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Spencer Levy
We recorded this episode on location at our guest's US headquarters in New York City. Before we sat down to talk, we got a tour of the company's workplace, seven meticulously designed floors in a 39-story, 1950s-era tower on Fifth Avenue with a view of St. Patrick's Cathedral and the heart of Midtown. And beyond the skyline views: an interior that's impressive to see and to learn from. On this episode, lessons in form and function from the folks at the Australian Financial Services Institution, Macquarie.
Andrew Burdick
I've always been drawn to the purpose of Macquarie, and that is to empower people to innovate and invest for a better future. I think there's something quite interesting about that and how workplaces can actually have value to make that purpose a reality in physical space, actually catalyze it.
Spencer Levy
That's Andrew Burdick, an architect by trade who joined Macquarie Group in 2018 as the firm's Global Design Director for Workplace Strategy and Design. He says his mandate is to uplift the overall experience of the Macquarie workforce of more than 20,000 people in 34 markets around the world. That includes the New York office, which is a testament to convenience and culture with natural light, outdoor space, and facilities that are technology-enabled, green, and flexible.
Lenny Beaudoin
A lot of things that we do in real estate could potentially make people unhappy, meaning if it didn't work, people would be dissatisfied. But what actually drives culture is anticipating through hospitality what actually will create delight.
Spencer Levy
And that's Lenny Beaudoin, also an architect by trade, an Executive Managing Director who started the Workplace Strategy Practice at CBRE 16 years ago to help organizations like Macquarie design and roll out new offices with an eye on performance, culture, and results. Coming up: Aussie rules, the real estate story of Macquarie, how and why to create space that is functional and beautiful, efficient, cool and indeed cutting edge, especially in a building of older vintage. I'm Spencer Levy and that's right now on The Weekly Take.
Spencer Levy
Welcome to The Weekly Take and we're back in New York City in the spectacular new space of Macquarie, one of the largest financial services firms in the world based in Australia. But we are in their US headquarters here and we are delighted to be with Andrew Burdick. Andy, thanks for coming out.
Andrew Burdick
Happy to be here.
Spencer Levy
And then we have our old friend, Lenny Beaudoin. Welcome back to the show, Lenny.
Lenny Beaudoin
Spencer, always a pleasure.
Spencer Levy
Great to have you, and for our listeners, Andy just gave us a tour of this space just prior to taping, and I guess there's so many words I can use to describe it, but I'm gonna use a word that I think one of your guests used when they were here, a student, was it a high school student?
Andrew Burdick
High school student that was here as part of one of our foundation outreach programs with a university here. Yeah.
Spencer Levy
And the word that the student used was intentional. And I think that's the best word I could use. How intentional this space is. Tell us about that, Andy.
Andrew Burdick
Sure. I mean, first of all, I was very happy to hear someone who had just been in the space for, I don't know, maybe 20 minutes. She had been in a lot of workplaces for the last, I don't know, two weeks. And she said that word intentional, and she hit it right on the head. I think the overall goal of this project here at 665th in New York was really to make manifest in physical space, digital space, the overall purpose of this organization. I've always been drawn to the purpose of Macquarie and that is to empower people to innovate and invest for a better future. I think there's something quite interesting about that and how workplaces can actually have value to make that purpose a reality in physical space, actually catalyze it, bringing people together in real time, in real space around that central purpose.
Lenny Beaudoin
One thing in the tour about being house proud of your space. And I think that word intentional connects directly. We are all very intentional about the places that we live. I think what you guys have done has been very intentional about the place you go to work, but it reflects that same pride in attention and care, and it's manifest in all aspects of the experience you have on-premise.
Spencer Levy
And you could talk about a lot of elements of this space and we're gonna talk about as many as we can.
Andrew Burdick
Sure.
Spencer Levy
But there are some elements that are big picture, light in the air, sight lines. I just want to talk about the staircase.
Andrew Burdick
Sure.
Spencer Levy
The interior staircase I think it's such a unique feature. How it's designed – the sight lines. Because I think if people saw this staircase, they would understand the entire thought process or a lot that went into us. Tell us about that
Andrew Burdick
Sure, it's a great anecdote, a bit of a microcosm for the whole project. I wanna take one step back though before jumping completely into that. I think people jump to the physical thing because it is beautiful, it is very impactful. We jump to a physical thing because it's the easiest thing to talk about. But what's important to get across, I think, to everyone – a potential lesson here, is that whether you're a tenant, an operator, a building owner – is that this space, this thing, is so impactful because of its alignment with some of the key values of the organization, the cultural alignment. And, so,I think a lot of people try to jump to the thing, making a beautiful thing before doing the heavy lift on the homework of, is it actually aligned to what your organization is trying to do in terms of their overall purpose, their overall culture? And if that alignment isn't there, you've created a beautiful thing, but it won't have the impact, the intentionality of what I think you're seen today here in the tour, Lenny. Um, so the thing itself, this cascading stair, it builds on about 15 years of investment in vertical connectivity. And it's been important to us because it is a way of bringing our people together to literally support bump factor. There's a lot of buzzwords I think around that term, bump factor, what it really means is that the building is not fighting you. The building is actually supporting you as an employee, as a team member to run into people that you might not run into otherwise, to have moments of productive collision. And collision is an interesting word to use there. Productive collisions that actually put certain moments of conflict and tension into your day, and that's actually where moments of aha happen, right. People talk about the Jonas Salk moment, right, where he's walking down a corridor and finally the idea for polio's cure clicked. There is something very real about that, and that is not to say that every time you walk down the stair you've got the best new innovation for our businesses, but what it means is that spaces that connect us together in real time bring value in the innovations that you start to think about and create down the road. It's one of the hardest things to figure out how to measure, by the way. But we know from a cultural aspect and anecdotally that even after only seven months in this facility, we are seeing that impact on a one-to-one basis and at a team level.
Spencer Levy
Lenny, a lot of the things that Andy mentioned there is things that you and I debate at great length. And much as I jump probably too quickly to the physical, I think you've used the term Phygital with me before. What does that mean?
Lenny Beaudoin
Phygital is when you think about the digital experience, the connectivity, all things in terms of the physical experience. As it relates to culture and actually making impact, a lot of things that we do in real estate could potentially make people unhappy, meaning if it didn't work, people would be dissatisfied. But what actually drives culture is anticipating through hospitality what actually will create delight. And you can't do that unless you think about the services, the digital experience and connectivity and the physical environment is one thing that influences how people behave and experience a place. And, so, when we talk about phygital, we talk about the holistic way of thinking about someone's experience and anticipating how you create surprise and delight because that has an outsized impact on people's desire to be together, really, anywhere.
Spencer Levy
So, let's rewind the tape. Walk us through the main factors that you used to choose the building, the location, the landlord, and other factors that went into this site selection choice.
Andrew Burdick
It roughly breaks down over a couple of years. I believe it was spring of ‘21 – so coming out of COVID and like all good property searches, you get the book. It's got about a hundred sites or whatever on it. And there was a lot of quick no’s, swipe left. You know, these are probably not gonna be good. You quickly get down to a number of finalists that start to have interest, right. So, over the course of one year that full selection process was going on. By the end of that, we had three or four finalists, and probably the thing to point out in that process is by that point, we already had design as part of the conversation. This wasn't just a risk assessment of whether or not a site might work for us or it may have a problem. It, at that point is, what does each location, each site, each owner relationship, what opportunities would that actually create, to create a bespoke solution to that site? Obviously, for our own culture, yes, that's the through line, but each of those finalists actually had their own big idea that was going to capture the notion of placemaking. From there, we brought on our team. We signed the lease for this location, brought on a design team, so a year of design. That got us to spring of ‘23 and then a year and change of construction and moved in on time just after Labor Day ‘24.
Spencer Levy
When did you get involved with this project, Lenny, and how?
Lenny Beaudoin
A couple of years ago, I had the great privilege of helping support operationalizing their headquarters in Sydney. And we had been engaged to provide activation and change management to support the move from their old facility to the new facility. So, the same intentionality that Andy described in building the space and anticipating the space, they were applying to preparing people to move in. So, our team helped support Macquarie to get everyone motivated, prepared and really excited about the move into the new space. And, so, we help manage that under their direction. We tend to describe it as workplace activation. It's more of a celebration of the investment you're making and getting people really motivated about it.
Andrew Burdick
Just to build on that, this isn't a layer that just comes at the end of the project. I think some organizations do that and there is ways of doing that. What we find is most impactful, beneficial, is that, that approach – I will try not to use the word change management, of activation and inclusion of people throughout the process starts the very beginning of our design process. It's kind of hard to come up with a good answer if you haven't figured out what the challenge is that you're actually trying to solve for. And the best way to figure out what the challenge is, is just to talk to people. People who have their finger on the pulse, and that doesn't mean that they're necessarily a high leader in the organization. They're folks that know people and know what's going on in the businesses, and they can be a conduit of information and candor back to us as a design team to make sure that we're pointing the cannon in the right direction. That the answer that we are coming up with, no matter how well executed it is, is actually going to answer the business challenge, the people challenge. What people are looking for and the pain points that they already have in their daily life. How do we not only solve those, but actually make their days here, their work days incredible? You mentioned the word delight. That's exactly the goal. You can't delight people unless you know what it is that actually is challenging them.
Lenny Beaudoin
Activation is getting people really to inform, embrace, and celebrate the new office. It's probably analogous to a quote from the restaurateur Danny Meyer. He said about hospitality, it's present when something happens for you and it's not when something happens to you. When you think about activation, it is exactly the same thing. Think about all the people moving to this great space and wanting the experience to feel like it was happening for them rather than to them. So, their participation in that is essential to make that difference.
Spencer Levy
Let's rewind the tape a little bit again, because I wanna go right back to the selection process again, because the fact that this was an older building, built in 1957, while some people might consider that a negative, you consider it a positive. Tell us about some of those elements that made this building win the day.
Andrew Burdick
Sure. Let's just start with one of the foundational things that we were looking for. First, you mentioned it before, good light, good air, outdoor space. These things are just fundamental as humans, it's good space. So, what did that mean in terms of what we're looking for? We were looking for a space that had incredible windows, right. Access to natural light in any part of the workplace. We were looking for a building that had a LEED Gold certification or better. Now, it's not just the certification that's important. It's what that means. It means that they've invested as an owner in good building systems, mechanical systems, smart building infrastructure, that the building at its core is going to support our sustainability goals, but also just make a good, healthy environment for us. I mentioned outdoor space, and that's one of those differentiators. It was always important to people, right – before COVID. But it was one of the things that people brought up more and more when people talked about coming back into the office. What that meant, what would a differentiator be? Outdoor space was a key one. This building in particular had 25,000 square feet of it that we could activate. In Midtown Manhattan, that was a bit unheard of. I didn't realize that 666, the old number for this building, even had that. It was just gravel roofs. It is now incredibly active outdoor space for our people. Probably the last piece of the puzzle, outside of footprints and some of the just the wrong metrics, was location. But I want to talk about location in a couple different ways. Yes, location was important in terms of it actually improved our net commute times for our people. This facility is well situated amongst our client network. That was good. Check, all of us know in New York, hard to go east-west in Midtown at a certain time of day, so that was important. But location for us meant something a little bit more. And this is this notion of moving to a campus mentality no matter how big your office is. We like that Fifth Avenue and the institutions and culture and restaurants and things around it already had a certain neighborhood and campus mentality that would support our employee and client experience when they're here. And so rather than trying to build all that from scratch, our workplace could be more of a catalyzing agent for all of that around us. So, location for us was very important. I think you've mentioned it before, Spencer, how – you know, location, location, location but it's from an experiential standpoint.
Spencer Levy
Mhm. And that experience is not just the commute time, it's the proximity to your clients, it is restaurants, it is other cultural amenities, all these things. And just for people who are not in Manhattan, we're probably about five, six blocks from Grand Central, so 10, 15 minute walk maximum. The subway is right next door. So, it is a very well-located project. But I wanna touch on one other element, which is embedded carbon. 1957 building, you didn't have to tear it down, start again, why was that attractive?
Andrew Burdick
So, I mentioned any building that we were going to move into needed to be LEED Gold or better, or its equivalent. And while that's a credentialing system, one of the most important decisions in terms of sustainability is are there assets that already exist that can be re-envisioned, reutilized, right. Existing concrete, existing steel has your favorite word there, embedded carbon, in it. And by the owner's estimation, that I believe was about 17,000 metric tons of better carbon by their estimation was saved by making that critical decision to redevelop this structure rather than tear it down. Now, that doesn't mean that we were just moving into a 1957 building, not at all. But it did mean that the original structure, the concrete, the steel, etcetera, was kept. All new elevators, all new mechanical systems, all new smart systems, and a really great high-performance facade. So, this building feels like an incredibly new gift to Fifth Avenue. I don't think people realize what it used to look like. And we could be a part of that renaissance for this facility. And last point on this is that because we were going to then be an interior fit-out in that space, it was a really good foundation line for us to then create what has become a LEED Platinum interior fit-out within that LEED Gold building. So, it really set us up well for success from our sustainability goals.
Lenny Beaudoin
You know, it was interesting, Andy, just that comment about influencing and being a part of the ecosystem that surrounds your building. And I recall in working at the headquarters, the intentionality of driving what you would describe as the precinct in which the building sits and actually for that project shaping what those decisions were. I found that whether it's your facilities in Sydney, certainly this building 665th in London, Macquarie has been, again, the word intentional about actually shaping the civic response that surrounds the buildings in which you operate. And I think that's super important around the experience that people have, because Spencer, as you were saying, people's experience is not simply in the four walls of their office, it's in the entire experience of getting to, from, and around their workplaces that actually significantly impacts, I think, their happiness in the experience of going to work.
Spencer Levy
So, let me touch on something that I find, because I travel globally quite a bit, and I go to lots of offices. I try to go to as many workplaces as I can. And the question I always have is, this workspace is spectacular. But there are elements of this that I think you learned from your Australian workplace, or your staircase was one of them. So, my question really is, are you trying to make the New York location uniquely New York? Are you trying make it uniquely Macquarie? What is the driving goal of design? Is it sameness across the portfolio or uniqueness to fit in with the local market?
Andrew Burdick
Well, like all good designers, the answer is both, but let's dive into it a little bit. From a global operations standpoint, we don't have a kit that's going to look exactly the same around the globe, but we have as a performative standard that from an experiential standpoint, whether you're sitting in this meeting room here in New York or its equivalent in Sydney or in London or Hong Kong, your experience as an employee and a client will be of the same caliber, a lot of the same overall equipment, the same overall process, your experiences will be the same. How I think we then dial that into each location is that we want it to be opportunistic in terms of what does each asset bring into the table? We don't wanna just force our kit, for lack of a better word, into a facility. This building here at 660 offered us all sorts of nuance and character and context that we wanted to amplify. Yeah, of course, amplify with our culture and our kit of parts and our way of creating visible meeting rooms and connective stairs and spaces like that. So, in spirit, the spaces are very similar, built upon one another, but they really are honed in on the particularities of each city, you could say it that way, or I think more particularly each asset that we’re moved into, each base building that we're in.
Lenny Beaudoin
I'll say, I think this is really important for both owners and occupiers. Clearly having standards makes sense in terms of the way you buy different things and regulate the use of them. But what I would say about my experience of working with you and working with Macquarie is, you're driven more by principles than by standards because you see the opportunity also to test and evolve those things which you guys hold true in the way that you design space each time. So, you're always challenging yourself to evolve. And I think that's important to be focused on principles and not standards, because work is evolving, it's changing. The materiality, the products, the technology, you have to evolve and it's easier to do so when you're rigid in your principles, in your aspirations, and not too adherent to your standards.
Andrew Burdick
There's a why behind this, though. So, let's talk about this facility just as an example. It is opportunity and commercially driven. It's not just this idea that we wanna reinvent something in each location, we don't do that. We build upon the lessons that we've learned from previous facilities that – good example here. If we had a standard, let's call it a guideline or standard that says, we will have 13 foot floor to floors and we will not look at a building that doesn't have that. Well, technically we would have taken this building off the list. Because we have a performative standard to say that we will have a certain approach to light, air, and connectivity, we could take a much more refined look at this as an opportunity – 11 '6 floor-to-floors, 1957 building like you said. An 11' 6 floater floor in the modern and temporary time might scare off probably any consultant working with you because that's complicated. We saw it as an incredible opportunity to actually make that a defining aspect. If you're going to connect people vertically – go with me just for a second here. If you're gonna connect people vertically over seven floors, if I had a 14 foot floor-to-floor, that's a lot of extra height. I have a 11 '6 six floor-to-floor and I made it work mechanically and electrically and all that stuff, I can get people to actually walk seven floors. But if you're not bringing that performative approach, you're bringing sort of a yes or no approach to any asset, you're going to turn down opportunities.
Spencer Levy
So, you took something that many would consider a negative, turned it into an enormous positive.
Andrew Burdick
Yeah, so, it was funny. We'd been in this building, maybe at the six month part, and we kind of forgotten that we have health trackers on our phones. I mean, we use them, I think. But I'd forgotten that it could do vertical steps, right. It can tell you how many steps in a day, but it can tell me how many verticals. And, so, our team just went, I wonder what the difference is. And, so, we looked at August of ‘24, right before we moved, we were in the old facility and I think my vertical steps was 5,000. Looked at the months since we’ve moved in here and the vertical steps was 10 to 15,000. Now, I'm not a doctor or anything like that, not a health guru, but there's something to that number to say that that's how much more vertical movement that I'm getting in a typical day and not feel like – I want it, I want to do that. And we're hearing that from a lot of our people that yes, it's good for business, but at a personal level, people are moving more. And from a health perspective, that's great.
Spencer Levy
Mhm. One of the things that was discussed during our tour is the multi-use nature of most of your space. I think the term that was used was, each space can be used for three basic purposes. Normally you go to the lunchroom, normally you go to the work floor, normally you can go to what I would call the client show floor. But these can all be used for that and that actually made you more efficient because you didn't need quite as much space. How does that play into it?
Andrew Burdick
I think a lot of this is just understanding at the very get-go of the project, what are all the things that we're trying to do? To Lenny, your point, what are the pain points that we were hearing from everyone? What was the old facility not supporting? And in an ideal world, what would our businesses and our individual users be able to do? Again, if they're house proud and they want to bring people in, they want to use this space, what they would ideally be able to do, and that starts to drive a wish list that is very large. If you simply created a space for every single one, you'd never be able to make the commercial argument for it. We also know that people's days are very complex and no one's space is just used 100% of the time. So, is there opportunity in that, in those gaps and visions, to actually figure out how different spaces can flex their different uses? The best example is our town hall spaces, our avenue spaces, our meeting spaces, and outdoor areas. Most people would look at our outdoor terraces, hopefully there's some photos online by this point. And they'd say, that's a great event space. And I'd say no, I mean, yes, we use it for events. It's a great workplace. I walk out there and people are on their laptops without earbuds in taking Zoom calls. That is an extension of the work floor that you would never have thought that an event space would have been able to support and vice versa. Our avenue, all the pantries, all the areas that we just need day to day, we actually can get a majority of our staff together, altogether. Very few 1,300 to 1,500 person facilities can really do that without an added footprint.
Lenny Beaudoin
Yeah, and Andy, I think you would agree, while it meets that functional requirement, certainly drives efficiency, it does one other thing that's hugely important. When you take space and use it for three purposes, the space itself becomes more vibrant. And that notion of vibrancy is something that people feel and experience and makes them want to be there. And we always say, like, nobody likes to go to an empty restaurant. Nobody wants to go into a space that feels empty or isolated. And, so, when things are being used in different ways and people feel like they have agency to use those spaces, they do, and then other people want to be in that space.
Spencer Levy
One of the cool design elements, many cool design elements, but one of the design elements that was shown during the tour was the map of the different floors and how it kind of cut diagonally through the space rather than in what most people would think is a straight line and use the analogy to Broadway in New York City, where Broadway – for people who don't know the city, unlike first, second, third avenue, Park Avenue, Lex, which goes straight up and down, Broadway cuts diagonally. And that actually led to activation. Tell us about that.
Andrew Burdick
Yeah, so, that started just as a structuring device, right. You know, the city of New York has a pretty good operational structure, avenues, streets, points of interest along it. And Broadway has always been a bit of a quirk in that system because it's been there forever and it follows an old trail. And, and, and it's a very interesting activator along all that system. Basically, this workplace works the same way. We have a modular grid, very simple and efficient overall structure of the whole, the whole space. But our avenue, which is that main stair connector, for those who might not have visited before, that main staircase connector is a literal diagonal that connects all the way across each floor. And what's interesting, this is just something about good design. Good design has Easter eggs hidden in it, right. Things that designers maybe are walking out on and embed in the project, hoping maybe people get it eventually. What I've been astounded by is that when people walk by that sign that you were referencing, they immediately go, Oh, it's like Broadway. It's not meant to hit you over the head. It's subtle, but those little Easter eggs and intentionalities, again, come back to that word, really prove the level of value that design brings, not only to get the operational stuff right, but also to bring those moments of joy and delight in storytelling that usually mean that a space is thriving, because those business leaders and employees, they are gonna use that story with their guests when they come in. There's something humanizing about that. It's good.
Spencer Levy
Well, we had an author, Esther Choi, on the show and talked about how business communication needs to be more storytelling and less just the facts. And storytelling isn't just words, storytelling is in your non-verbal communication. And I always thought about non-verbal communication in the context of what you're wearing and how you're behaving. But the physical space is perhaps an even broader manifestation of non-verbal communication to your colleagues and to your clients.
Andrew Burdick
I mean, there's a number of studies, I think they're coming out. We may have to pull this to the side to find the number, but when they were looking at talent retention for younger staff, the appearance of connective, collaborative environments in the workplace was one of the key determinants of whether they wanted to work in that organization. And, obviously, space is a big part of that because it's the most visible part. But there's something about the storytelling that you were mentioning that I think is really important to both building owners and tenants. When we were doing this project, I remember writing this down. I wrote it down again here, that place plus story equals memory. And memory is really at the end of the day what you're going for when it comes to client loyalty and brand recognition and staff retention and pride of place and connection to purpose. And there's something about if you can get the place right, the backdrop, this wonderful moment, think of your favorite vacations and places that you've been. There's a backdrop to it. That then something happened in that place, a story, an event, a moment, and that creates a memory. And enough of those happen that they create a sense of actual, what you would term, place-making. That, at the end of the day, is a good workplace. It's hard to do because I think most of us focus on the place part. The story part, frankly, us real estate and design people don't control all of that, right. It's about how you've empowered the people in that place to make it their own. That's where the story part comes from. And I think just from the sheer number of events and people wanting to host others, we're getting there on that and it is starting to create strong memories and for a growing brand, that's value.
Spencer Levy
Let's talk about branding. And branding is the physical space itself, but I also understand that this building also gives you branding on the rooftop so that people all around the city can see it. Tell us about that and why that is important.
Andrew Burdick
Sure. Um, so to just, uh, be very honest and candid to anyone who's not in New York, sky signage is a very rare thing now because of zoning regulations here in Manhattan. So, we weren't looking, it was not on the list of criteria, but this building happened to have that grandfathered clause capability. And, so, it became a real opportunity for us to have three Macquarie logos at the top of the building, our second here in the Americas, and of course on America's Street, Fifth Avenue. That is measured in, like, number of views, like in a Super Bowl ad, right. When you talk about brand impact. And there's something about being able to, even if you're not the largest tenant of the building, have a sense of connectivity literally to the place. There's something of that in terms of when people are recognizing you as a brand, as an organization. And in this case, we hope they then tie that to the stories that are being told at the digital screens at the front door. That was also very important to us. The street presence for us on 52nd Street is really important. This project actually put us in a mindset to rethink how the phygital, we'll use that word again, the digital storytelling can actually embed itself in the physical space to uplift it.
Lenny Beaudoin
There's an aspect of brand which should be represented in the way that you intrinsically do things in the space itself. And, so, if you say, for example, with Macquarie, we're an organization and our brand believes in connectivity, you see that physically manifest without signage, it's actually in the way things happen. Or we believe in transparency and so, therefore you can see across meeting rooms and into spaces. I think there's an aspect and we think about this personally. So, if I was at the Levy residence for dinner, the way that your home feels and what you put out and the way you serve and host me as a guest says a lot about your brand and your values. And I think the same thing is true. And a lot of organizations think about that explicitly like you discussed, but I know that you guys also think about that very intrinsically in terms of what are the nuances of how we do things and what does it say about us to the people who come here?
Andrew Burdick
People are always saying the picture's worth a thousand words. A three-dimensional space is at the scale of a million words. That – you'll never be able to cover it in verbiage, exactly a descriptor of an organization. However, when people walk this space, when a client walks this space, when a potential talent or recruit walks this place, it is saying things that in no way can we simply authentically write down. It's talking about what do we find a value? What do we put our money into? What do we invest into this space? And for us, the things that I hope come through are that we invested in the things that support you as a person. Good light, good air, outdoor space, we've mentioned that a couple of times. And we've invested in making sure that you as an individual are connected to the purpose of this organization. That's good for the organization. Absolutely, it's good for our purpose. But that's also from a career mindset, really good for you as an individual working here because you're gonna learn more. You're going to get better at what you do. Your network's going to grow. And that comes down to making place. And just to circle it back to what you're saying, Lenny, that is brand, right. That's authentic brand. Not to take away from the importance of signage and all these other things, but when people come in this space, that is of the utmost value.
Spencer Levy
The space was designed and the shovel went in the ground, or the hammer was swung in 2023, which is only two years ago. What's changed in the last two years that you may have done differently? A, for the future, but B, what changed in your design thinking because we are now in this digital world?
Andrew Burdick
Sure. There's probably two or three key lessons learned, some of which we were able to incorporate into this building. Others that we are making 2% adjustments, right, as everyone should. Nothing should be static in a workplace. Stable, yes, but static, no. We should constantly be learning. So, from this facility, from ‘23 to move-in in ‘24 to now, I think the thing that we learned the most comes back to this intentionality of why and when and who and how you bring people together. Now that we have a place that is house proud and that people are very proud to bring people in, even knowing that we were going to have an impact, we still underestimated probably how much of an impact we were gonna have in terms of bringing people in and the desire to bring and host people. I'm not sure we would necessarily go back and change it. However, I think we would try to make that flexibility work even more. Could we develop this site as it is to support a 500 person event? That can be very challenging in a commercial office building, but it's something that I think we would want to do. And in a post-COVID world, that purposeful bringing people together, regardless of how many days a week people are working from office, etcetera, people are wanting to bring their networks together in purposeful ways much more than I think they were pre-COVD. I think we're going to continue to see that. And, so, it means how do you support that kind of large scale event, medium scale event in-house? That's just a very clear lesson learned. The second one, and this is something that I think both tenants and interoperators really need to wrap our heads around, is whether we really understand our stable core and our flexible edge. And those are terms that we use a lot now internally.
Spencer Levy
Stable core and flexible edge.
Andrew Burdick
Yes, it sounds like a fitness program, but, basically, I would ask any tenant or a building, do you really understand what your stable core is and what is your flexible edge? And from a tenancy, I mean, a stable core is the things that are so vital to your culture, to your footprint, to your daily needs, and to the way that you see the world and want to operate in it, that you want to control it, own it, operate it, run it, soup to nuts, it is you. And it's probably not going to change a lot for the life of the lease. The flexible edge, I think, is saying that it's becoming much more valuable to organizations. That could mean at the scale of your literal footprint, how much do you definitely need on any given day and what's your flex? On a day when you really want everyone in-office and you're really pushing everyone in, you don't want to build for that 100% of the time. You want to understand how to flex into that. And if a building can actually provide that flexibility without making it a static component of your footprint, that's a huge opportunity. But we're also talking about flexible edges now internally around this notion of a dynamic edge. And it's not just about, you know, being able to align footprint to need in the short and long term. It's about, there are things that another third party or an operator is gonna do better maybe than we can at scale. So, it's back to this campus idea of the flexible edge. What do we wanna have access to? But they're not part, necessarily, of our core mission. And, so, it's actually better to have a partnership, a network of capability and it is to try to control it like a tight fist. That's something that we are really focused on. You see it in our Sydney campus with our event spaces and things that are actually for external uses as well. I think you see it here at Fifth Avenue where we are now purposely reaching out to our neighbors to understand how we can be part of a bigger campus. That is that notion of a flexible edge. I think those two things are our key lessons.
Lenny Beaudoin
Andy, I love what you said about flexible edge and Spencer, I would contend and this isn't a lesson learned from Macquarie but it's something I see changing broadly that many building owners might under anticipate. And it's back to the phygital, which is a building inherently is a social network and the generation of consumers of office space are increasingly comfortable. For example, sharing their location using geospatial awareness in all facets of their personal life to make their life more convenient. Now, when you add that to a physical environment and you get an AI assist for helping find the places where I work most effectively, all of a sudden you're talking about some game changing ways in which teams will work and form and find each other inside spaces. Whether that's inside your own space, whether that's across an entire building, whether that across a precinct in the city. And I think that aspect is super exciting because I think people are gonna start to use space in much more discriminating ways as AI starts to assist them in looking at the people they should be networking with and meeting with in the forums which will do that most effectively. That will start to prevail. I think Macquarie’s very well provisioned for that but I think that aspect is gonna be probably the biggest game changer in how people utilize space in the future.
Spencer Levy
We all are so metric focused, we talk about why is this a success and what is the CEO or the board of directors saying but I think Jamie Hodari who was also a guest on this show a few weeks ago may have measured productivity the best. He said, quote, “You know how I might measure productivity? The number of smiles I see around the space.” As a final thought, what do you think of that or other ways you might want to measure success, Lenny?
Lenny Beaudoin
I think people who are happy do better work, are more engaged and contribute to their organization. I think it's a great measure.
Andrew Burdick
I mean, I think it's a component of the overall measurement that we want. Smiles per day is a good indicator that something is right, or at least a bellwether. I think when we talk about measurement, what you really should be asking yourself as either an owner, operator, or a tenant is when you talk about your workplace, or your building, your asset, what have you, do you find yourself typically talking about space, space metrics, footprints, efficiencies. Things like that. Or do you find yourself talking about number of people connections, networking capability, amount of interconnection, you can call it bump factor, whatever. Which of those things are you talking about, typically in your day-to-day? And if you're talking about the first one, it's very clear how we measure that, right. We all have those tools and we use them. If you're stretching in the second one, now you've gone, to use your term, Spencer, you've gotten from the cost center conversation to a profit center conversation. And that is the holy grail of design and workplace strategy and real estate is, can we start to show correlation between the investment that we make spatially, that culturally here at Macquarie, we know is important to us. But can I, as a leader in this space here at Macquarie, can I start showing correlation between that and the number of interactions between our businesses? Can I measure the amount and volume of external guests now coming into this space? Not because it's about how many people are coming in here and activating it, but how much can we expand our network of opportunity and relate that as a correlative back to our spatial investment. If we can measure that, I think we can really start to show the true value of why we build workplaces. And by the way, the smiles are still gonna be the most important thing at the end of the day.
Lenny Beaudoin
One thing I would add in building what Andy just said is understanding that bump factor, what we would call the serendipity effect overall. One of our other clients actually measures the interaction of people in their office and they isolate the people who don't interact with each other. They actually call this the sad and lonely list and they track it. I asked him if the report was actually called the sad lonely list, and it actually is. But what's interesting is when they look at the characteristics of that group of people they are less engaged than others. And, so, I do think this factor of how often – you call it a coefficient of serendipity, how often you actually bump into other people is usually gonna be a really good indicator of your long-term engagement and likely performance inside a company.
Spencer Levy
On behalf of The Weekly Take, what a delight to have Andrew Burdick, Global Design Director, Workplace Design and Strategy for Macquarie Group. Andrew, great job. Thank you for the tour today. Spectacular space.
Andrew Burdick
Good to have you here.
Spencer Levy
And Lenny Beaudoin, our old friend. Is this your third appearance on the show?
Andrew Burdick
This is my third appearance.
Spencer Levy
Third appearance. See that? I keep track of these things. Lenny Beaudoin, Executive Managing Director, Global Workplace, Design and Occupancy and CBRE. Thanks, Lenny.
Spencer Levy
With thanks again to Lenny and Andy and to the folks at Macquarie Group for the office tour. It really is a remarkable space. We invite you to learn more at CBRE.com/TheWeeklyTake. You can look for related content there on our site. And if you're interested in what we do, please share the show, as well as subscribe, rate, and review us on the platform of your choice. We'll be back next week to visit another notable corner of the commercial real estate world, and look forward to you joining us when we return. Thank you for listening. I'm Spencer Levy. Be smart, Be safe, Be well.
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