, right, for so many years, 0:18:18.960 --> 0:18:21.440 you know, and in so many of our cities there 0:18:21.440 --> 0:18:25.440 are communities that just haven't had the investment. And so 0:18:25.680 --> 0:18:29.359 you know, at Gensler. We're really being mindful about seeking 0:18:29.440 --> 0:18:34.800 out opportunities to work on projects that are helping to 0:18:34.880 --> 0:18:40.600 create more livable streets, more green space, you know, helping 0:18:40.680 --> 0:18:45.640 to create schools that are you know, uh, exciting children 0:18:45.760 --> 0:18:49.040 to want to learn and grow, but. 0:18:48.440 --> 0:18:50.920 For not just one member of the social strata. 0:18:50.960 --> 0:18:54.639 Correct, yeah, exactly, for every for everyone, for everyone, And 0:18:54.680 --> 0:18:56.880 it's it is about equity and how do we bring 0:18:57.000 --> 0:18:58.040 that through design? 0:18:59.600 --> 0:19:03.960 And you and Diane argue that design can be a 0:19:04.000 --> 0:19:09.919 more powerful tool than policy when it comes to changing 0:19:09.960 --> 0:19:10.840 cities for the better. 0:19:11.520 --> 0:19:16.199 Explain, well, sure, I think first let's talk about the context. 0:19:16.359 --> 0:19:19.240 For the first time in human history, more people live 0:19:19.280 --> 0:19:21.960 in cities than not fifty five percent of the world's 0:19:21.960 --> 0:19:25.639 population lives in cities, and by twenty fifty seventy percent 0:19:25.640 --> 0:19:29.399 of the world's populations lives in cities. So the design 0:19:29.440 --> 0:19:31.439 of cities are obviously going to be really important for 0:19:31.480 --> 0:19:35.280 the global population. And we believe and this has to 0:19:35.320 --> 0:19:38.840 do with policies moving forward. We believe in the philosophy 0:19:38.960 --> 0:19:42.600 and through our research of a twenty minute city and 0:19:42.640 --> 0:19:45.480 the twenty minute city, and we learned this through COVID, 0:19:46.119 --> 0:19:48.960 is that everything is walkable everything you need in life. 0:19:49.119 --> 0:19:55.000 Every amenity that you need in life is walkable grocery stores, restaurants, retail, healthcare. 0:19:55.600 --> 0:19:59.000 Education is older than a walkable district. Now in a 0:19:59.040 --> 0:20:01.320 small city that would be twenty minutes. In a city 0:20:01.480 --> 0:20:04.720 like New York, you might have you have multiple twenty 0:20:04.760 --> 0:20:08.840 minute cities. But this philosophy of acxis and amenities, even 0:20:08.880 --> 0:20:12.520 having to do with racial justice, is the idea that 0:20:12.600 --> 0:20:15.760 you have these amenities that your fingertips and about that 0:20:15.800 --> 0:20:18.160 design can make a difference in these in our world. 0:20:18.240 --> 0:20:20.280 How do you make sure it's affordable amenities that are 0:20:20.320 --> 0:20:22.960 within everybody's reach, because that maybe is not always I 0:20:22.960 --> 0:20:26.959