Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. I'm Jason
Speaker 1: Kelly and I'm Carol Masser. Welcome to the Bloomberg Business
Speaker 1: Week Extra. It's our weekly podcast bring you an in
Speaker 1: depth interview you will not hear anywhere else. Well, this
Speaker 1: week we caught up with Mark Ein. He's the chairman
Speaker 1: of Castle Systems. You may have heard of that company
Speaker 1: in part because they provide managed services for buildings across
Speaker 1: the country and across the world. You might also have
Speaker 1: heard of him because he's a big player in Washington.
Speaker 1: He's been working there for a long time. He's a philanthropist,
Speaker 1: a big time investor, and also deeply involved in the
Speaker 1: world of sports, especially the world of tennis. Check it out.
Speaker 1: Every day you're turning on the TV or reading uh
Speaker 1: people's opinions. Everyone's trying to figure out how do we
Speaker 1: get back to work but do it safely? And um
Speaker 1: Castle has been the leader in providing managed office security
Speaker 1: for fifty years and we didn't see anyone really stepping
Speaker 1: in trying to think about how do you build a
Speaker 1: system to get people back to the office in a
Speaker 1: safe way. And so we've come up with the framework
Speaker 1: that we think is a really comprehensive way that leverages
Speaker 1: a lot of existing technologies. You don't invent anything, and
Speaker 1: most importantly, it makes the ecosystem safe for everyone. If
Speaker 1: you think about an office building is comprised of the building,
Speaker 1: the tenants, the people that work there, and the visitors,
Speaker 1: and you've really got to make sure that you incorporate
Speaker 1: a system that addresses all of them. And that's what
Speaker 1: we've done with Castle Safe Spaces. So talk to us about,
Speaker 1: you know, Mark, how our spaces will change, particularly in
Speaker 1: the work workplace, especially as we're going to be afraid
Speaker 1: to touch things, We're going to be obsessed with washing
Speaker 1: our hands. So how do things evolve? How do things change?
Speaker 1: And I'm curious because it sounds like these will be
Speaker 1: lasting changes. Yeah, and I do think. I look, I
Speaker 1: think a lot of the things that are going to
Speaker 1: happen are things that actually have a lot of utility
Speaker 1: even past the age of corona. So I do think
Speaker 1: a lot of these will be permanent changes. But really
Speaker 1: think about it with four main things. The first is
Speaker 1: the screening in screening out process. Uh. You know, most
Speaker 1: buildings have some major cities have some kind of access
Speaker 1: control that let's you know who should be in and
Speaker 1: who should be out. Um, by integrating health data, you
Speaker 1: know who shouldn't be coming to the office at any
Speaker 1: given time. And through also integrating health data at the
Speaker 1: point that we have good testing, it also could create
Speaker 1: an easy way for people to come in who we
Speaker 1: know are safe. So it starts with screening, screen out,
Speaker 1: and then for people who you don't know in advance,
Speaker 1: you're gonna get your temperature taken. If you look overseas
Speaker 1: where they have opened up the their business is h quicker. Um,
Speaker 1: you see, temperature testing is something and stunt either was
Speaker 1: someone taking your temperature through thermal cameras. So screening in
Speaker 1: and screening out the first thing. The second thing is
Speaker 1: you mentioned is touchless. There's so many shared services in
Speaker 1: an office building. So we see if near future where
Speaker 1: doors will open automatically when presented with an access device,
Speaker 1: elevators or called from an app in your phone, doors
Speaker 1: to your office will open automatically, and in fact you
Speaker 1: may have areas that are protected with outdoors, but just
Speaker 1: alarms that will sound if you don't have the right credentials.
Speaker 1: So touch lists is a big piece of it. UH
Speaker 1: enforcing social distancing, which is something we all talk about,
Speaker 1: but making sure that you stagger arrivals, that you manage
Speaker 1: visitor uh the amount of visitors you have and when
Speaker 1: they come. And then the last peach is contact tracing.
Speaker 1: You know everyone talks about contact tracing. But if you
Speaker 1: use your access control system seven in a building and
Speaker 1: you make everyone who comes in log in and log out,
Speaker 1: which is very easy and Latin intrusive, and you use
Speaker 1: the same intendance space as you have a permanent record
Speaker 1: of who was in the building at any point in
Speaker 1: time to live in tenant spaces at any point in time,
Speaker 1: and if someone turns out that they ended up having coronavirus,
Speaker 1: you can go back and figure out who is around
Speaker 1: them at the point that they may have been sick
Speaker 1: and notify them and tell them to watch get tested
Speaker 1: and watch for symptoms. And so all the things I
Speaker 1: just described actually leverage technology that's here today and that
Speaker 1: building owners are starting to put into place. And so, Mark,
Speaker 1: where does privacy fit into all of this? I mean,
Speaker 1: are we just going to have to get used to
Speaker 1: giving up a certain amount of personal data And how
Speaker 1: do we best sort of draw that new line? Yeah,
Speaker 1: it's a great question. So, first of all, the biggest
Speaker 1: thing is that help data make it integrated into some
Speaker 1: of this security system that we're describing, and help data
Speaker 1: really needs a completely different level of security, and so
Speaker 1: that's gonna be built into uh the system so that
Speaker 1: it doesn't reside, for instance, in any companies other than
Speaker 1: your companies. Who knows to reside any in anyone else's systems? UM.
Speaker 1: But you know, look, the tradeoff always, UH is always
Speaker 1: between security and privacy. And if you look at the
Speaker 1: countries that have managed this the best, they've made that
Speaker 1: trade off and they've gone further than we will. In
Speaker 1: A big question everyone has for the United States is
Speaker 1: you know, there's there's reasonable trade offs between privacy and security,
Speaker 1: and I think if we really want to get back
Speaker 1: to work, we're gonna have to make some of those.
Speaker 1: How quickly can we make all these changes? Because you're
Speaker 1: talking about a lot of existing infrastructure, office buildings, UH
Speaker 1: and as you say, this is lasting, so how quickly
Speaker 1: can we change all of this? Well, I think that's
Speaker 1: the great thing that as we started thinking about this,
Speaker 1: a lot of the things I just mentioned to you
Speaker 1: buildings have today. It's just literally a matter of turning
Speaker 1: them on, you know, turning on seven UH, you know,
Speaker 1: using your cards, your fib or. We have an app
Speaker 1: that lets people get in use seven. Make sure your
Speaker 1: tenants use the system like that for contact tracing. UH.
Speaker 1: Touchless systems are easy too. You can quickly convert doors
Speaker 1: to electric doors so that when they're presented with the credential,
Speaker 1: they can open. A lot of the things we talk
Speaker 1: about are available today. Now there's next gen rations of
Speaker 1: things that we're working on and others are working on
Speaker 1: that will make the system even quicker, less intrusive, maybe
Speaker 1: even slightly better. But you don't need to wait for
Speaker 1: that to make these buildings actually reasonably safe for people
Speaker 1: to get back to work. So, Mark, I would love
Speaker 1: to talk to you a little more broadly about the
Speaker 1: real estate environment, because you know you've invested pretty heavily
Speaker 1: in real estate over the course of your career, both
Speaker 1: residential and commercial, and obviously all that we've been talking
Speaker 1: about really potentially has an impact on not just how
Speaker 1: commercial real estate works, but the amount of of real
Speaker 1: estate that a company needs at any given time. I
Speaker 1: feel like we get conflicting reports on we're gonna need
Speaker 1: a much less office space or we're going to need
Speaker 1: more office space, depending sometimes on who you're talking to
Speaker 1: and what business they're in. Where do you net out
Speaker 1: on this? You know, it's really it's a great question,
Speaker 1: because when this started, my mindset was everyone's like, oh,
Speaker 1: this is a new way to work, and I was like,
Speaker 1: tell them, show me one person who's happier being in
Speaker 1: all the time, and uh, and I'll believe that. Um
Speaker 1: And I look, there's a lot of silverlignings to being home,
Speaker 1: a ton of them, but I think people really have
Speaker 1: also a desire to be in the same place as
Speaker 1: their colleagues. But I will say the longer this drags on,
Speaker 1: you really start to people start to form habits that
Speaker 1: I think are going to be enduring. I don't think
Speaker 1: it means people won't go back to work, but I
Speaker 1: think I really do believe that this is stretched on
Speaker 1: that a lot of the things, the ways that people
Speaker 1: are working now are not going to be the permanent way,
Speaker 1: but they'll be incorporated into that. And yeah, that will
Speaker 1: have an impact on the amount of space. I would
Speaker 1: say less. I can't imagine a case where people are
Speaker 1: going to need more um and I think people are
Speaker 1: going to think about the office is a place to
Speaker 1: come and collaborate, but maybe more flexibility on being able
Speaker 1: to work outside of the office when they're working on
Speaker 1: things where they can do that just as well, if
Speaker 1: not better. Um. And you know the thing about markets
Speaker 1: is it only takes the small increme it will change
Speaker 1: to change the market, right, So you know, if ten
Speaker 1: or shifts, that's a gigantic change in the market. And
Speaker 1: I think I think there's a really good chance that
Speaker 1: we're going to see some of these things become permanent.
Speaker 1: So is the era of open floor office space done?
Speaker 1: I mean, I think until there's a you know, until
Speaker 1: there's a until there's a cure, either a vaccine or
Speaker 1: a treatment for this, I think that is absolutely the case.
Speaker 1: And the hope is is that that happens, it happens
Speaker 1: reasonably quickly, and that there's not another one of these
Speaker 1: behind it. I I think if we get to the
Speaker 1: point where there's a vaccine or treatment, I think people
Speaker 1: will go back to that. I don't think we're gonna
Speaker 1: all go back to being our own offices. Um. But
Speaker 1: until that comes, I think you're not going to see
Speaker 1: people working in open environments unless there's plexiglass between cubes,
Speaker 1: which is something that people are using are going to
Speaker 1: start using. So, Mark, I wonder about a place like
Speaker 1: you know, your town, Washington, d C. Where you know,
Speaker 1: you've got pretty vibrant suburbs, but you've also had a
Speaker 1: city I was fortunate enough to go to college there
Speaker 1: that really has you know, blossomed in a whole new
Speaker 1: and different way with a lot of sort of renovation
Speaker 1: and maybe some gentrification, which is a whole other debate
Speaker 1: that will have another time about things that have happened
Speaker 1: in Washington. But I do wonder, you know, as someone
Speaker 1: who is as deeply involved in that city as you are,
Speaker 1: how does it change a city like Washington against setting
Speaker 1: politics aside, but just as as sort of a physical place. Yeah,
Speaker 1: so let's let's talk about the real Washington, not but
Speaker 1: Washington that you hear about on the TV that federal government. Um,
Speaker 1: the real Washington, which is you said, has really become
Speaker 1: a really incredibly vibrant, livable city in the last ten
Speaker 1: twenty years. A lot has been built on the backs
Speaker 1: of an emergence of great restaurants, entertainment venues, um and
Speaker 1: things for people just have a high quality of life. Obviously,
Speaker 1: we've always had great these themes and and there and
Speaker 1: performing arts. UM. One of the things that I was
Speaker 1: my greatest concern is the small businesses in particularly restaurants
Speaker 1: and entertainment arenas, because that has in a city like Washington,
Speaker 1: that has happened in cities across America. UM. Those ecosystems
Speaker 1: took decades to build, and this is going to be
Speaker 1: really difficult for many, many, many of those establishments to survive. UM.
Speaker 1: Even if you get back, very few restaurants are viable
Speaker 1: on fifty percent capacity, which is what people are saying.
Speaker 1: They can't pay the rent on fifty campath, they can't
Speaker 1: pay their other expenses too, and that's the recommended guidance.
Speaker 1: And you know, these are businesses that even with p
Speaker 1: p P and other things, just don't have the capital
Speaker 1: to withstand a long period where they're out of business.
Speaker 1: And it's something that we're I'm part of a group
Speaker 1: in d See that's totally focused on this because it's
Speaker 1: such an important issue for a quality of life, for employment,
Speaker 1: for everything in our city, but in so many and
Speaker 1: I hope this is something that uh, you know, political
Speaker 1: leaders and people in government really focus on because it
Speaker 1: is the most vulnerable of the small businesses. It will
Speaker 1: be the last to come back. There is a misnomer
Speaker 1: that opening them up at less capacity or just doing
Speaker 1: delivery is is viable, and it really isn't. It's a
Speaker 1: it's a band aid at us and and I really
Speaker 1: think it's going to take a lot of focus on
Speaker 1: a good amount of resources to make sure we don't
Speaker 1: destroy decades of process of progress in cities like ours.
Speaker 1: So we need to talk sports. As Jason ted you
Speaker 1: up earlier, Um, you know you're certainly well involved in
Speaker 1: the sports world Mark as well. You are the founder
Speaker 1: and owner of the Washington Castle's franchise, and more so
Speaker 1: the sports world. We've been having a lot of conversations
Speaker 1: about that. Certainly big events, sporting events, it's a while
Speaker 1: before they come back. How do you see it and
Speaker 1: what are the conversations, the smart conversations that you're having
Speaker 1: around this. Yes, So we were in the middle of
Speaker 1: our E sports season with the Overwatch League and had
Speaker 1: gotten off to a great start with our first two
Speaker 1: weekends and there was a huge amount of enthusiasm and
Speaker 1: we had to put that on pause. The great thing
Speaker 1: about E sports is the season has continued because people
Speaker 1: can play virtually and uh, and so that's actually been
Speaker 1: a bit of a blessing. The real the big one
Speaker 1: I'm focused on is I'm now the owner of the
Speaker 1: City Open Tennis tournament, which is the fifth biggest tennis
Speaker 1: tournament in the United States. But it's actually the first
Speaker 1: now tennis event back in the world since Wimbledon has
Speaker 1: been canceled. Uh. That's on the schedule, UH. And it's
Speaker 1: the first week in March, um and we're trying to
Speaker 1: figure out if we're going to be able to play
Speaker 1: it most realistically with either no fans or a small
Speaker 1: number of fans now. And I think this is really
Speaker 1: instructive because this also precames to a number of our
Speaker 1: other businesses. On the surface, you can imagine it shouldn't
Speaker 1: be that hard to cat didn't protect you know, a
Speaker 1: hundred tennis players, male and female tennis players and their
Speaker 1: staff by the time we get to August, that should be.
Speaker 1: But I will say, when you really peel back the
Speaker 1: onion and you go layer and layer and layer in
Speaker 1: what it's going to take to make it absolutely safe,
Speaker 1: it's much more daunting than it looks at the surface.
Speaker 1: And I think That's why you see in other sports
Speaker 1: people saying we're going to be back and we're gonna
Speaker 1: go play in a neutral place, or we're going to
Speaker 1: create these bubbles, and then they get delayed and delayed
Speaker 1: because the more you dig into it, the harder it is. Now,
Speaker 1: I do believe there's answers. I believe tennis is a
Speaker 1: sport that you should be able to play. Whether we
Speaker 1: can figure it out in August, we've got another month
Speaker 1: to make. That decision is something we're working day and
Speaker 1: night on and a lot of people are working on.
Speaker 1: I would just say that, um, it's a lot harder
Speaker 1: because you really do want to make sure it's absolutely safe,
Speaker 1: and the amount of things that have to come together
Speaker 1: to create an absolutely safe environment is um is very complex,
Speaker 1: and so who I will also say that sports is
Speaker 1: critical to the psychology of our country and everyone wants
Speaker 1: to come back. You know. Yeah, No, it's it's a
Speaker 1: it's a great point. And I mean and Carol and
Speaker 1: I have had the good fortune of UH broadcasting from
Speaker 1: the US Open for the last few years, and you know,
Speaker 1: it's something we look forward to, and I know that
Speaker 1: UH City Open is is a great run up to
Speaker 1: to that. I mean, I do wonder Mark, who were
Speaker 1: you sort of taking your cues from uh in that regard,
Speaker 1: because one thing we know about tennis is um it's complicated,
Speaker 1: to say the least in terms of the governance and
Speaker 1: and all the decision making. And I know you're probably
Speaker 1: looking even beyond tennis to things like even what we
Speaker 1: saw with the UFC over the weekend and the discussions
Speaker 1: that baseball is having. How do you sort of formulate
Speaker 1: a strategy? Who are you looking to here? Yes? So
Speaker 1: the good thing about times like this is it really
Speaker 1: does bring people together. And I'll tell you the tennis world,
Speaker 1: I think is a great example that you kind of
Speaker 1: describe the traditional balkanization of the grand plans, the A
Speaker 1: t P, the w t A, the governing bodies, etcetera.
Speaker 1: But but in this time people have really come together
Speaker 1: UM to collaborate. And so we're working very closely with
Speaker 1: the A t P, the w t A, the U
Speaker 1: S t A in our city to figure out the
Speaker 1: city open. And you know, people may or may not
Speaker 1: have seen, but there's been talking about the men's and
Speaker 1: women's towards actually merging results of this would which would
Speaker 1: have a lot of benefit, and it would take a
Speaker 1: time of crisis to actually force people to think differently,
Speaker 1: and also the experience of collaborating, which they've been doing
Speaker 1: and seeing how well it can work. So um, i'd
Speaker 1: say people are working really really well together. But but
Speaker 1: but the bigger point you make, which contains everything outside
Speaker 1: of sports, and to bring back to where we were
Speaker 1: with why Castle created this framework is because it's extraordinary
Speaker 1: to me how there really is a lack of authoritative
Speaker 1: sources on any of this. And you know we've spent
Speaker 1: I mean I spent seven days a week, pretty much
Speaker 1: all day devouring every bit of information I can either
Speaker 1: read or talk to experts or participate on calls. And
Speaker 1: there is no authoritative source on any of this, and
Speaker 1: um and and and the experts can degree can disagree
Speaker 1: to a huge extent on, for instance, the accuracy of
Speaker 1: the tests. Some experts will tell you the test if
Speaker 1: they're FDA proved and the sample is good, that they
Speaker 1: are close to accurate. Other real experts will tell you
Speaker 1: publicly and some privately, that there's as much as the
Speaker 1: false negative. Right, this is an issue that I have
Speaker 1: not seen people as focused on as I would expect
Speaker 1: because it is literally extreme opinions from people who are
Speaker 1: considered the world's experts. And depending on where you come
Speaker 1: on out on that dramatically changes your projection of where
Speaker 1: the world going and how you build systems around it,
Speaker 1: because if the test is accurate, you can do one thing,
Speaker 1: and if it's not, you have to do very different things.
Speaker 1: And so yeah, again it's it's and and I'd say
Speaker 1: that's one of the extreme examples, but I'm seeing that
Speaker 1: in virtually every element of how do you bring people
Speaker 1: back to work? And that was Mark On, chairman of
Speaker 1: Castle Systems. I've got to know him a little bit
Speaker 1: over the years, Carol. He's a fascinating figure, especially in Washington.
Speaker 1: Actually owns Katherine Graham's old house there in Georgetown. It's beautiful, uh.
Speaker 1: And he's really a guy who's plugged in. I think
Speaker 1: you've got that sense from the conversation of all these
Speaker 1: different things that he's playing in. And we also got
Speaker 1: a sense, Jason, of kind of what the future office
Speaker 1: looks like. And he said a lot of systems actually
Speaker 1: technology wise, are in place already. It's just a case
Speaker 1: of kind of turning them on, but get ready for
Speaker 1: a very different office environment, at least based on Mark
Speaker 1: Iron's observations. You've been listening to Bloomberg Business Week Extra,
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Speaker 1: Live Money Through Party at two pm Wall Street Time.
Speaker 1: On Bloomberg Radio, I'm Jay to Kill and I'm Carol Masser,
Speaker 1: and this is Bloombird m