"My buddies would joke with me that I went from making cold drinks to making cold calls. So, I went from my bartending life on the beach over at the Starboard, and a couple of months later, I was wearing a tie around my neck reaching out to CEOs trying to open doors."
Welcome back to 1st Floor Conversations, where the view at the top is only as good as the foundation which preserves it. On Episode 49, we were joined by Paul Carney. Paul has been an award-winning real estate advisor for companies of all sizes for the last decade, working with the likes of Adobe, E3 Federal, Equifax, Insight Global, and Kettler, to name a few. His extensive industry experience, representing tenants and executing negotiations, makes him the go-to guy for all things commercial real estate.
With remote mandates and the growing impact of COVID, it's clear that our relationship with work has changed. Millions of workers haven't been to an office in months, and many companies have announced permanent remote-work policies beyond the timeline aligned to COVID. It's safe to say that companies and their employees are reevaluating the value of the traditional office space. So rather than speculate, Paul is here to help set the record straight. During this conversation, we are here to discover trends and figure out what we can do because we know for certain this is a historic moment that will lead to real, long term changes.
Cold Drinks to Cold Calls
Paul Carney calls Ijamsville, Maryland, his hometown and the beaches of Delaware a second home after spending summers living and working by the water.
"Half of life is showing up."
Paul recounts a pivotal memory from a Tuesday afternoon on a party bus with restaurant coworkers en route to Ocean City, Maryland. Paul made a point to speak with the one guy he didn't know and asked what he did for a living. The response was "commercial real estate". Paul realized this individual was successful professionally yet still living an incredible life beyond work. It was when Paul followed up with that individual months later that he turned that conversation into a career.
We discussed the fact that most people would ignore the one person they didn't know and that had Paul made assumptions, stayed with his close friends, and went on his normal day, he may have missed the conversation that changed his life.
That conversation jumpstarted what has been a decade long career in commercial real estate. Paul has spent nine years as a tenant representation broker, working for a couple of companies, including Transwestern and Colliers. Just last year, he had the opportunity to join one of the fastest-growing companies in the entire world, WeWork, aiding their expansion throughout the Mid Atlantic, DC, Maryland, Virginia, Baltimore, Pittsburgh, and Philadelphia.
He is now back in his favorite role, serving as a tenant advisor at one of the largest commercial real estate companies in the world, Cushman and Wakefield.
The real estate industry can be incredibly cut-throat, so I had to know how Paul managed to evade the churn and maintain motivation to grind in the industry. The answer, an incredible mindset.
The ability to stick it out began with a highly competitive nature and the desire to turn a profit ahead of the projected three-year entry fee. It ended up taken the full three years, but he developed a real passion for "succeeding at advising [his] clients, not just for one transaction, but over the course of a long period." Approaching business to develop a career and become an advisor to your clients is uniquely valuable to both parties.
When developing a no excuses, career-oriented, growth mindset, you remove all obligation associated with the job description and create room to flourish for both you and your client. Paul wasn't hurting for motivation either.
An Ever-Evolving Space
Meeting a company's commercial real estate needs is a bigger fish to fry than matchmaking square footage. Not only are the needs far more specific, but they are continually changing as the world, the economy, and the technology transform.
It's hard to imagine just ten years ago we worked in a different ecosystem where many professionals were without iPhones, personal laptop computers, and the ability to work from Starbucks between meetings.
As the world continued to change, the challenges for Paul's niche of GovCons companies, IT, and professional services organizations fluctuated from one contract to another. Imagine trying to sign a long-term lease in a market where you could win a contract tomorrow and double the company headcount in 30 days.
High growth, GovCon contracting firms can fluctuate up and down, requiring help to maximize flexibility in their office space and lease. Which means:
Creating opportunities for expansion options
Termination options on all or part of an office space
Options in the lease tailored to the outcome of specific contracts
It goes back to understanding the client. What do they do with their business, and why is it important? What is their overall strategy in the short term, but also the long term as far as financial goals, growth, and company culture? Without clarity around your clients' wants and direction, it doesn't matter how much you know about current market conditions.
Working from Home & Dynamic Data
As COVID-19 remains a very real part of our day-to-day, I couldn't help but wonder whether people were still running with the new virtual landscape or looking to get back to the office.
The mandatory work from home stint will shift the perception of the 9 to 5. We'll likely see more flexible work hours and environments with the realization that "you don't need to be in the office at 8 am and then leave at 6 pm to show that you can be productive."
A study by Cushman and Wakefield recorded a total of 1.7 million data points from 40,000 survey respondents that showed that people love the flexibility of working from home but miss the workplace for its community and collaboration.
Data is a powerful driving force in the strategy and advisory work in commercial real estate. The same worldwide survey conducted by Cushman and Wakefield revealed the surprising and somewhat counterintuitive notion that "younger employees" aren't leading the charge to continue working from home. It's the opposite. Millennial and Gen Z workers are keen to return to work environments where they receive direct access and support from their mentors and managers. Many are struggling with ill-equipped workspaces, small apartments, and a lack of community engagement.
That's why data is essential. It is not a marketing tool to get people to think you're valuable. Actionable data builds a better strategy; better strategy bridges the gap between guessing and knowing. If somebody else is guessing, then you know, you will be more productive, you'll grow faster, you'll be more profitable, your employees will be more engaged, and you'll see less turnover.
The emergence of co-working has changed how people perceive their real estate needs, their office needs, and what a corporate office can ultimately be.
"I think co-working is part of the ecosystem of how you evaluate and how you ultimately use office space for the long term. I think co-working is here to stay. I think it's part of the conversation."
Co-working allows multiple employers to share infrastructure and still provide the advantages of an office environment and equipment. They were initially invented with the startup in mind with a handful of employees, uncertain growth, and salespeople who may need to spend much of their time in the field.
Today, the conversation around co-working extends to many larger organizations with multiple hubs that may need to open operations quickly and efficiently in a new location. Larger companies use it as a corporate lilypad when there isn't time or space to custom tailor construction to a brand-new market.
The end goal doesn't always have to be 10,000 square feet of open architecture and espresso machines. Sometimes the solution is a co-working space where people can comfortably engage and be collaborative. Companies can continue to fee beholden to their office set or they can work with an advisor. The data is coming in clear in that great real estate strategy can serve as a driver for growth, engagement, and community within an organization. So we conclude with one question: How large is the gap between guessing and knowing, and what do you intend to do about it?
The Wrap Up
Most people's top three business expenses are payroll, health insurance, and rent. It's a lot of money, and I know some people are looking at COVID and transitioning to a virtual work environment as a potential area to recapture that rent roll and leverage that working capital elsewhere. Still, it all comes down to the present state and the planned future. What's the future trajectory, and what is the company trying to accomplish?
So, have the conversation and narrow that scope by talking with a real estate veteran and all-around great guy, Paul Carney.
Thanks for joining us on the 1st Floor Conversations, where the thesis is simple; the view at the top is only as good as the foundation which preserves it.
Now go connect with Paul on LinkedIn and enjoy his amazing content!