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ALL EPISODES

Episode 78

Flexible Space, Coworking and Workplace as a Service Explained

with Craig Loeber of CommonGrounds Workplace

Craig Loeber is Director of Growth for CommonGrounds Workplace where he is committed to serving others with an appreciation for the complex global challenges and opportunities we face in our interconnected and technologically accelerating world. Looking beyond the current headlines, Mike Petrusky asks Craig to explain the state of the "workplace as a service" industry and why he believes that the trends show flexible space will continue to be an essential part of Fortune 1500 real estate portfolios as strategic planning timelines are reduced. Craig and Mike discuss how technological advancements and culture changes have made coworking an important product that is part of an overall ecosystem that is adapting to the needs of modern organizations. They agree that the most valuable tech tools of the future will be those that enhance employee productivity and deliver frictionless experiences for the occupants of our facilities. Craig highlights the fact that talent attraction and retention is top of mind for executives today and the flexible workplace will allow leadership teams deliver options that meet the expectation of the workforce of the future. As always, Mike asks about music leading to an inspiring version of EDM podcast karaoke!

Intelligent Space White Paper

Download the FREE “Workplace & Space Management Software” report from Verdantix: https://www.iofficecorp.com/verdantix-report-mp

Connect with Craig on LinkedIn: https://www.linkedin.com/in/craig-loeber-bb13a42a/

Learn more about CommonGrounds Workplace: https://cgworkplace.com/

Watch Mike’s Ted-style talk from Dublin: https://youtu.be/DudLzQoU1X0

Connect with Mike on LinkedIn: https://www.linkedin.com/in/mikepetrusky/

Share your thoughts with Mike via email: podcast@iOFFICECORP.com

Learn more about iOFFICE’s workplace experience solutions: https://www.iOFFICECORP.com/

Read full transcript:

Mike:

Hey, I wanted to take just a minute to tell you about a new report that was released recently. It was published by Verdantix, an independent research and consulting firm. In it, they conducted a review of the 23 most prominent space and workplace management software companies.

            Guess what? iOFFICE was named the leader in two categories. iOFFICE scored highest overall and highest in workplace services. Awesome, right? If you've been thinking about workplace and space management software, and you're just not sure which option out there is right for you, I'd like to send you a free copy of the report so you can check it out for yourself. All you need to do is go to iofficecorp.com/verdantix-report-MP. That's right. MP, as in DJ Mike P. I'll also leave this link in the show notes for you to make it easy. I hope it helps with your decision making process as you explore the available software tools that will help you elevate the employee experience in your organization.

Craig Loeber:

The companies that can deliver that laundry list of relevant workplace products and services from which an individual employee and a team can pick and choose from unique to them, and it does best support their ability to produce are the ones that are going to be the most sought after places to work.

Mike:

This is the Workplace Innovator podcast, where we talk with corporate real estate and facility management leaders about the industry trends and technologies impacting your organization. This show is powered by iOFFICE, the leading employee experience focused IWMS software that delivers real time data and mobile tools to help you intelligently manage your digital workplace.

            Hey there, and welcome to the show. My name is Mike, and this is episode 78 of the Workplace Innovator podcast. Thanks for joining me today. As always, I have a very cool interview to share with you today. It's a conversation with Craig Loeber of CommonGrounds Workplace, a workplace as a service provider, based in San Diego. I met Craig a little while ago, and this area of flexible space, coworking, and space as a service is something that is just fascinating to me. The reason I love this topic so much is probably because it touches on all the aspects of the show that most excite me. Human beings providing for their needs, and then the interaction with technology tools, and amenities, and the culture shifts going on in our workplaces today. It's all here in my conversation with Craig. So, let's get to it.

            Joining us today on the Workplace Innovator hotline, I am pleased to welcome Craig Loeber to the show. Hi Craig.

Craig Loeber:

Mike, how's it going?

Mike:

It's going great. Thanks for joining us.

Craig Loeber:

Well, thanks for having me.

Mike:

Craig is director of growth for CommonGrounds Workplace in the San Diego area. But Craig, you're not in San Diego today, are you?

Craig Loeber:

I'm not. No, I'm calling from a hotel room in Los Angeles and tend to live my life in hotels these days. It's just another Wednesday.

Mike:

You and me both, my friend. I'm glad to finally catch up with you. It's a long time coming. We actually met last year at a realcomm IBcon conference in Las Vegas, right?

Craig Loeber:

Yeah, we did, yeah.

Mike:

Vegas baby. You were part of a great panel with some past guests from the show. Adam Stoltz of Transwestern, our very first guest ever, episode two folks, was on that panel with you.

Craig Loeber:

He was.

Mike:

It was moderated by Rachel Casanova, and Bill Dowser was on the panel. Anyway, it was a great discussion. It was on coworking and space as a service. Is it a paradigm shift or slight adjustments to an existing model? It's the question we all have. We'll get into that here shortly. Before we do, tell us a little bit about the CommonGrounds Workplace.

Craig Loeber:

Yeah, so we're a workplace as a service operator. What we're doing is building the physical and digital infrastructure that supports the flexible workplace needs of the 21st century, Fortune 1500, and enterprise user.

Mike:

Cool. And that's something I'm fascinated about, certainly peaks my interest, I talk about it all the time is the potential revolutionary shift in the world of real estate and facility management. My audience wants to know, is it a fad? Is it something's going to go away? Or do you think it's a fundamental shift in how we're going to manage workplaces going forward?

Craig Loeber:

The coworking, today, is not a fad. I think there are fad components of it, but what coworking today is really illuminating is a new approach and a new appetite from occupiers, and users, individuals, in the way they view their workplace, and the way that they get their portfolio, and the way that they interact with that, and the way that the workplace is meant to work and best support and enhance the overall productivity and output of individuals and employees.

Mike:

We're going to get more into the details of that. Before we do, Craig, my audience likes to get to know a little bit of the personal side of my guests. My favorite question is about music. What are you listening to, Craig? What gets you fired up?

Craig Loeber:

Oh man, I'm all over the place. I'm a huge music fan. I've never played an instrument, which I always regret. It's one of my immediate to-do's whenever I have some free time.

Mike:

Well, I played a trumpet, but that doesn't really do me much good in the love of rock music.

Craig Loeber:

Well, you could mix it up to get it a little hybrid.

Mike:

Yeah, that's true.

Craig Loeber:

Yeah, no, I mean, it's always put a huge role in my life. I think my Spotify account probably knows me better than anybody else on the planet.

Mike:

Exactly. Exactly. Mine too.

Craig Loeber:

If the robots are coming, they can't be all that bad.

Mike:

That's the one really practical use of AI I've seen is the Spotify year-end summary.

Craig Loeber:

Man, I cannot live without it.

Mike:

Picture into our soul. Right. What's you really been doing? If you had to pick one type of music, what would it be?

Craig Loeber:

If I had to pick one genre, it has to be electronic music.

Mike:

Yeah. Okay. EDM, right?

Craig Loeber:

Yeah, I think other genres tend to stick to a certain kind of suite of instruments or sounds, but electronic tools today have gotten so advanced that production's really only limited by an artist's creativity and imagination. I think it's created this incredible pool of producers putting out an insane amount of content.

Mike:

I'm dating myself, but we talking about David Guetta and Tiesto? Those are more pop producers.

Craig Loeber:

Yeah. Back in the day, I listened to a lot of house music, a lot of-

Mike:

Swedish Mafia. What is it called?

Craig Loeber:

Swedish House Mafia.

Mike:

Don't you worry, don't you worry, child.

Craig Loeber:

Yeah, that was the classic.

Mike:

Heaven's got a plan for you. Give me the beat, Craig.

Craig Loeber:

Da-da-da.

Mike:

There you go. A little edition of EDM podcast karaoke.

Craig Loeber:

Can't do it justice.

Mike:

Good stuff. Well, how about this? We like to inspire our audience as well. Do you have a motivational quote you could share?

Craig Loeber:

Yeah. I've got... Give you two, actually.

Mike:

Cool.

Craig Loeber:

One that's more personal and one I think is more applicable to the industry and what we might talk about today. The first one for me is from an author named Brene Brown, who really, really interesting, talks a lot about vulnerability and openness to perspectives. She says, "Strong back, soft front, wild heart." I think that's, for me at least, it's really relevant. It stays in front of mind that have the integrity to maintain your values, but be open to things in front of you. The wild heart component is not just be open, but be voracious on how you go and seek new, outlooks new opinions. But then, have the strong back to interpret those as you see them.

Mike:

I love it. That's what Workplace Innovators need to be.

Craig Loeber:

Hope so.

Mike:

That's great. Perfect for the audience.

Craig Loeber:

Yeah. The second one, which is something that I think about a lot, but I think it's very relevant to the conversation today, and especially in the flexible workplace and coworking world, is from Bill Clinton. And he says, "Follow the trend lines, not the headlines."

Mike:

Ah, interesting.

Craig Loeber:

There's a lot of headlines today, but the underlying trend lines I think are driving towards why the heck we're even talking about coworking to begin with. I mean, 10 years ago, this wasn't even a concept. And so, there's clearly something underneath that's happening. Obviously, there's immediate questions to be answered from a market investment perspective, but underlying I think it's going nowhere but forward.

Mike:

Absolutely. We talk about it on the show all the time, these culture shifts, the way people want to work the different perspectives and expectations of occupants of facilities today. When it comes to flexible space, first of all, define coworking for me and flexible space. We don't want to conflate terms. Let's start with flexible space. That's the broadest of these terms, right?

Craig Loeber:

It is. Yeah. The reason companies today are leveraging flexibility is a lot different than the reason that they leveraged them in the '80s, '90s, and early 2000s, where your executive suites were the primary supply of flexible space. They were really used for traveling executives, small field teams on short term projects, and the occasional swing space. That is drastically changing today. I think that's one of the underlying trend lines that should be focused on is, why are companies evolving and expanding their use of flexibility beyond just short term fixes? At the end of the day, what it boils down to is technological advancements over the last 10 years. You talk about what happened with the iPhone when it came out in '07, and then cloud computing and how it's completely untethered us from our desk. That's had profound implications on the way companies and individuals approach and view their real estate.

Mike:

So there's definitely a growing demand for flexible spaces, whether you're a startup or a big company like Google, but coworking is just a part of that. That's a product in this workplace as a service industry. Is that right?

Craig Loeber:

It is, yeah. I think one of the reasons that you see a lot of larger 1400, 1500, companies in coworking spaces today, and again those coworking spaces and the fixed infrastructure in those spaces are really optimized for your sub-20 head count user, the reason that they're fitting themselves into those spaces today is because they have immediate business needs for limited contention liabilities, maximized agility. There's, in the core real estate and commercial real estate landscape, there are a few other options that can meet those immediate needs.

Mike:

You told me earlier, Craig, that CommonGrounds is really not looking at that as a product in a vacuum, but it's part of a wider ecosystem. What did you mean by that?

Craig Loeber:

Yeah. Yeah. I think one of the biggest differentiators for us at CommonGrounds is our entire leadership bench, our investor base, and much of the talent that we're bringing into our company comes from the commercial and corporate real estate backgrounds. Now our CEO ran portfolios for Cigna, and Unity, and Nike. Our president ran 30 million square feet of office portfolio over his career. Our investor base has been co-investing and developing real estate for decades together. As you said, we're looking at coworking not as a product in a vacuum, a couple of floors on a building where an operator puts the walls up, it goes out and grabbed as many clients, as many members as they can, and really keep them close to the chest. We understand that flexible space is a component of Fortune 1500 and fast growth portfolios today, and that over the next couple of years, if it's not happening already, those companies that are looking to transition a percentage of their portfolio into flexible space.

            It's because whether you're a two man startup or Google today, industries are moving so much more quickly and competitive sets are exponentially more diverse today that you're not making the 7 to 10 year projections like you did in much of the 20th century. Those planning horizons are really reducing from 7 to 10 years to 18 to 36 months. That is fundamentally misaligned with the way that the traditional office ecosystem has developed.

            Now, we would never say that flexibility or flexible space will become 100% of real estate portfolios, and we'll totally take over the office inventory. Absolutely not. Term space probably will always be the vast majority of a corporate real estate portfolio. I don't think it's out of the question to say that, at least over the next economic cycle, companies will transition 15%, 20%, 30% of their portfolio from term space to flexible.

Mike:

Interesting. Yeah, that's exactly what I have been observing. It's fascinating to watch this disruptive trend. You've told me earlier that technology is a big part of this trend. Obviously, the mobility we have with technology today allows this more flexible approach. What are the big tech tools or trends that you see really having a significant impact on the occupants of these spaces today?

Craig Loeber:

I think that the technology that will have the greatest impact on the workplace of the future, and that is the tools that will be most valuable, are those that directly contribute to the individual employee's ability to produce. I think those tech tools that enhance productivity or remove friction from the day are the ones that are going to be the most valuable moving forward.

Mike:

I love it. Frictionless experiences, Craig. That's what it's all about.

Craig Loeber:

Yeah. If you can do that, if a tool can do that, the compounding value it has for an organization, for an occupier, is massive. Those organizations are willing to pay for it, because of what it can do for their overall organization, for their overall output.

Mike:

Agreed. I think that's what we expect, right? It's about anticipating the needs of our employees and understanding that we all want to have that same experience with technology we have in our personal lives in our workplaces. Is that right?

Craig Loeber:

It is. I had a really eye opening conversation recently with global head of real estate for a Fortune five company. I was giving him the pitch of the value of flexible space and its ability to minimize liabilities, maximize his corporate agility. He politely listened to the whole spiel, but then stopped me at the end and said, "Craig, those cost savings are nice and they're important, but tell me how your environments are going to make my people more productive."

            From a balance sheet perspective, if you compare the X percentage of savings that you can get from flexible space and from the liability side against the total potential value on the asset side of an employee base that's operating in maximum efficiency and where a workplace and the technology layered over top of it is directly contributing to and enhancing that productivity, there's really no comparison, right? I mean, the asset side numbers are enormous. That's where I think the heads of real estate, the heads of people and culture, and CFOs of the more progressive companies are really focusing in this tech tool and workplace conversation in the portfolio. I think that's a really exciting shift for industry, because it unlocks the opportunity to add tremendous untold value where it didn't really exist or wasn't really a piece of the conversation maybe 10 or 15 years ago.

Mike:

Exactly. I can't agree with you more. It's the impact on people in the [inaudible] environment. We have this great opportunity, as workplace leaders, to affect change and really build the value of our operations team as well as our employee experience initiatives. The reason this is important, Craig, obviously has to do with the war for talent, right?

Craig Loeber:

Yeah. I think talent attraction and retention is... It's obviously front of mind for any C-suite executive today. The role and the ability of the workplace to support and enhance that executive or that leadership team's ability to win that war for talent is more front and center than it used to be. I think because we can work anytime, anywhere, and that ability is no longer a perk, it's an expectation, the companies that can deliver that laundry list of relevant workplace products and services from which an individual employee and a team can pick and choose from unique to them, and that best supports their ability to produce, are the ones that are going to be the most sought after places to work.

            You look at all the FAANG companies and your more progressive Fortune 1500s, all of the workplace environments in those organizations are ones where I can be at the corporate office a couple days a week. I can work from home when I need to. I can work from a shared office. I can work from my favorite park across the street. I can work from the bench at my daughter's soccer practice. On top of that, I have the technology and tools layered in that enable me to seamlessly travel between those environments. And then crucially, it's an organization and a culture that promotes the ability to do that, but that also has the integrity to have their core values and rules established around how you use that, to which everybody buys into.

Mike:

Excellent. Really great stuff. Wow. Time goes by way too fast. Craig, can't thank you enough for being on the Workplace Innovator podcast.

Craig Loeber:

Mike, really appreciate it. Take care.

Mike:

There you have it everybody. Craig Loeber of CommonGrounds Workplace, helping me better understand the state of the real estate industry, especially as it relates to flexible space, coworking, and workplace as a service. I really appreciated my time with Craig. We talked for much longer than what I can share with you here in the confines of this podcast episode. I really appreciated his perspective, because it is easy to get caught up in the headlines today. I think that, as Craig said, the broader trend towards the need for flexible space is one that's going to be around for a long time to come.

            I hope this episode was valuable to you. If you want to reach Craig, I've left a link in the show notes for you to get in touch with him. Certainly, feel free to reach out to me with any of your comments. I always love to hear from you. I will look forward to seeing some of you next week as I head to Phoenix for IFMA's World Workplace. And then, the week after on to Orange County, Anaheim Convention Center, for the Corenet Global Summit. I can't wait to see some of you at these great industry events coming up. I also hope you'll continue to join me each and every week here as we come together on this show to inspire and encourage you to be a workplace innovator. Peace out.

            You've been listening to the Workplace Innovator podcast. I hope you found this discussion beneficial as we work together to build partnerships that lead to innovative workplace solutions. For more information about how iOFFICE can help you create an employee centric workspace by delivering digital technology that enhances the employee experience visit iofficecorp.com.