Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. We talk a lot about the
Speaker 1: future of on this program, Carol, and that's what's on
Speaker 1: everyone's mind. So I'm really excited to catch up with
Speaker 1: our next guest. He's someone whose career I followed for
Speaker 1: quite some time. Had a chance to meet him a
Speaker 1: few times over the years. Talking about Mark I and
Speaker 1: he is the chairman of Castle Systems, joining us on
Speaker 1: the phone from Washington. He's got his hands in all
Speaker 1: sorts of different things, including the future of work, the
Speaker 1: future of sports, and so much more. Mark. Really, good
Speaker 1: to have you on the program. Great to be with you, guys.
Speaker 1: So let's talk about the workplace first. Because they're at
Speaker 1: Castle Systems, You guys have been working on what's essentially
Speaker 1: a blueprint for what happens next in offices. This is
Speaker 1: something we are talking about all the time. So break
Speaker 1: it down, help us understand what you're thinking about. Yeah,
Speaker 1: and I mean you know every day you're turning on
Speaker 1: the TV or reading of people's opinions. Everyone's trying to
Speaker 1: figure out how do we get back to work but
Speaker 1: do it safely? And um Castle has been the leader
Speaker 1: in providing managed office security for fifty years, and we
Speaker 1: didn't see anyone really stepping in trying to think about
Speaker 1: how do you build a system to get people back
Speaker 1: to the office in a safe way. And so we've
Speaker 1: come up with a framework that we think is a
Speaker 1: really comprehensive way that leverages a lot of existing technologies.
Speaker 1: You don't invent anything, and most importantly, it makes the
Speaker 1: ecosystem safe for everyone. If you think about an office
Speaker 1: building is comprised of the building, the tenants, the people
Speaker 1: that work there, and the visitors, and you've really got
Speaker 1: to make sure that you incorporate a system that addresses
Speaker 1: all of them. And that's what we've done with the
Speaker 1: Castle Safe Spaces. So talk to us about, you know, Mark,
Speaker 1: how our spaces will change, particularly in the work workplace,
Speaker 1: especially as we're going to be afraid to touch things,
Speaker 1: We're gonna be obsessed with washing our hands. So how
Speaker 1: do things evolve? How do things change? And I'm curious
Speaker 1: because it sounds like these will be lasting changes. Yeah,
Speaker 1: and I do think. I look, I think a lot
Speaker 1: of the things that are going to happen are things
Speaker 1: that actually have a lot of utility, even past the
Speaker 1: age of corona. So I do think a lot of
Speaker 1: these will be permanent changes. But we really think about
Speaker 1: it with four main things. The first is the screening
Speaker 1: in screening out process. Uh. You know, most buildings have,
Speaker 1: some major cities have some kind of access control that
Speaker 1: let's you know who should be in and who should
Speaker 1: be out. Um, by integrating health data, you know who
Speaker 1: shouldn't be coming to the office at any given time.
Speaker 1: And through also integrating health data at the point that
Speaker 1: we have good testing, it also could create an easy
Speaker 1: way for people to come in who we know are safe.
Speaker 1: So it starts with screening, screen out, and then for
Speaker 1: people who you don't know in advance, you're gonna get
Speaker 1: your temperature taken. If you look overseas where they have
Speaker 1: opened up the their business is quicker. Um. You see
Speaker 1: temperature testing is something and stunt either was someone taking
Speaker 1: your temperature through thermal camp. So screening in and screening
Speaker 1: out the first thing. The second thing is you mentioned
Speaker 1: is touchless. There's so many shared services in an office building,
Speaker 1: so we see if near future where doors will open
Speaker 1: automatically when presented with an access device. Elevators are called
Speaker 1: from an app in your phone doors to your office
Speaker 1: will open automatically, and in fact, you may have areas
Speaker 1: that are protected with outdoors, but just alarms that will
Speaker 1: sound if you don't have the right credentials. So touch
Speaker 1: list is a big piece of it. UH enforcing social distancing,
Speaker 1: which is something we all talk about, but making sure
Speaker 1: that you stagger arrivals, that you manage visitor uh the
Speaker 1: amount of visitors you have and when they come. And
Speaker 1: then the last peach is contact tracing. You know everyone
Speaker 1: talks about contact tracing, but if you use your access
Speaker 1: control system seven in a building and you make everyone
Speaker 1: who comes in log in and log out, which is
Speaker 1: very easy and Latin intrusive, and you use the same
Speaker 1: intendance space as you have a permanent record of who
Speaker 1: is in the building at any point in time to
Speaker 1: live been tenant spaces at any point in time, and
Speaker 1: 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 to actually leverage technology that's here today and
Speaker 1: that building owners are starting to put into place, and
Speaker 1: so Mark, where does privacy fit into all of this?
Speaker 1: I mean, are we just going to have to get
Speaker 1: used to giving up a certain amount of personal data?
Speaker 1: And how 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 helped data may get 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 going to be built into uh the system so
Speaker 1: that it doesn't reside, for instance, in any companies other
Speaker 1: than your companies. Who knows should reside any in anyone
Speaker 1: else's systems? UM, But you know, look, the tradeoff always
Speaker 1: UH is always between security and privacy. And if you
Speaker 1: look at the countries that have managed this the best,
Speaker 1: they've made that trade off and they've gone further than
Speaker 1: we will. In A big question everyone has for the
Speaker 1: United States is you know, there's there's reasonable trade offs
Speaker 1: between privacy and security, and I think if we really
Speaker 1: want to get back to work, we're going to have
Speaker 1: to make some of those. How quickly can we make
Speaker 1: all these changes, because you're talking about a lot of
Speaker 1: existing infrastructure, Office buildings. Uh. And as you say, this
Speaker 1: is lasting, so how quickly can we change all of this? Well,
Speaker 1: I think that's the great thing that as we started
Speaker 1: thinking about this, a lot of the things I just
Speaker 1: mentioned to you, buildings have today. It's just literally a
Speaker 1: matter of turning them on, you know, turning on seven uh,
Speaker 1: you know, using your card, your fib or. We have
Speaker 1: an app that let's people get in use even make
Speaker 1: sure your tenants to use the system like that for
Speaker 1: contact raceing. Uh. Touchless systems are easy too. You can
Speaker 1: quickly convert doors to electric doors so that when they're
Speaker 1: presented with the credential, they can open. A lot of
Speaker 1: the things we talk about are available today. Now there's
Speaker 1: next generations of things that we're working on and others
Speaker 1: are working on. They will make the system even quicker,
Speaker 1: less intrusive, maybe even slightly better. But you don't need
Speaker 1: to wait for that to make these buildings actually reasonably
Speaker 1: safe for people to get back to work. So, Mark,
Speaker 1: I would love to talk to you a little more
Speaker 1: broadly about the real estate environment, because you know you've
Speaker 1: invested pretty heavily in real estate over the course of
Speaker 1: your career, both residential and commercial and Obviously, all that
Speaker 1: we've been talking about really potentially has an impact on
Speaker 1: not just how commercial real estate works, but the amount
Speaker 1: of of real estate that a company needs at any
Speaker 1: given time. I feel like we get conflicting reports on
Speaker 1: we're gonna need a much less office space or we're
Speaker 1: going to need more office space, depending sometimes on who
Speaker 1: you're talking to and what business they're in. Where do
Speaker 1: you net out on this? You know, it's really it's
Speaker 1: a great question, because when this started, my mindset was
Speaker 1: everyone's like, oh, this is a new way to work.
Speaker 1: And I was like, tell them, show me one person
Speaker 1: who's happier being in all the time, and uh, and
Speaker 1: I'll believe that. Um And I look, there's a lot
Speaker 1: of silver ligning to being home, a ton of them.
Speaker 1: But I think people really have also a desire to
Speaker 1: be in the same place as their colleagues. But I
Speaker 1: will say the longer this drags on, you really start
Speaker 1: to people start to form habits that I think are
Speaker 1: going to be enduring. I don't think it means people
Speaker 1: won't go back to work, but I think I really
Speaker 1: do believe that this is stretched on that a lot
Speaker 1: of the things that ways that people are working now
Speaker 1: are not going to be the permanent way, but they'll
Speaker 1: be incorporated into that, and yeah, that will have an
Speaker 1: impact on the amount of space, I would say less.
Speaker 1: I can't imagine a case where people are going to
Speaker 1: need more um and I think people are going to
Speaker 1: think about the office is a place to come and collaborate,
Speaker 1: but maybe more flexibility on being able to work outside
Speaker 1: of the office when they're working on things where they
Speaker 1: can do that just as well, if not better. And
Speaker 1: you know, the thing about markets is it only takes
Speaker 1: the small incremental change to change the market, right, so
Speaker 1: you know, if ten or shifts, that's a gigantic change
Speaker 1: in the market. And I think I think there's a
Speaker 1: really good chance that we're going to see some of
Speaker 1: these things become permanent. So is the era of open
Speaker 1: floor office space done? I mean, I think until there's
Speaker 1: a you know, until there's a until there's a cure,
Speaker 1: either a vaccine or a treatment for this, I think
Speaker 1: that is absolutely the case. And the hope is is
Speaker 1: that that happens, it happens reasonably quickly, and that there's
Speaker 1: not another one of these behind it. I I think
Speaker 1: if we get to the point where there's a vaccine
Speaker 1: or treatment. I think people will go back to that.
Speaker 1: I don't like we're gonna all go back to being
Speaker 1: our own offices. Um. But until that comes, I think
Speaker 1: you're not going to see people working in open environments
Speaker 1: unless there's plexo glass between cubes, which is something that
Speaker 1: people are using are going to start using. So, Mark,
Speaker 1: I wonder about a place like you know, your town, Washington,
Speaker 1: d C. Where you know, you've got pretty vibrant suburbs,
Speaker 1: but you've also had a city I was fortunate enough
Speaker 1: to go to college there that really has you know,
Speaker 1: blossomed in a whole new and different way with a
Speaker 1: lot of sort of renovation and maybe some gentrification, which
Speaker 1: is a whole other debate that will have another time
Speaker 1: about the things that have happened in Washington. But I
Speaker 1: do wonder, you know, as someone who is as deeply
Speaker 1: involved in that city as you are, how does it
Speaker 1: change a city like Washington, again setting politics aside, but
Speaker 1: just as as sort of a physical place. Yeah, so
Speaker 1: let's let's talk about the real Washington, not but Washington
Speaker 1: 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 new themes and the rent and
Speaker 1: performing arts. UM. One of the things that I was
Speaker 1: my greatest concern is the small businesses and particularly restaurants,
Speaker 1: and in Alina's because that has in a city like Washington,
Speaker 1: but it's happened in cities across America on those eCos
Speaker 1: systems took decades to build, and this is going to
Speaker 1: be really difficult for many many, many of those establishments
Speaker 1: to survive. UM. Even if you get back, very few
Speaker 1: restaurants are viable on fifty percent capacity, which is what
Speaker 1: people are saying. They can't pay the rent on fifty campath,
Speaker 1: they can't pay the other expenses, 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 C 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 best. And um, and I
Speaker 1: really think it's going to take a lot of focus
Speaker 1: and a good amount of resources to make sure we
Speaker 1: don't destroy decades of process of progress in cities like ours.
Speaker 1: So we need to talk sports. As Jason t you
Speaker 1: up earlier. Um, you know you are certainly well involved
Speaker 1: in the sports world Mark as well. You are the
Speaker 1: founder and owner of the Washington Castle's franchise, and more
Speaker 1: so the sports world. We've been having a lot of
Speaker 1: conversations about that. Certainly big events, sporting events, it's a
Speaker 1: while before they come back. How do you see it
Speaker 1: and what are the conversations, the smart conversations that you're
Speaker 1: having around this. Yes, so we were in the middle
Speaker 1: of our sports season with the Overwatch League, and had
Speaker 1: gotten off to a great start with our first two weekends,
Speaker 1: and there was a huge amount of enthusiasm and we
Speaker 1: had to put that on pause. The great thing about
Speaker 1: E sports is the season has continued because people can
Speaker 1: play virtually and uh and so that's actually been a
Speaker 1: bit of a blessing. The real the big one I'm
Speaker 1: focused on is I'm now the owner of the City
Speaker 1: Open Tennis tournament, which is the fifth biggest tennis tournament
Speaker 1: in the United States. But it's actually the first now
Speaker 1: tennis event back in the world since Wimbledon has been canceled. Uh.
Speaker 1: That's on the schedule, UH, and it's the first week
Speaker 1: in March, and we're trying to figure out if we're
Speaker 1: going to be able to play it most realistically with
Speaker 1: either no fans or a small number of fans now
Speaker 1: and I think this is really instructive because this also
Speaker 1: precains to a number of our other businesses. On the surface,
Speaker 1: you can imagine it shouldn't be that hard to test
Speaker 1: and protect, you know, a hundred tennis players, male and
Speaker 1: female tennis players and their staff. By the time we
Speaker 1: get to August, that should be But I will say
Speaker 1: when you really peel back the onion and you go
Speaker 1: layer and layer and layer in what it's going to
Speaker 1: take to make it absolutely safe, it's much more daunting
Speaker 1: than it looks at the surface. And I think that's
Speaker 1: why you see in other sports people saying we're going
Speaker 1: to be back and we're gonna go play in a
Speaker 1: neutral place, or we're going to create these bubbles, and
Speaker 1: then they get delayed and delayed because the more you
Speaker 1: dig into it, the harder it is. Now. I do
Speaker 1: believe there's answers. I believe tennis is a sport that
Speaker 1: you should be able to play. Whether we can figure
Speaker 1: it out in August, we've got another month to make.
Speaker 1: That decision is something we're working a and night on
Speaker 1: and a lot of people are working on. I would
Speaker 1: just say that, um, it's a lot harder because you
Speaker 1: really do want to make sure it's absolutely safe, and
Speaker 1: the amount of things that have to come together to
Speaker 1: 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 H 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: described 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 the
Speaker 1: but the bigger point you make, which contains every thing
Speaker 1: outside of sports, and to bring back to where we
Speaker 1: were with why Castle created this framework is because it's
Speaker 1: extraordinary to me how there really is a lack of
Speaker 1: authoritative sources on any of this. And you know we've
Speaker 1: spent I mean I spend seven days a week pretty
Speaker 1: much all day devouring every bit of information I can
Speaker 1: either read or talk to experts or participate on calls.
Speaker 1: And there is no authoritative source on any of this.
Speaker 1: And um and and and the experts can degree can
Speaker 1: disagree to a huge extent on for instance, the accuracy
Speaker 1: of the tests. Some experts will tell you the tests
Speaker 1: if they're FDA proved, and the sample is good that
Speaker 1: they are close to accurate. Other real experts will tell
Speaker 1: you publicly and some privately that there's as much as
Speaker 1: a false negative. Right, This is an issue that I
Speaker 1: have not seeing 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's 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 again it's it's and and I'd say that's
Speaker 1: one of the extreme examples, but I'm seeing that in
Speaker 1: virtually every element of how do you bring people back
Speaker 1: to work? Now, it's it's really it's really really interesting. Unfortunate.
Speaker 1: We're gonna have to leave it there. We could talk
Speaker 1: to you all afternoon and evening. Mark, i'n what a treat.
Speaker 1: Thank you so much for spending so much time with us,
Speaker 1: Chairman of Castle Systems, uh and so much more. As
Speaker 1: you just heard him describe