Steve Tutt: Welcome back to HL restoration impacting Midwest industries. Alongside me is Charlie Penner, the CO owner of HL restoration. We’ve got a special guest today, Mike Mayer, Managing Principal of Cushman Wakefield. Thanks for coming in today, Mike.
Mike Mayer: Thanks for having me.
ST: Well, I’ve been very excited about this interview. I have a lot of good questions for you, and I’m just happy that you’re here. But you’ve known HL Restoration and Charlie for a while now, haven’t you?
MM: I have, for a number of years.
ST: Oh, yeah. Tell us a little about that.
Charlie Penner: Well, we were just recently on vacation in the same place, I don’t know a month or so ago. And Mike is a very good influence, and he introduced me to a new cocktail called a Duke, and my wife was thrilled. Just absolutely thrilled because you know…
MM: [She] was not too thrilled with me.
ST: Oh, no?
MM: No. It’s all good, though. We had fun.
CP: And we like to play gin.
MM: We played a lot of gin.
ST: So did you play gin while having Dukes? And how did that turn out?
MM: I lost, so that’s why I’m here today.
ST: Good job, Charlie.
MM: He’s a good gin player.
ST: How long have you been in the business, Mike?
MM: Oh, gosh. I started in the business 34 years ago. I graduated from college in the mid-80s and then went to work for a guy named Roger Cohen. Remember, Roger Cohen? He was the 800-pound gorilla in commercial real estate here in Kansas City. He was an incredible mentor. So I started with him and then eventually was on the ground floor of a company called the wind berry group, and then have been in the business through different iterations of different companies, and now we’re Cushman & Wakefield, publicly traded as of about two years ago.
ST: Yeah, now Cushman & Wakefield is a large company, and it’s successful. Where are you guys rated in the United…well, you guys are worldwide?
MM: We’re worldwide. Great question. It depends on the metric. But generally, we’re either measured as two or three largest commercial real estate firms in the world. So we’re really proud of that. We have about 48,000 people. And we have an extended team here in Kansas City. We’re in 11 offices, our main corporate office is on the plaza, and we have about 160, 170 and growing right now here in Kansas City. I run that team, but I’m also what we call a ‘player-coach’ so I’m also producing and doing deals.
Back to Work Readiness Planning and Preparation
ST: Well, let’s get right to it, though, Mike. I got some questions for you. I’m really curious about it. The reason we brought you in with this topic is because it’s very hot right now. We’re in the middle of a pandemic, and citizens are scared right now. However, I do believe that the fear factor of this virus is kind of going away a little bit because it’s not an unknown anymore. They’re learning more about it. So people aren’t as scared as they were. But with that being said, the stay at home order is going to be lifted, and people are going to be going back to work. So my question to you is, can you tell us where are we in that process? And what is it going to look like?
MM: Yeah, great question. I think the answer is, we don’t really know at this point, every industry is going to be different. But obviously, what we’re encouraging our clients to do is to listen closely to what the government agencies and municipalities are saying. I don’t think it will be a situation where, you know, they say we can go back to work, you flip the light on, and everything’s back to normal.
I think it’s going to be very gradual. And one thing in commercial real estate is one size does not fit all. It’s going to be different depending on your industry and what your leadership team is and what their goals are, but I think it’s going to be very gradual, and I would caution people to not just rush back into the situation. Our company has done a lot of research and some thought leadership around this, and I’m happy to talk about that more about returning to the workforce, and that document actually is on our website. So I would encourage anybody to go to www.cushwake.com and download the guide. There’s a lot of great information on there, way too much for me to talk about for this, but I’m happy to hit the highlights of that if you want.
ST: Yeah, so you feel that this is gonna be a pretty drawn-out process.
MM: I would say not necessarily drawn out but more gradual, and it will evolve over a period of time. The guidelines that we came up with really encompass six major buckets, and there’s a lot more detail wrapped around these six buckets. But the first three things that I think employers need to be doing are things that need to be done prior to the workforce coming back. And number one, very importantly, is preparing the building and we’re hearing a lot about that and what does that mean. It means deep cleaning the space, it means errant filtration systems need to be looked at, and if you think about it, a lot of these buildings have been sitting vacant for several weeks, if not months. So my asset services team has been spending a lot of time during the downtime getting the buildings ready to go. So when people show up, you know that things are clean and up to speed and ready to take the employees on.
There’s also the number two: stuff that leadership needs to be doing is preparing the people in the workforce. And what’s that mean? It means communicating what the plan is. The smart companies, the smart leaders are going to be communicating what that return to work is going to look like. There’s got to be confidence. People are under a lot of stress right now. I do think there’s a sense that we’re kind of over the hump, but there’s still a lot of people uncomfortable. And so the leadership at Cushman is communicating what that phase is going to look like.
Then the third thing that we need to be doing prior to returning to the workforce is, understanding who’s going to have access to the space. I think that people need to be working with the property management company, with their landlord, and discussing who’s going to have access to the space, how are visitors going to be handled when they come to the space? Are we going to have limited people in elevators? How are our security desks going to be handled in some of our class A buildings? How are our visitors and deliveries going to be handled generally? So those are some of the things that need to be done now, before the return to work and some of the other steps.
ST: So a company gets preparation done correctly like you’re saying, is this going to be a full-on, you know, back to work right out of the gate? Or is this going to be like in phases?
MM: I would really discourage anybody from doing it too quickly. And I think it needs to be well thought out in phases. The next step that we talk about in our return to work readiness plan is social distancing, and we’ve heard a lot about this. So we’re advising our clients on some of the steps that they can do to have successful social distancing, and some of them are pretty creative.
There’s directional signage in some spaces, you know, everybody flows counterclockwise or clockwise depending on the space. We’re advising them on taking, in boardrooms and conference rooms, chairs out, putting in shields between workstations are some of the things we’re talking about.
ST: So, when you’re talking about getting prepared and stuff, are you talking about reducing like touchpoints, things like that?
MM: Yeah, generally. That’s really the next step is reducing touchpoints, and I think that is going to be more of a behavioral discipline with the workforce. For instance, I think gone are the days that hey, Heron Laughlin just dropped by some cookies go, you know, knock yourselves out. There’s going to be more discipline around with food, for instance, in the workplace.
ST: That disappoints me.
MM: Yeah, we have donut days here in Kansas City on Friday, so that may go away. But you know, generally, when somebody goes they’re in the kitchen they might wipe it down with a napkin. Is that going to be the norm going forward? I don’t think so.
I think there’s got to be more discipline around, you know, using Clorox wipes and again everybody needs to do what they feel is best based on their situation. But I do feel that it’s going to be more of a discipline with the employees, you know, scooping ice out of the machine. You’re going to think twice about that and making sure that you have enough hand sanitizer, some of the obvious things we’re providing face masks for our employees when they return and a lot of our clients will be doing the same thing.
CP: So Mike, what do you see? You’re talking about enormous amounts of space with lots of employees. What does employee compliance look like? How does this get enforced?
MM: Again, I think it’s going to depend. And a lot of it, you know, we’re telling our people, listen, you’re adults, we’re all in this together, and be respectful of other people. If somebody is not wiping down their desk, we’re not going to fire them. But I think it’s just a respect thing. And hopefully, leadership and individual companies have built a culture of trust and respect, and I think that’s what it’s going to come down to. Hopefully people are on board. I think one thing that’s happened over the last six weeks is that there’s a sense of coming together, and we’re all in this together.
CP: I agree with that.
ST: So, this checklist that companies may have, it’s going to grow, right? I mean, are you suggesting that your company will have more guidance on how to handle this?
MM: Yeah, I would say I think a better word than grow is that it’s gonna evolve. We’re learning things every day. So I think really, and this kind of ties into the sixth step of our return to work, and that’s communicating with confidence. We’ve never been through a pandemic like this. Obviously, people are still very uncomfortable and nervous. A lot of times the honest answer from a leader is, “I don’t know, I just simply don’t know what this means.” And so we’ve been very transparent with the workforce, and we’re encouraging our clients to be transparent, as well. If the answer is, “We don’t know where we’re going to address it when we get there, and we have more information.” That’s okay. So a lot of that is evolving, and I don’t pretend, and I don’t think anybody pretends to know to have all the answers at this point.
How the “New Normal” is Affecting Industries in Kansas City
CP: Well, what have you seen shift? It’s almost like a baptism by fire of learning to utilize Zoom and people working remotely. Do you think that level of use of those things is going to maintain, and people are going to stay working remotely? Or do you see everybody saying, “This working from home thing doesn’t work for me? I want to get back to my office.”
MM: That’s a great question, and that’s on the top of our minds. And I think again, the answer is that we don’t know. I believe that staying at home over the last number of weeks have proven that some of this technology like Zoom and Microsoft Teams does work, and I think you’re gonna have a lot of people that are paying a lot of leaders, even like silk stocking type firms like Goldman Sachs, JP Morgan, they have figured out that there are technologies that allow other people to work from home, and as long as they’re getting their jobs done, that you could possibly see a reduction in space. We’re not seeing anything immediate in that respect right now, but down the road? Sure, I think it’s definitely on the top of our mind that there could be a reduction in that.
ST: Well, in the broader sense of the commercial real estate business, I mean, can you tell us what’s going on in that industry?
MM: Yeah, specifically to Kansas City is what I can address, and I will tell you that Kevin Thorpe, who’s the head of our research for Cushman & Wakefield, has come out and said, obviously, we’re in a recession. He’s not going to win any awards for saying that, you know, duh, right. But what that tells me is that we’re not sugarcoating the data, and we’re informing our clients that this is bad.
You know, I read today that 30 million people have applied for unemployment over the last six weeks, and the GDP is going to shrink by an enormous amount, things that we haven’t seen since 2008, and in the unemployment numbers, even back to the depression, so there’s a lot of anxiety. But I will tell you in Kansas City, it really kind of depends on the sector.
Our industrial team, they’re doing extremely well right now. E-commerce and big-box distribution continue to do well. Now e-commerce was doing well two years ago, way pre-pandemic. I think the pandemic has even put more of an emphasis on e-commerce, so we’re doing really well in industrial. They’re doing big deals. Big manufacturing is getting a lot of looks right now. We’re selling the Harley Davidson plant up north, and that’s got a lot of activity right now. So our industrial team is doing well. It’s pretty much business as usual, for the most part. On the office side of things, that’s a little different story. I’ve seen some of our team, you know, they’re telling me that on some deals the clients have tapped the brakes on either purchase or release.
What concerns me is that we’re not seeing a lot of new activity into the business development pipeline right now. I mean, we’re in the state of Missouri, right, the Show Me State, so there aren’t a lot of physical tours being done. We’re seeing a lot of this technology with [inaudible] and some of these virtual tours of office buildings that we’ve talked about. So there is some of that going on, but right now, deals that were in the pipeline on the office side are getting done.
What concerns me is how that’s going to look in the third and fourth quarters. We have a project management team, and the individual that runs that for me, Paul Wade, has been very impressed with the ability for him to go online with these different municipalities and pull work permits and get inspections done. So our project management group is moving ahead. Construction jobs are getting done, as you guys know, so that’s positive.
Obviously retail’s getting a lot of press right now. You’re going to have some retailers that were struggling pre-pandemic that are probably not going to make it. And so I think that’s where you’re going to see a lot of the shakeup. But what drives commercial real estate in Kansas City is the overall health of the general economy. So as the general economy goes in Kansas City, as goes the real estate market, and what drives that is a lot are guys in the C suite. If they’re confident that their business is going to grow, they’re going to want more real estate. So to me, it’s all about confidence and growth in the labor market. And again, a lot of that is to be determined. But there are a lot of questions out there about that.
ST: And there’s probably a lot of people out there that scoff at your confidence and the local economy, given that current situation. What would you say to them?
MM: Well, I would say, listen, there is a lot of stress out there, and I understand that. But I do believe, and the experts in our company believe this will be more of a V-shaped recovery. So I don’t believe that it will be drawn out like the 2008 recession. You know, we were humming along pretty well. There are no serious faults in the economy right now that we were looking at pre-pandemic, so I feel like we’re gonna slingshot out of this pretty quickly. But yes, there’s clearly a lot of stress. And I think what we need to remember and we advise our clients is that people come first. Do what’s right for the people, and if you do that, you create a good culture where you take care of their health are first and foremost, will come out of this just fine.
ST: I definitely like his confidence, don’t you, Charlie?
CP: Absolutely. One of the, and this is a divergence from the commercial real estate world, but so much of what we do when we go out, and we meet people, and we see people, it’s a very interactive kind of a business, and you’re the same way. I know you travel all over the place. You go to meetings, and a lot of this is done face to face. So coming out of this, do you think that there’s going to be a change to that? Or are you guys talking about that behind the scenes saying, how do we get back? I try to book, you know, three or four lunches a week with potential clients and clients. And it’s a different dynamic right now.
MM: We love face to face meetings, and I think that’s still the best way to do business. In spite of all the great technology and Zoom and some of these things; we’re in a business of trust. You’re going to do business with my firm, or I’m going to do business with you all because we trust each other, and that’s building up relationships, right, and I think that’s best-done face to face. But again, you know, we have to take into consideration, what’s the right thing to do. Not only for my health, but for the people that I’m around.
I guess the answer is we’re not sure yet. If they come up with a cure for this, a vaccination, that’s going to be a lot different than if they don’t come up with one. I have every confidence in the world, from what I’m reading, that that’s going to happen, so I think that once we can get that commercially available and quickly available to the people, you’ll see more and more of these meetings come back. But as of right now, Charlie, the brakes have been hit on a lot of that.
CP: And the same with all the conventions and all of those kinds of things, and that’s a huge piece of the economic drive. When people who own the convention spaces, the cities, municipalities, and all of a sudden, everything has been canceled. I know you’re a sports fan, so what do you see happening with things like that?
MM: Again, I’m a glass half full type of guy. I think we’ll get back to a sense of normalcy. You know, will it be different? Possibly. Could there be temperatures taken as you go through the gate of Arrowhead? Possibly. I just have very strong confidence and belief that we’ll get back to some semblance of that. You know, if you look back, a lot of us lived through 2001, 9/11, and we all got back on airplanes eventually. Were things different? TSA was created. Of course, things have changed. Could things like that be put in place that we can get back to things like the Chiefs and the Royals? I think you’re gonna see that.
Question and Answer Round with Mike Mayer
ST: That’s a great point. Thank you for covering that with us. I want to kind of change gears a little bit. I want to have a little fun with you, Mike. This is the last segment of every vlog here, and what we do is we ask you some questions. You don’t know what these questions are. They’re fun questions. There’s no rapid-fire. We’re just gonna take your time to go through these questions. But, Charlie, start us off.
CP: Best golf course?
MM: Mission Hills Country Club. I’m a little biased. I was president of the country club and loved all my friends there.
CP: Your favorite car?
MM: Oh, boy. Probably a Volkswagen Beetle because that was my first car, believe it or not. I know you, Charlie, thinking that it’s a fancy sedan, but I just have great memories of that car when I was 16 years old.
CP: I did not see that coming.
ST: I didn’t either. I was gonna say that, that’s cute, Mike, my niece just bought one.
MM: I know, but I’m just gonna tell you though I had it when I was 16 years old.
CP: Okay, bananas or apples?
MM: Oh, bananas, with peanut butter.
ST: Snow White or Cinderella?
MM: Oh gosh, I guess, Snow White.
CP: If you are given an elephant, and you can’t give it away or sell it, what do you do with it?
MM: Gosh, I couldn’t sell it or…give it to the zoo?
CP: You can’t give it away.
MM: Oh, I can’t give it away to the zoo? What do I do with it? Gosh, that’s a great question. I can’t give it away…
ST: And you can’t sell it, and you got an elephant, so what do you do with it?
MM: Probably keep it in the backyard? I don’t know. You got me on that. Start a circus, there you go. You got me on that one.
ST: What was the last gift you gave someone?
MM: I gave my son a fishing pole.
ST: I like that!
CP: What would your autobiography be called?
MM: ‘I Did It My Way.’ Frank Sinatra.
ST: He stole that from you, didn’t he? A random six-year-old child asked you if Santa Claus is real, what do you say?
MM: Go talk to your parents. I learned that the hard way.
CP: Would you rather fight one horse-sized duck or 100 duck-sized horses?
MM: Probably 100 duck-sized horses. I could get my hands around their nose pretty easily, and the shotgun spreads.
ST: What is the most useless talent you have?
MM: Juggling. Which isn’t much of a talent.
CP: And last but not least, what is your favorite quote?
MM: My favorite quote…Well, I got a couple that come to mind, but I would say, “The world is full of beauty when the heart is full of love.” I said that to my wife once
ST: Wow. Dang.
CP: Well, Michael T. Mayer, this has been awesome.
ST: Yeah, it’s been great.
MM: Thank you all for having me.
CP: Thanks for coming in here and doing this, and it was fun.
ST: If you guys have comments that you want to share with us, make sure you like, subscribe, dislike, tell us what you think about Mike and Cushman & Wakefield, we’ll be glad to share that with him. But we’ll put up his website that he mentioned earlier in the comments and you may get some questions, Mike, and we’ll shoot him over to you.
MM: I’d be happy to.
ST: Thanks for joining us again, and we’ll see you in the next episode.
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