Dave Cairns: Arbitrage, Asset Class, Asynchronous, As-A-Service | Work 20XX #11

Dave Cairns: Arbitrage, Asset Class, Asynchronous, As-A-Service | Work 20XX with Jeff Frick Ep11

English Transcript

Cold Open
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All right, we’ll count it down in 3... 2...

Jeff Frick:
Hey, Welcome back everybody. Jeff Frick here, coming to you from the home studio for another episode of Work 20XX. And I'm excited to have this next guest. You know, we've been having all kinds of experts from the field. This guy is an expert in the real estate field, but he came at it from a very, very different industry. And since he's kind of an outsider, he's kind of roiling things. So he's got a senior executive position, but he's not necessarily taken the typical senior executive route. So let's welcome in all the way from Prince Edward Island through the magic of the Internet. He’s Dave Cairns, the SVP of Office Leasing for CBRE Canada. Dave, great to see you.

Dave Cairns:
Jeff. Thank you. I always find it interesting when people do my intro because I feel like I'm in a constant identity crisis. And so every time someone introduces me, I get a new flavor of what the fuck is going on.

Jeff Frick:
Yeah, but you know, you're senior vice president, so that's legit. I mean, you used to be in Toronto, you wore a suit every day in Toronto. You went to the office every day in Toronto, obviously Toronto, the biggest city in Canada. And now you're out. Still doing your job. Your title hasn't changed, but you know, you're not in Toronto anymore. So I think It's really interesting because you bring a lot of things to this business I think In the role and the way in which you approach it that are probably very different than a lot of your peers that you met when you first joined. Well, let's jump in, right, and get to the crux of it. I had Julie Whelan on a while ago, talked about the Occupier survey. And even then, a lot of people have said, you know, that based on sensor data and this and that before COVID occupancy and kind of traditional office downtown real estate was like 40% anyway between people being at conferences or customers or vacation or whatever. So it's a little bit of a flux ever since we got back from summer, you know, kind of the return to office mandates have come. The big one was Apple here in the States with Labor Day. More recently, Amazon is in the news with their return to office. So we're still in this kind of state of flux as people are trying to figure it out. You're a huge proponent, way out front, leading the charge around kind of next-gen commercial real estate for businesses, which is real estate as-a-service, office-as-a-service, space-as-a-service, flex space, or whatever the right words are. Why don't we start there? Kind of, How did you come to that conclusion? And then, How did you decide that, you know, I'm going to embrace this change versus being scared to death of it and try to lock up all my old clients in big long leases they can’t get out of?

Dave Cairns:
Yeah, well, you know, I think that when I got into the real estate industry, the technology sector in Toronto was starting to boom. You know, as a, Canada, as a sort of immigration hub in the world. It's still, you know, in Toronto specifically is bringing in something like 150,000 people a year, which in comparison to the size of the population is something that from a housing point of view, we can't even accommodate. And a lot of that is being driven by the low cost of real estate for businesses and then the lower cost of talent by comparison with the exchange rate, you know, by example, to the U.S. but a high, high skilled labor force that's there. So those are the sort of drivers of bringing that that have made the technology sector what it is in Toronto right now, which is probably, I mean, whether we're actually ranked number one in the world, we've been in the top 1, 2, or 3 for the last like sort of 4 or 5 years running. And I would sort of almost say that even if we're not ranked number one, Toronto, I'd say we in the proverbial sense because I don't live there anymore, but it's where I do a lot of business. You know, that's probably been a huge shaper for me in the way that I look at real estate, because especially when you add to it, when I came into the industry, which was around 2012, you know, this was when we started to see the, you know, at the infancy stages, the types of technology tools that are out there that have kind of reshaped the world, you know, really accelerate. Like Spotify becomes a big business in 2011, Uber, you know, like what are the other big, you know, as-a-service businesses that are out there, Airbnb, you know, social media platforms like Instagram becoming mainstream right, right. You know, moving in that sort of like Facebook like it's just you know, little cliques and groups to like this is a global phenomenon kind of thing. So I feel that all of those forces are very relevant to my perspective, other than my own personal experience, which we'll get to later. But what I started to experience was working with organizations that were not really thinking in the same way that their predecessors within the technology sector did with respect to real estate. This notion of like, start a company, have an office was already something that founders were poking holes in. You know, they were like this notably this idea of like, okay so I start a company and you want me to sign a five year lease when I'm taking a thousand square feet for my startup, Like, I don't even know what I'm doing tomorrow. Like, how in the world am I signing a lease for five years, Right? So I think that a lot of people in the real estate industry that I was learning from, they were not really experiencing that shockwave of in the same way that young people sort of circa 2012 were because they had already built their client bases, they had already moved up the stream to work with larger companies, which are naturally making bigger and longer real estate decisions, which is still a thing today. Right? Right. You get into the startup world, you know, you start to really see what's happening around the edges. Like just to give a juxtaposition, Yesterday, an article came out that I made a post about that said, The war on Work from Anywhere is happening or I forget exactly what the words were. But what they were basically explaining was that it's really, like top talent has always driven the way that we work. And back in the early 2000s, you know, folks that didn't have gray hair like you have right now, that we're using BlackBerrys to access email on their phones. That was a novel and not, you know, inclusively available notion or idea like it was sort of like only for the privileged few.

Jeff Frick:
Right. Right.

Dave Cairns:
But ultimately it became mainstream. And it's reshaped a lot of the ways in which organizations from a company level work. And it's all about, you know, the let's just say, the mobile device untethering us from a desk, whether we untether ourselves into other places within an urban environment or within an office building, the point is we don't have to physically sit there to pick up the phone and whatever. Right. So. Right. All of these forces just had me coming in at a time when I think the as-a-service world in a consumer context was really making its sort of foray into becoming commonplace. And that was starting to have business leaders question the notion of an office.

Jeff Frick:
You know, it's interesting.

Dave Cairns
Fast forward, you go ahead.

Jeff Frick:
I was going to say the other things that happened about that same time frame right, is not only did you have to lease that 5-year office, but you had to buy a Sun box to stick in it, a server to run, and you had to go buy an expensive Oracle database and you had to spend all this money in infrastructure before you wrote your first line of code.

Dave Cairns:
Right? It's pre cloud.

Jeff Frick:
So that's a big one. I think in terms of the, I think you mentioned a lot of commercial, or excuse me, consumer brands but I think the one that really gets the credit or should is Salesforce in terms of driving a real enterprise class in terms of the application, it's your revenue and your sales to put that as, to a cloud-based application, I think that was a really a significant moment in time in terms of adoption and then, you know, you have things like Box and stuff where suddenly you've got, you know, kind of enterprise stuff that's out in this cloud. And then the last one, you kind of touched on it and that's wireless. And really, you know, finally, when the speed of the networks and speed of our devices, you know can untether us, it is funny, talking to Ryan Anderson from Herman Miller (MillerKnoll), he says, you know, when he first learned how to design offices, he started with the cables. You know, here's the power drops and here's the network runs. And now you start the build out from there. And at the very, very end, you put the people in where the chairs happened to be kind of connected to where the computers are, that are connected to the wires, that are connected to the network. You know, it's really, you know, I think that's the thing this ultimate untethering is here.

Dave Cairns:
It's so funny you say that because like I remember learning from senior executives in real estate about like making sure to negotiate into a lease, a no restoration provision for wiring and cabling at the end of that five year term or ten year term or whatever. And like it's no, it's, it's less and less a factor in the as-a-service real estate world because why on earth would you be negotiating a no restoration provision on something that you're just using as a service.

Jeff Frick:
Right.

Dave Cairns:
So yeah, like just you're getting me to peel back the layers, but, you know, not coincidentally, probably around 2009, Adam Neumann formed WeWork, which had a different name at the time that I kind of forget, but it's, I don't think at all actually coincidental that, you know, as-a-service real estate would be an idea that would form roughly around the same time as all these other as-a-service businesses that's kind of really off the back, like drafting off of that movement.

Jeff Frick:
Right, Right.

Dave Cairns:
And so what Adam Neumann did and it didn't really become obvious to people in the commercial real estate industry on average until probably just before the pandemic. But for me, because I was really inquisitive about this kind of stuff, it became a little more obvious a few years earlier, roughly around 2016, 2017 was when I started to pay attention to it. Yeah, and so

Jeff Frick:
It’s interesting, because certain brands, right. Become the catalysts of the change. Because I happen to know because I had a friend that worked in a Regis. He didn't work for Regis, he I forget where his company was and I met him one time. He's like, Meet me at the Regis. I'm like, What's a Regis? You know, it's it's a rental office place. I'm like, All right, that's cool. It was low key, nobody knew about it, it's been around forever. And it's kind of like what's happening with ChatGPT now, right? AI’s been around for a while, but it's weird how suddenly these catalyst events kind of blow up the news and bring it to a group of people that didn't really think about a recommendation engine on your on Netflix is kind of applied AI.

Dave Cairns:
Know for sure and you know no knock on Regis but what they were serving was a very granular business center focused need for like, there was no there was nothing that was consumer branded about it in the way that we align with brands in our lives.

Jeff Frick:
Right.

Dave Cairns:
Whether it's Red Bull, Nike, you know, I think that you get the point, right. So WeWork did that. And what I think happened after that is what they did is they exposed that office buildings in the way that they're conventionally offered have more risk than may meet the eye because what a company is now going to increasingly seek is lease flexibility and what the end users of that building are going to want more than anything is a whole suite of hospitality and technology services that are à la carte and available on demand. And so that kicked off this explosive growth of WeWork. These broader forces, which, you know, the investors behind WeWork were, it was really more the way in which WeWork was invested in, i.e. like pure venture capital, that was a problem because they were still in a lease arbitrage model.

Jeff Frick:
Right.

Dave Cairns:
But they were trying to package themselves up as if they were a high multiple technology company when in reality there was really more of an arbitrage on rent. So that business model, you know, got blown up as they attempted to go public. But it didn't change the fact that the sentiments around how the space would be used would really change forever. And then the pandemic happened. And like we can take a pregnant pause here because there's a lot to unpack from there.

Jeff Frick:
Right.

Dave Cairns:
But it's accelerated and disrupted a whole bunch of shit.

Jeff Frick:
Right, but even before we get there, right. Another trend, and this is something that Julie brought up and you've talked about it and you just talked about it a little bit briefly is the way that the structure of the financing is for these big buildings, which has been historically determined by the creditworthiness of your long tenant, that hopefully you have like an insurance company that's been around for 120 years and is going to be around for another. What's interesting is right corporate time in the Fortune 500 is collapsing significantly, right? The great companies of today aren't necessarily going to be the great companies of tomorrow. And I think it's interesting to hear, as you just said, How do, how does the valuation metrics begin to change to support the financing for multiple types of services or shared services versus kind of the traditional, you got a great, you got a great, because to right, then landlord didn't really have to invest a lot because everyone just kind of walked away, it was 40% occupancy and nobody really cared too much.

Dave Cairns:
Well, you touched on something really relevant, actually, which is sort of like even just on average the lifespan of an organization like commercial real estate is still pretty old in the sense that like, You know, God, I'm sure in London, England, in the fifties and sixties and seventies, like, you know, somebody who took a thousand square feet might have signed a 25-year lease because it was like, Well, I'm starting my business and like, I'll be here in 25 years. You know, you can go look at the public markets and see that the average lifespan of a public company has shrunk dramatically over the last, like from 1950 to today. So in a sense actually real estate needs to respond to the changing profile and duration of even the life of an organization. But it hasn't had to do it yet because when you look at the makeup of big, you know, financial districts, whether it's New York City or Toronto or wherever, you know, the majority of the supply in the downtown nodes is comprised of the largest institutional banks, the largest consulting firms, and law firms. And we're still living in a world where those companies make up, whatever, 30%, 40% of inventory of office space in the downtown core market, and then the rest of it is filled in by every other sector and every other size. But that profile is likely to continue to shift, and it does put more pressure on valuation methodology and exposes the inherent problems that it has. You know, there's a guy who you should get on who has nowhere close to the following that he should. His name is Sam Gamble. He's a close friend of mine and he has written a lot about really the mismatch of supply and demand from a valuation perspective. But yeah, in short, you covered it. But I'd love to give an anecdotal example that Sam provided in an article. I'm probably going to butcher it, but I'll do my best. But yeah, what we have here is. We have companies that are looking for lease flexibility and we have people that are looking for more service. And we have a valuation community that and a financing community that wants, you know, the Canadian Imperial Bank of Commerce or Royal Bank of Canada for 20 years when that's just not even the way that even the banks are doing things now. You know, the banks are dramatically downsizing. And so I think that the rubber will hit the road there over the next five years, roughly as a lot of leases expire. And what was already happening, which is a huge downsizing. Like just to give a global example, Standard Chartered Bank. Which is one of the largest financial institutions in the world. Headquartered in Singapore. Has been public that they have the. In 2021, I think, they came out that they had the objective of downsizing their global portfolio by 40%. You know, that's tens of millions of square feet of office space that they're going to get back. That's a pre-pandemic thing.

Jeff Frick:
Right. Right. Add to it, which you already highlighted, which was the utilization of office was already about 50% of where it should have been in the first place. You know, now we're really talking when we say we're 50% back, we're really 25% of 100%. So, you know, office utilization is really, really underperforming, even if we, you know, consider, you know, now return to office is a win.

Dave Cairns:
It's not a win for the asset class.

Jeff Frick:
Right. Right. What is kind of my point. Yeah, let’s shift gears and talk about the asset class because one of the things you highlight in a lot of your writing, is this like bring it back to the end user experience. You know, that's why, you know, WeWork made a difference. Ultimately, it does matter what is the end user experience and you know, kind of the specialty spaces and shared spaces. I think one of your podcasts you said, you know, every building should have a podcast studio that everybody else in the building can use. Of course, it should. And you know, Steve Todd from Nasdaq had a great interview where he talked about, you know, some of the teams at Nasdaq, where he let them use third party space and shared space. But he had them always report what they're using it for. And he said, you know, some really clear patterns, if it's isolated work, I want something close to home for focus work so I don't have to commute. If it's team collaboration, how about a transit hub where we can all get to the same place at the same time and then go home? And then he said, You know, if it's a showcase customer, executive briefing center, etc., you know, You want that premium beautiful downtown space with the high ceilings and the fancy fixtures. So it's interesting. And I know you work with a lot of suppliers that are trying to bring these kinds of various portfolio of activity-based spaces within their realm. Wonder if you can speak to how that's working on the supply side and then also how it's being received on the user side as well.

Dave Cairns:
Yeah, Well, shout out to Steve Todd. That guy is a forward-thinking individual. And if every corporate real estate executive thought like him, there would be a lot more pressure on the supply side to actually change. But I think it warrants saying with humility and respect because I appreciate it's a really difficult pursuit that a lot of companies are actually standing in their way, like the square foot that they don't lease is probably the best square foot that they could do something with because it continues to put more pressure on the supply side. But, you know, in short, what has been happening that is now shifting for the better is landlords historically were really only willing to give a flex space operator a sliver of the building, you know, so if the building is 100,000 square feet, they would say, you know, you can have ten or 20,000 square feet, do with it what you want, and, you know, we’ll either lease it to you or, you know, profit-sharing and management agreements were less common before the pandemic. But regardless of the structure of the deal between the operator and the landlord, it was just sort of like, you know, here's your sliver. We deal with the rest. What's been exposed is that there's a misalignment there that just doesn't work anymore, which is, first of all, if the landlord does that to the operator, well, then the operator has to do everything in their power to make commercial sense out of that little pocket. They can't think of the whole building and what it should look like holistically as a lease-up and retention tool for the asset. They are forced into maximizing the revenue opportunity of that envelope that they've been given. But what we're seeing now is that landlords need to really think of space as-a-service, as a lease-up and retention strategy from an asset level, and that now changes really the nature of the agreement that you're even going to be contemplating. It's more of a partnership similar to, you know, a real estate developer in the hotel sector and a branded operator like a Marriott, it that looks more like that than it does the typical lease. And that is fundamentally the shift that needs to happen because when you do it that way, you can really work with existing tenants or you can work off of other examples in the world that makes sense as those continue to evolve and change. And you can build a model that has all of the elements of space as-a-service that are required, you know, both physical design of space and all of the different layers of hospitality, technology, and service that are required to make that place a vibrant community for those that are going to use it. That's really new. And we're really only starting to see those types of transactions take shape now. And to go to Sam's example, what he talked about basically this arbitrage opportunity where, you know, right now there's the opportunity to acquire real estate that's distressed.

Jeff Frick:
Right.

Dave Cairns:
And if you hold the long-term view that you believe the capital market side of the business will actually catch up and start to value these shorter-term cash flows in the way that they should be, you know, dynamic pricing and whatever. In theory, those assets should be worth a shit ton more than a conventional lease because they're going to be driving way higher revenue from the asset than the typical lease would. And now it creates a bigger division between success and failure, obviously.

Jeff Frick:
Right.

Dave Cairns:
You know, if you're if you're selling in the hotel sector by the night and you suck, you know, you're going to have a big problem. But if you're knocking it out of the park, you know you're killing it, Right? So the notion that he had was like, if you can see around the corner, you can buy a lot of distressed real estate. If you're well capitalized, you could actually carry it forward without selling it and be ready. And having had created the full stack product that the world of the future wants before everybody else is now scrambling to catch up. Because you know, where we are now is that big landlords with deep pockets are willing to put money in to trying to build space as-a-service within an asset. But the issue is that, you know, a lot of it's already leased. They can't really do it from the ground up and reinvent the way they offer space.

Jeff Frick:
Right.

Dave Cairns:
But there exists this opportunity kind of now and into the future to take these distressed buildings that do make viable sense and build them from the ground up. And so the question will become, will we start to see investor profiles in the commercial real estate sector that are atypical of what we see now that have a higher risk profile and have a longer-term view, etc.? Or do they come over from like the hotel or the restaurant business where, you know, you talk often it goes back to the experience of the person in the building, right? It's your customers, customers, customers who ultimately come in and do whatever.

Jeff Frick:
And, you know, and you just mentioned hotel as you know, as an alternate way with quick turning leases, if you will. Many leases for the person that are staying there and the different type of business arrangement, which I think you've also said a few times people are just lazy, right? These are a little bit more complicated, these are a little bit more dynamic. So it takes a little bit more investment, but it seems like there's a lot to learn from restaurants in terms of fashion and experience. It seems like there's a lot to learn from hotels in terms of really differentiating, and it also seems like a lot of hotel-like services hospitality, entertainment, collaboration space. One of my favorite quotes, right, is...That onsite is the new off-site. So do you have a specific agenda? Do you have something that you're trying to get done? Do you have the whole day planned out? You have mixers and you know all the things that you would do in an offsite have those facilities. You know, they're at the office so that you can use them because you know you can't do that at home.

Dave Cairns:
No, I'm with you. And so, you know, you actually so I talked about the supply side there, but just to round it out. So I'd love to bring up a hotel example that I think is really great. They're called the Hoxton Hotels and they're based out of London, England. They're also in New York City, and they've now created this product called ‘Working From’, which is meant to be working from the Hoxton. And so it's a true co-working space. They're not really, I don't believe going after like Salesforce for an enterprise floor or anything like that, but they now are actually their hotel acquisition model is literally built off of their co-working, interestingly enough. And they'll do like they'll do really cool things, like they'll put themselves in a market like Brooklyn, like in a cool borough of Brooklyn or something like that. You know, that's a classic work near home solution for a Brooklyn-based person who would pay for a membership, even though they got their apartment down the street. It's obviously got a transient opportunity from people that are coming in and out of town for business or whatever. You get the point multiple, multiple customer profiles, but they do really interesting things that are just nice touches as a customer that you never get from an office building. So they'll let you They'll basically let you work from the co-working space and if you're still around, they're like 10:00 at night and you want a room, they'll sell it to you for like 25% of the price or something like that. So, like, you know, you can think of many, many permutations of that kind of hospitality-led service and just layering on added conveniences or services.

Jeff Frick:
Right.

Dave Cairns:
Like this is what end users are ultimately looking for. We're witnessing a shift in like a new avatar of an employee which is really almost like a corporate freelancer. And I should give some credit where credit is due on that. Two gentlemen have started a company called Together. It's meant to sound that way. It's meant to have that Irish twang to it ‘together’. I got him, Alex Sweeney and Denis McGowan who, both of them at one time worked at Standard Chartered Bank, and they're now working on a startup idea together. And, you know, they've come up with this definition. Many definitions have been thrown out there, but I really like it. The corporate freelancer, which is the person who wants the job security and the togetherness of working with a team rather than being a gig worker, but somebody who wants to be afforded the personal freedoms and autonomy that a gig worker might have, and be able to work from anywhere, so to speak. So, you know, we witnessed a shift like that. I think you just see that these working from Hoxton examples, they make a lot more sense. And to go back to Steve Todd's example, you know, I think it's fantastic that a large employer that would be arguably more traditional would give that level of autonomy to their workforce because that's actually going to increase productivity. It's going to increase retention long term, it's going to increase engagement, and it's going to help them downsize the real estate that they don't need. That's just dead in the water.

Jeff Frick:
Right, right.

Dave Cairns:
It's going to help them re-up on what they know they need backed by data. And so there aren't enough large companies that are doing what Steve Todd’s doing the things that.

Jeff Frick:
He's amazing, that interview, he's just like, you know, why did you go there? You know, why didn't you go to another place? You know, And it really, for him, as a data collection opportunity to your point to make smarter investments down the road far outweighs, you know, the little bit of an expense for somebody swiping a credit card for an hour at their local place. Very cool.

Jeff Frick:
Well, let's shift gears a little bit and talk about something that comes up in all your interviews, your gambling, your gambling chapter of your life and, you know, you were a professional gambler for years and years and years. Right? Four, five, six years.

Dave Cairns:
Yeah.

Jeff Frick: And you talk about it, and I'm not going to have you repeat the whole story, but I want to highlight a couple of things, though, that I've heard in you telling the story of your gambling time. The first one is kind of this concept, I think for older people that aren’t really Gronking maybe is just digital, and digital worlds, digital communities, digital relationships, because you talked about most of your professional gambling was done in online games versus showing up in Las Vegas at a tournament. And you know, online dating has been around for a long time. Young people are very used to connecting, and you can connect pretty intimately online. I wonder if you can share the contrast between, you know, kind of the online community and how that was real and then what it introduces in terms of scale and you being able to shape your career based on a digital world vs you know, the limited opportunities that you might have around a physical, you know, number of tournaments you could play.

Dave Cairns:
Yeah, yeah, yeah. Well, I'll start by saying I think that we're moving along a continuum to more people becoming digitally native. And I'm going to give a shout out to a guy named Eric Ginsburg, who I really like from Gensler, named Eric Ginsburg, who I started to share with him in a recent trip to Toronto, like how I work, how I view the world, etc. And he reminded me that I'm not common and that having the degree of digitally native understanding that I have is rare even in a lot of instances among young people. And so I want to just preface what I'm about to say to highlight that like I think we're moving in the direction of digital native education, becoming mainstream, but we're not there yet. And I think that that poses a lot of the problems and the tension and the friction that exists between, you know, employers and employees and, you know, how to train effectively like, you know, people like Darren Murph, who I think is the god of remote working and, you know, whatever distributed, working and future of work, you know, even being digitally native. When I watch that guy say stuff on LinkedIn, I'm like, Holy shit, I don't even know what the hell he's talking about. I got to go get educated on that. So I just really think it's important to explain that. So for me, I did grow up in a digital-first arena, whereby I learned, you know, to get into the live world in a meaningful way in poker, you almost have to start online. You have to kind of like, it became that dynamic where you start by cutting your teeth online, you learn the game through much cheaper games and higher volumes of being able to play because you can sit on two screens and, you know, play penny games if you want to, just to learn the ropes of the game and incrementally move up. So that's just sort of the way the game started to evolve. You almost were wasting your time going and sitting in a casino playing a two and $5 blind game, only playing, you know, 30 hands an hour when you could play three, 400, 500 hands an hour online and just, you know, absorb your improve your skills that much faster. But as far as like the community and the relationship building and the way in the nature of the whole thing, what was interesting is that there was no definition of like either remote or in-office or hybrid, like we were just existing within the world that we were existing within. And it just so happened that a lot of the like collaborating and the playing and the education and the strategizing and everything was done through digital platforms, whether it be discord channels, whether it be Skype for synchronous discussions and strategy or sweating other players is what we called it. When you would actually load up each other's games, be on Skype, on microphone together, talk through hands while they were happening in real time. You know, these were just normal activities for us. But they just happened to exist digitally because that was where most of our our work, quote unquote, was being done. But it also drove the live arena in a way that nobody could have ever predicted. What ended up happening is online poker boomed after this guy named Chris Moneymaker won the World Series of Poker in 2003. He was an amateur player with a coincidentally amazing name to market ‘Moneymaker’. And and, you know, they latched on to him like nothing else. And that just created this boom. And what ended up coincidentally happening after that is that the live arena exploded. It became where it used to be regionalized. You saw global brands that were running events all around the world like PokerStars, that were literally running tournaments globally from Russia to Europe to Canada to the U.S., Caribbean, like you name it. It became a global thing. And the size of that market became so much bigger, too. So I like to give that example because I actually believe that remote working is going to have the same impact on the world of working in real life. But I think what we have to accept is that where people do it may not necessarily fit the definition of what we call an office or an office building today. And I think that that's the highly disruptive element that is not even really being talked about. Like most of what we're talking about is, are we going to go to a conventional office and take it for ten years? Or are we going to go to a flex office and take it for one year? And how much service is involved? I'd actually argue that if the corporate freelancer becomes normal and it's an average persona for employees, that there's a whole wide variety of other places that they may go and they may get given a digital wallet to connect with one another or to be productive. And I'm just, I just want to point that out, though. I think that that's one of the bigger disruptors.

Jeff Frick:
I think for sure, know and what's weird is already happening with time. I mean, once we got email, it already happened with time. You didn't have to go to the office to get your mail, go to the office, stick it in your file cabinet. And I lived in the time you had to do that. You didn't have a cell phone. Fax was amazing. And so we already had it on the shifted time and people are working on their laptops. And for me, the really crazy thing was when I had my phone, excuse me, my son do an email sitting on the couch, I'm like, "You need to send an email to somebody." And he said, "Yeah," and I'm like, "Did you send it?" And he said, "Yeah, Dad, I sent them on my phone." Like, what? You sent an email on your phone. That's amazing. I mean, I remember that distinctly. Like you didn't get up and go to the computer to do your work. But I want to shift gears on another thing. Two things that you said about your time in the gambling world. And one is a great quote, you said, "In poker, it's expected that people will lie to you." And that's kind of the base operation besides the community part, when you're training together and helping each other out. But in the actual game, you said that's a little bit, you know, in the business world, you kind of have to sniff it out. But the other thing and the two might be tied together is that you said is to win, you had to make the bold move that you could play the stats, you could play the line, you would have success. But to actually win, to win every now and then, you have to do something a little squirrely and really the bold move. And I wonder if you could share kind of how that experience shaped you. And as you think about now in kind of disrupting this age-old industry that moves slow with big lumpy assets and you're in there banging around, you know, trying to help people, you know, go for the big win that maybe doesn't line up today. But I think it's going to, I think it's going to win tomorrow.

Dave Cairns:
You know, I haven't said that first line in a while. It's like almost, it's emotional, honestly, for me to hear because it brings up like so much of my life experience in a weird way. But I really believe it's shaped such a dichotomy in my experience between poker and the earlier phases of my professional life. Because poker, you know, there's a lot of negative sentiments around poker. You could say that there's, you know, misfits and people from the outskirts of society. And, you know, there's cheating and there's stealing and there's drugs, and there's this and that. And those are all true things. But also running in parallel to that is the most honest pursuit that I've ever been part of, which is that when you sit down with other players, there’s this inherent honesty to the fact that you know they're going to lie to you. There's a purity in that that is really rare in the human experience, and it's almost uniting in a way like it allows for this sense of camaraderie that I've only really quasi seen in golf. And I'm not really a golf fan by any means, but like that type of competitive pursuit that's just so brutal. And like, you know, one bounce just goes the wrong way and like, everything turns like poker is like that, too. And I was really struck by how profoundly toxic in a way the corporate world is in that. And I mean, look, it's the human experience, so I'm not trying to be too dramatic or anything. But like you get into these business situations, especially in a business like mine, which is 100% commission pursuit and like highly competitive environment, you know, you're in the middle of two parties that are each trying to go after their own best interests, not necessarily the others. In the best of situations, it's collaborative, but in the worst of situations, it's incredibly divisive. And I think that being able to suss out when somebody was lying was very useful to me in my career in real estate. It gave me a competitive advantage that I think a lot of people that were my age, roughly 25, they didn't have because they kind of transitioned from, you know, typical university sort of trajectory and into like early professional life where you get into administrative roles and whatever. I came into an administrative role having lived in this world of, you know, crazy gambling and people lying to me all the time. But at the same time, I still, to this day, you know, it hurts a little bit because I don't really like that. I don't like using my abilities to be manipulative as leverage. I’d way rather use them for good. But there are instances where you just have to protect your own best interests in business and knowing to suss out how people are lying to you is extremely useful. So that's, that's that piece. And then as far as, you know, having a loco factor or the crazy factor, yeah, you know, it depends on, again in every style of poker, there is always instances where you have to look at something in a vacuum. You know, in general, you want to make methodical decisions that are backed by data and pattern recognition because you're dealing in an incomplete picture, right? You know, the goal is, you start out a hand with no knowledge of what your opponent has. And as cards run out and people make bets, you're getting more information to interpret, you know, which helps you narrow down. You’re starting with a wide range of possibilities that somebody's going to have. And the goal is to narrow it down. And there are instances where you can literally narrow down to one hand, and that's when you know you can make a perfect decision. If you're like, I know what this person has, you know exactly what to do, call or fold or raise like, you know, But in most instances you're never going to know. It's going to always be some amount of imperfect. The picture that you have. But, and so that's, you know, the crazy factor is essentially like the classic saying from Rounders, the movie Rounders (1998), "Sometimes it just comes down to feel what's in your guts, right? You just have to decide sometimes this is this, you know, while this may not make sense on paper, intuitively, it's feeling right to me and I'm going to do it. And, you know, to really even bring it back to the digital native thing for a second, a lot of people, the most common thing that someone would say to me when I said I play poker online, literally, I can't even tell you how common it was. They would say like, "Oh really? Can you read people online? Like, how do you even read people online?" Right? And I would always have the same response. Well, you know, ultimately, you obviously can gain a lot of insight from someone's physical body in talking to them, but you can gain the most of what you're actually trying to pick up on is pattern recognition. You observe how they play over a period of time, and as you collect more data on how they're playing hand by hand by hand, you have a more complete picture of their persona as a player. So obviously you're thin slicing somebody the first time you play with them. But as you collect more data, you're making more decisions based on that than you are on their physical body because, you know, relying on someone's physical body, you better be damn sure that you're making that decision based on something you know definitively. Because if you're saying somebody twitches one way and you're calling that a tell, and it's not, you know, you'd be making a dumb decision, right? So like, to go back to the digital native thing, I think that's actually one of the things we're experiencing right now is that we have most cohorts out there have the same view of work that many people had about poker online. They just sort of assume that you cannot get the same outcomes out of it.

Jeff Frick:
Right.

Dave Cairns:
And on average, they're probably right because both sides that are interacting in this digital environment are not adequately skilled to do it. But you can if you have the right skills. And so I don't think it can't be done. I think it's just a matter of teaching people and then also having a willingness, right. Because there's resistance also like, you know, people that played live poker, that tried to get into online poker, but started out playing live, you know, older people basically, they would say the games were rigged, and the younger people would be like, Dude, they're not rigged. Like, it might seem like it's rigged because crazy shit happens when you're playing 300 hands an hour versus 30 hands an hour. You're basically just compressing the madness of your poker experience. So that's really, it's cognitive dissonance in your head, you know what I mean? Right? That's sort of like what we're dealing with, I think.

Jeff Frick:
All right. Well, let's shift gears. Before we leave the gambling, just everybody knows we're not endorsing gambling. Don't gamble. You can get yourself in a lot of trouble. Dial 1-800 Gamblers Anonymous (909) 931-9056 http://www.gamblersanonymous.org/, that's a whole different topic for another day. But I do think there's a really interesting parts about how you, you know, learn from that. And I do think there's some really interesting takeaways. But let's shift to kind of the last piece of the interview, and this is where you are now. And, you know, you talked about one of the interviews, you know, getting ready to do the professional thing and putting on your fancy clothes, and going into the office and kissing the baby too early in the morning and coming back after they went to bed, and ‘this is nuts’ and making this big decision to basically what you call being a ‘home-ad’ - pack everything up, move out to beyond, east of even the eastern time zone to Prince Edward Island and still have a senior vice president title from CBRE and basically doing business permanently in Toronto I believe. Tell us a little bit about that decision. How did you get there? What was kind of the big final tipping point, either positive or negative, and then, you know, how's it working out?

Dave Cairns:
Well, as I said in the beginning, I'm still having an ongoing identity crisis. So, you know, and I'll say it. I’ll say it, maybe to manifest the future outcome for me, I don't want to do exactly what I'm doing forever. So there's a flux to my life for sure. But as I bring that up to say, I was talking to my wife earlier today, and one of the things I really value about having independence around where I work is that I can spend a lot more time talking to the person that I chose to marry. So that's not a bad thing. I get to spend more time with her. But she said to me, she's like, You know, you just got so lucky to even have stumbled into the kind of job that you even had. In other words, one where it's 100% commission and you kind of could eat what you kill and work where you want to work. Because the reality is I had a hard time sitting at my desk. Even in my eight years of being office based, I was really seldomly ever at my desk, usually not even in the building. So that's just, like it's not in a sense, not a lot has changed, despite the fact that my location has changed. But I think that, it's, I bring that up to say that I've struggled always with what feels to me at least like constraints, working in a more rigid corporate environment and having expectations on me that are like, you need to be here this time and gone at this time. You know, when I worked as a sales assistant in my first year at the company, it was really difficult for me. I had to literally be at my desk. I even got into arguments with my manager where she was like, You know, you're not at your desk very often. You need to be there. And I'd be like, Well, is there a problem with my performance? And she'd say, No. And I said, Well then what is it that we're talking about? Like, if I don't have a performance issue, why does it matter where I... Talking about practice? I'm seated but like I say all this just to give some context, which is just to say that I've always had a hard time sitting still and I've had a hard time working in one place. But, you know, when the pandemic happened, it was a moment for both my wife and I. For me, at first, you know, independent of our own life together, I was just sort of I had turned off this digital nomad guy from poker just turned the guy off because there was no specific use for him. But then when the pandemic happened, I'm like, wait a minute, I've been here before. I've been digitally native. I know how to collaborate with people this way. Da Da DaDaDa And so I couldn't as as the time went on, and the years went by, because it's literally been years, I couldn't ignore that side of myself anymore again I was just basically reminded of what I enjoyed about digital independence, right? And so that started to change the way that I started looking at my life, which changed where I maybe wanted to reside. But on a personal front, my wife and I both just were finding that Toronto was not serving us anymore as a place to live. And there's a lot of personal reasons behind that. But at one point I was thinking of working at CBRE with a great colleague and friend of mine named Dan Harvey in San Francisco, and I did explore that. It just didn't work out from an immigration point of view. And at that point, my wife said to me, she's like Dave, we’ve got to get out of here. Like, it's not working. And like, don't call me crazy, but like, I want to move us to PEI (Prince Edward Island) and I know you've shut this down before, but like, why are, why wouldn't we move there? Jeff - right Dave - Like we like it's a place that we want to buy a vacation property and basically only spend a couple of months a year at. Like, it seems kind of ludicrous to do that when we could live there. Right? Right. And you know, who knows what's going to happen with your career? Da da da da da. Like we should put our life first if we don't have another option that makes more sense. So while it was hard for me, because it's kind of an identity crisis work wise to like, go and truly be a remote first worker and travel when needed for work in an industry that doesn't necessarily objectively accept that. That was tough for me, but I decided to do it.

Jeff Frick:
How was the conversation with the boss?

Dave Cairns:
Well, you know what? Actually, it went all right. I mean, you know, he did say to me, like, you know, go like, take care of your family first and, you know, do your thing. And if you, you know, if you need to change your direction, I'm sure you will. Now to give him credit. There's the credit. But the flip side of that coin is he doesn't pay me a salary. So, like.

Jeff Frick:
Right, right. As long as the commissions are coming in though right, he gets it. He gets a piece of it.

Dave Cairns: Yeah. And you know, quite honestly, even if they didn't, I just gave up a desk that they can give to somebody else. So, like, I don't cost the company anything, so it's really all on me, Right? So I think it's both, both elements which made my situation more fortunate than most people's. But to fast track to this digital nomad thing, what I kind of arrived at was we are unique, my wife and I, in the sense that we've moved to an unconventional place because of a pandemic set of learnings basically, in theory, we could have done this you know, I probably couldn't have done this in my first few years in the industry, but theoretically, if I wanted to spend the money to travel when I needed to, I could have done it. It would have strained my career. But it's not like it wouldn't have been possible. Right? So I call it a pandemic awakening that caused us to make this decision and move to a very unconventional place. As you said, I'm not even on mainland eastern Canada. I'm on an island and I find that that's not common even in the context of this conversation around the changing nature of working from anywhere. I don't, you don't see most people making a decision like ours. So I call it ‘home-ad’ though, because I have a daughter. She's got to go to school, she's got to go to dance class, swimming and all that stuff. I can't just move around the world. I have to have a home base right.

Jeff Frick:
Right.

Dave Cairns:
So my home base is an unconventional place, such as just like a digital nomad is unconventional. I'm a digital home-ad is where I came up with it.

Jeff Frick:
I love it, I love it. And, you know, there's a lot of conversations, too, about all these, you know, kind of second-order benefits. I take it back to cycling, which is, you know, good, good for your health, but it's also good for the environment, it's good for your mental health, it's good for infrastructure, is good for a whole bunch of stuff. And it's the same kind of situation where where you are now, you know, you get to spend time with your daughter, you post stuff with her all the time. Like said, you spend time with your wife, but also in your community and getting to know your community. You speak often of your neighbor across the street and being able to spend the time. And Darren Murph, who you mentioned you know that's one of his main motivators to you know, give people the time to spend energy on stuff they really care about and they're going to grow as a person, and give it to you back in spades at the work. But as we get ready to close here, Dave, I want to talk finally about kind of your publishing and really, you know, it's funny to almost everyone who everyone else who introduces you says, ‘Hey, you're all over LinkedIn’ you're the LinkedIn guy, you're Mr. Real Estate, LinkedIn. So I wonder if you can share a little bit how you got to, you know, kind of this publishing, writing kind of place both in terms of your career because a lot of it's about career stuff. but it's also personal and it's introspective and it's kind of this wrapping of Dave, the commercial real estate professional, Dave The home ad, Dave the dad, Dave, the husband, and Dave the wood splitter out on the island on the East Coast. So how did you get to the LinkedIn stuff and how are you finding it? How have people responded, both new people but also some of the old?

Dave Cairns:
The curmudgeons are just like, they leave me alone now. I think that they realize that, you know, they may have zero respect for me, but they don't try to silence my voice anymore. I mean, man, you tug on it all. It's a great closing question.I started out doing content on LinkedIn. I don't remember exactly when, maybe 2016 or 2017. At first, I just saw it as an opportunity to promote the technology sector as a way of helping, hopefully connecting myself further to them because that was my primary business development at the time. You know, I used to do these really, like, you should go find one of the man or something and embarrass the heck out of me. Like, I used to do these videos, sitting in the office wearing a suit, sitting in the downtown office, talking about like, how do you sublease an office and relocate at the same time without paying double rent? They were these, like, you know, educational videos for startup founders. So that was sort of the thing I was doing. Like pre-pandemic, probably sort of around 2018 and then sort of coming up to and in the pandemic, I decided to make a conscious choice to build a brand around the future of commercial real estate in the wake of it being, you know, upended by COVID and just coupled with the fact that I felt it would be a) insensitive to try to connect with most of my prospective customers about leases during the height of the pandemic And b) it felt like the definition of insanity because there was going to be no value to even be extracted from that. It would just be like getting up every day, Groundhog emailing people for nothing is what it felt like. So I said, for those reasons I said, let me just do a public journaling exercise here and start to like merge this digital nomad guy with this person who's been in corporate real estate for ten years and start to poke holes in the whole thing. And incrementally, day by day, it started to get like, you know, where I think at the beginning, like people in commercial real estate, you know, thought of me as like, you know, all of them thought of me as great. Eventually I think they thought I was putting out X-rated stuff that they wanted nothing to do with, that was offensive to the industry kind of thing. And I had some struggles there that I've gotten over, but I felt it important to just like... ...in pursuit of what I felt was, you know, the North Star of Truth, not that I'm right or that I have the right answers, but that I'm curious about what those right answers are and that I'm willing to put my neck on the line and talk about those things. And so that's been the evolution of the journey of my voice. And then really in the last year or so, you know, I've just really connected into a different part of myself, kind of really exactly what you mentioned about community and what Darren Murph values like one of the biggest unlocks I think that's out there for the world is to not untether people from desks, but untether them from synchronous workflows. Like, if you can teach people how to work asynchronously, you can allow them to be active participants in their family lives and they’re members of their community because they don't need to work on a fixed schedule.

Jeff Frick:
Right.

Dave Cairns:
And I'm fully self-aware that this is not possible for a huge number of people in the world, overwhelmingly more it's not possible for. But that doesn't mean it shouldn't be done for those that it is possible for. And so that's been the big eureka for me. Is that because I have full flexibility around my working hours, I've really become a different person in this whole pandemic, especially moving here and being a far more active participant in a smaller community. So I talk a lot about that now because it feels important.

Jeff Frick:
No, I think it's great. I had Adrienne Rowe on Workplace Professional. She's at Raytheon right now. She's been at Disney. She's been all over the place. And one of her comments was, you know, look at all the dads that drop off and pick up now, which didn't used to be there. It's good for dads. It's good for kids. You know, it's good for a whole lot of reasons. So again, kind of these second-order benefits that come from not sitting in your car getting angry to go do email in an office are just tremendous. I mean, there's so much more we didn't get to, we ran out of time. We didn't talk about sustainability, which again, is a huge thing in the real estate where all these people are making board pronouncements about trying to make changes in sustainability and one of the biggest levers that they have.....is the real estate portfolio to make a significant dent.

Dave Cairns:
Well, I know who you should invite on for that, a guy named Jeff Gwinnett at one of my clients and a woman that works with him, Anureet. They are hardcore long on sustainability and they eat, breathe, and sleep it. And if you want to bring them on, I'll even come on for the fun of it. You should invite them on to talk about that.

Jeff Frick:
Thank you. That's a good, good tip. So there's so much to do. I probably have to have you on again. I give you the last word before I let you go back to split some wood, pick up the girls, and lease a couple of big buildings in Toronto.

Dave Cairns:
Oh, I don't know, man. I just think that there's such an opportunity that lies beyond trying to pit remote work against offices. And to me, it really lies in this asynchronous, like learning how to be digitally native, learning how to be asynchronous. And I guess we know what's good about synchronous in-person interactions. We've all experienced it. But what a lot of people have not leaned into is building digitally native relationships beyond their own organization. Being the executive leader that champions these things and maybe stands, you know, on the firing line and says, "We need to do it differently." People can create empathetic connections with each other on the Internet. This is not a fictitious thing. We just maybe don't know what we don't know. Like, I would just love to see more open-mindedness around what's possible digitally and less discussion around what's negative about what's possible digitally or what the knock-on negative effects are. We can talk about all the negative knock-on effects of everything, till we're blue in the face, but that doesn't progress anything, whether it's in-person or digital or whatever, any conversation you want to pick, you want to talk about the shitty stuff that's not realistically going to get you anywhere good. So I think that there's just this massive opportunity out there. And it doesn't necessarily have to come at the expense of the commercial real estate industry. It just may come at the expense of the traditional models and the traditional thinkers.

Jeff Frick:
Well, that’s a great close, the traditional models and the traditional thinkers need to change. Dave, thank you. Thank you for your time today. Thanks for all your writing. I really enjoy participating in it. And it's a good study. I mean, for people that aren't sure how to do this, jump in on a LinkedIn community, find, figure out a couple. I challenge people who are the 200 most important people in your business. Maybe there's too many, 20, and start to engage them and don’t pretend to engage them.

Dave Cairns:
Yeah, I mean, you engage with me, I will engage back unless you're just a flat out asshole. I always respond, so.

Jeff Frick:
Well, thanks a lot, Dave. Appreciate it. And continued good success in your adventures up there.

Dave Cairns:
And this is a great conversation. I really enjoyed it.

Jeff Frick:
All right. He’s Dave, I'm Jeff, you're listening to Work 20XX. Thanks for listening in on the podcast and watching on YouTube. We'll see you next time. Thanks for watching.

Cold Close
And out. Awesome.
That was good. I enjoyed that.
I did too. And I could, I have notes and notes and notes. We could have kept going and going and going.

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