Office Space, Talent, And The Hunt with Dan Smith

The skyline looks the same, but the rules have changed. We sit down with Dan from Reliance Properties to unpack what really moves leases in Vancouver right now—from AAA towers with destination-worthy amenities to character spaces that trade polish for soul and identity. Dan has lived the market from both sides, brokering deals and now operating a deep downtown portfolio, so the takeaways are pragmatic: tenants buy outcomes, not square footage.

We dig into the friction between short terms and real tenant improvements, and why portfolio breadth can de-risk growth by enabling credible mid-lease relocations. Modular buildouts and raised access floors aren’t just buzz; they’re how landlords recover TI dollars across multiple cycles while giving teams faster paths to occupancy. We tackle the co-working conundrum too. Yes, the per-desk cost stings, but flexibility, community, and turnkey execution are invaluable when your headcount horizon is foggy. For many, the smartest footprint blends a long-term core with elastic project space.

Culture and training keep surfacing as the differentiators that laptops can’t replace. Mentorship travels poorly over scheduled calls, and young talent learns by osmosis as much as instruction. Technology helps—Matterport tours and digital stacks streamline search—but deals still click on site, shoulder-to-shoulder, with the space doing half the selling. We also look ahead: AI could supercharge productivity, spawn new space types, or push conversions like data centers. At the same time, construction costs, carrying costs, and permitting delays still strain feasibility, while retail vacancies hint at broader civic drag that leadership and policy must confront.

If you care about how offices earn their keep—attracting talent, signalling brand, and making hard work feel easier—this conversation is a field guide. Hit play, share it with a teammate who’s rethinking their footprint, and if it resonates, subscribe, leave a review, and tell us: what would genuinely get you back in the building?

PODCAST INFO:
the Site Visit Website: https://www.sitemaxsystems.com/podcast
the Site Visit on Buzzsprout: https://thesitevisit.buzzsprout.com/269424
the Site Visit on Apple Podcasts: https://podcasts.apple.com/ca/podcast/the-site-visit/id1456494446
the Site Visit on Spotify: https://open.spotify.com/show/5cp4qJE5ExZmO3EwldN1HH

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Chapters

• 0:00 Cold Morning, Warm Banter
• 1:50 Meet Dan And Reliance Properties
• 4:10 A, B, C And AAA: What Tenants Want
• 7:40 Leasing Terms, TI Risk, And Portfolio Flex
• 11:25 COVID Shock And Lease Roll Realities
• 13:35 Modular Buildouts And Raised Floors
• 16:20 Co‑Working: Flexibility At A Price
• 19:05 WFH Vs Office: Culture, Mentorship, And Commute
• 24:05 Tech, Tours, And Why Deals Close On Site
• 26:05 AI Uncertainty, Productivity, And Data Centers
• 31:10 Vancouver Towers, AAA Amenities, And Operations
• 36:50 Construction Slowdowns And Rising Costs
• 39:30 Taxes, Governance, And Red Tape
• 43:20 Retail Vacancies, Civic Vibe, And Risk
• 47:00 Leadership, Skills, And Getting Back To The Hunt
• 50:30 Closing Thanks And How To Stay Connected

Transcript

SPEAKER_03: 0:00

All right, Dan.

SPEAKER_01: 0:00

How are you doing today? I'm doing great. Thank you.

SPEAKER_03: 0:03

What do you think about the sun today? I can't believe that. It's amazing.

SPEAKER_01: 0:05

It's beautiful. Yeah. The uh vehicles in the lawn this morning were covered in a nice white uh ice, which is yeah, cool.

SPEAKER_03: 0:13

Cool. It is. Vancouver is like a jewel. It's like somebody polished a diamond when it's like this today.

SPEAKER_01: 0:18

Yeah, definitely. Definitely. So where'd you drive in from? Uh I actually took the bus today. The bus? Oh, the bone shaker. I did. 52 passenger limo. Exactly. Yeah. It's great. I have an event after work, so uh we'll not be able to operate a vehicle.

SPEAKER_03: 0:32

Aaron Powell I like it. Yeah. I've I've actually been uh become very vigilant on the uh you know people are like, oh you know, if you have one drink an hour or whatever it is, I'm like, how about zero drinks in an hour? I just won't do it. Definitely in the uh in the arena of the oppression Olympics. Right. You're not gonna win. No, no, definitely not. All right. Well, this is cool. Um we're gonna talk about commercial real estate today. Um I am, you know, I am a consumer of commercial real estate uh due to our company and the leases we've had over the years. And I've been leasing uh commercial stuff since I had my first business when I was like 21. So uh yeah, I know what it feels like. Um and I've and it's all been in Vancouver, so I've seen a huge change and uh, et cetera. So you uh you were gonna provide some color. We met um during you were showing us a unit that I really liked at the time. And um yeah, there were some circumstances I was trying to figure out how to how to sort of fit a square peg, or actually not completely square peg, but like a chiseled edged that was just too octagonally diametrically not gonna fit. It looked close. Yeah, we we weren't quite aligned at the moment. No, but I love that place. That's deadly. It's a great building. Yeah. Okay. Cool. Awesome. All right, so um yeah, I'm looking forward to getting into it. Welcome to the site visit on leadership and construction. Your host, James. Okay, Dan. So let's talk about uh you and the company with Reliance Properties. Uh, if everyone wants to go to your website, relianceproperties.ca, right?

SPEAKER_01: 3:07

I think that's it. Yeah, relianceproperties.ca.

SPEAKER_03: 3:09

Yeah. And uh drag that a little bit closer for me. Perfect. How's that? That's good. Um so yeah, you uh a commercial real estate um broker. Um and you've been in this for how long? How long you've been doing this for?

SPEAKER_01: 3:22

I think I'm coming up on 15 years. 15 years, right? Yeah, yeah. And that was um like nine uh as a broker, um going out there and helping businesses and landlords connect. Yeah. And then the last six uh working on the landlord developer asset management side where I'm representing the property owner directly.

SPEAKER_03: 3:41

Right. Okay. Right. So I mean that's that's not just the same as I mean, because you guys own a lot of your property.

SPEAKER_01: 3:46

Yeah. Yeah. Okay. Yeah. And so this is my uh my second tour on this side of the the table, which is awesome. I worked for the uh port of Metro Vancouver.

SPEAKER_03: 3:53

Oh, wow, okay.

SPEAKER_01: 3:54

Yeah, which is awesome because they're Vancouver's largest industrial landlord with a very specific mandate and um really interesting projects. That was a great place to work and learn tons in my, you know, kind of two and a half years there. And then the last four have been uh at Reliance properties.

SPEAKER_03: 4:09

Right. Okay, cool. So um let's just talk about a little bit um about the current inventory that you guys have. And most so is all of those properties you guys own all of them, or do you represent any other owners in that?

SPEAKER_01: 4:25

No, we are uh we only uh represent our own properties that we we own. Okay.

SPEAKER_03: 4:30

Yeah. So when I started my uh branding business, one of my first offices was at 1199 Pender.

SPEAKER_01: 4:36

Oh yeah.

SPEAKER_03: 4:37

Yeah, with the Wartman people who used to own that place.

SPEAKER_01: 4:39

Yeah, that's right. They're still in the building, which is great. Uh they obviously like their own building, which is awesome. Um but we bought it um, I think in like 2017 or something and uh have been operating it ever since.

SPEAKER_03: 4:50

Aaron Powell Yeah, I remember I was there when they uh replaced the cladding and the windows on the side because it used to be like there was a radiator and then they um it used to be it didn't used to be floor-to-ceiling glass.

SPEAKER_01: 5:04

Aaron Powell Really? Okay.

SPEAKER_03: 5:06

Yeah. And I had this um I had these large panels of glass that I couldn't uh for my boardroom that I couldn't get in the elevator. So one day they craned it through the open window because they hadn't put the windows in yet. Perfect, right? Yeah. That's amazing. Yeah, it was um that was the uh that was in, I believe, uh let me think here. When was that? That was 200 and one.

SPEAKER_01: 5:31

Yeah, there you go.

SPEAKER_03: 5:32

Yeah, about that, yeah. But lots of changes since then. Um yeah, let's just talk about the the current inventory you have. And here's just some of my some of the questions that I have is um how is there what are the the the kind of needs for uh for for tenants these days in terms of does everyone let's just look at it this way. Can we can we just can we put a a uh a metaphor kind of comparison of cars? Okay, yeah. So let's just say you go into a class A building and it's like getting into a new Mercedes. Yeah, okay, like all the bells and whistle whistles are in there, your dash colors can change all this, the doors can open by themselves, all sorts of things. Class A building, and then you get into like an old Chevy, yeah, where it's like, okay, you gotta roll down the windows, but there's still cars and they still get you from A to B. The question is, is that is is this a pressure from a systemic issue that we have post-COVID of expectation of work's gotta be better than my house, otherwise I don't want to come.

SPEAKER_01: 6:48

Yeah, yeah, to some extent for sure. Not not necessarily across the board, but definitely there is uh that comparison that goes on in the labor market side of it, right? Like, you know, how are business operators and owners, you know, getting people back in the office? And there has to be a compelling reason. And if that old Chevy is a bricks and mortar building with, you know, really cool architecture and beautiful, funky, warm space that it has charm to it, great. And if that appeals to your, your, your market, your, your workforce, your labor force, then then great. Yeah. Um other other businesses, you know, if they're trying to, you know, lure uh professional, you know, whether it be accountants or lawyers, right out of law school, they need to probably have the big, shiny triple-A building, you know, downtown Vancouver. It needs to have a kick-ass cafeteria, you know, open entertainment space where they can bring their buddies on a Friday afternoon and show off. And you know? Yeah, I do know that, yeah. Right. And so there there certainly is like I think the argument for both, right? Okay.

SPEAKER_03: 7:50

So it it's is there is there a um so I I find this there's something like before in my old career, I used to do something called employer value propositions. So I used to do those for like big banks. Yeah, like Manu Life in Toronto, Manual Life Cooperators, all these guys aim trimark. Yeah. And it was defining what it meant to work somewhere.

SPEAKER_02: 8:14

Okay.

SPEAKER_03: 8:14

And uh, you know, there's a lot of strategy in that because proof is in the pudding. I mean, you can say, hey, our culture is this, or but I mean, if you're not delivering it, then it's a lie. And then people, you know, you have dissension in the ranks because people are like, well, we don't we say this on our website. If you work here, you're gonna feel this. But when I get here, it's not like that. Yeah. So there's not there's an alignment of of storytelling and reality that you know just don't dovetail properly. Um so you know, in respects to that, it's one of the major things is I always talk about the the barbecue uh conversation people have on where they work. So for instance, if I were to meet you at you know a barbecue somewhere at a friend's house, but but we don't we don't know each other, and you say, Hey, you know, yeah, James, so you know, where do you work? And I'd say, well, I work at uh at Apple. You'd be like, oh wow, okay, great. What that is, is an instant transfer of brand credibility onto James. And you get it right away, and you have to say for you, oh yeah, like James Games interesting. Yeah, it works for Apple. So there's this identity that's attached to where we work and who we are. We've had that for a long time. But today, there is a an element of uh significant uh almost fashion, if you will, um of value of people based on where they work. There's a cultural value. And so I think what companies are trying to do that aren't the apples of the world, they're like, well, how do I make my people feel um as genuinely close to that within a small company? So some of the like the low-hanging fruit is the work environment. Well, all you gotta do is like go and look at what an Apple campus looks like and go like, oh, let's kind of do like, you know, I can't give you like, you know, AAA steaks every day, you know, and cafeterias with unlimited sushi bars and all. I can't do that. But what I can do is I can have video screens on the walls, I can have great conferencing stuff, I can have great chairs, I can have all that stuff, like a Herman Miller chair. It's not like, yeah, they're expensive, but that's all Apple has. There's a certain ceiling of ergonomic chairs that are a thousand bucks a chair or fifteen hundred bucks a chair. Uh no one's sitting in ten thousand dollar chairs. Well, maybe, but yeah.

SPEAKER_01: 10:33

The the marginal utility is limited, right? Exactly. Exactly. So it doesn't have to make that much difference.

SPEAKER_03: 10:37

So what do you what do you think? Like, how do you how do you stick handle where is this class B and C experience going and who is renting those places?

SPEAKER_01: 10:46

Yeah. I mean, that's a that's a huge question that I That's a massive question. And I face it every day, you know, like how do we uh attract businesses to our buildings and our spaces? And we do have a lot of B and C. We also have A and AAA, but we we certainly have B and C inventory. Uh and you know, I have to think from the perspective of that business owner and that manager, how are they attracting their top talent into the office and you know, into their company? So um certainly like there is the conversation between amenities and this experience in the building. There's also a conversation around the value, you know, if we offer a business, you know, uh something a little bit different from a financial perspective, right? You know, how can we help them attract um attract their staff back? And so we're seeing landlord inducements, you know, tenant improvement uh allowances or or whatever it is, um, become more and more front and center in the conversation about how do these businesses rationalize coming into this particular building, this particular opportunity, how do they make sense of it? Because what will it do for their business, their operation, their staff? Interesting.

SPEAKER_03: 11:59

Yeah, that's so that makes um let's look on the on the construction and TI um vector for a second. So the smaller a business is um the less, the shorter term they're gonna want to sign. Because they're growing, they're gonna might have to leave, they want some big penalty. And the fear is is it's a liability. If you look at if someone's got a five or seven year lease and you know they're in year two of their business, they got funding and they're growing at sixty percent or whatever, it's a dumb move. Like, you're not gonna do that. Like, why would I do that? Like, I'm gonna bust at the seams. For sure. Yeah. So these companies that uh that are sort of on the on the up um are it's probably tough to get, I would think. Yeah.

SPEAKER_01: 12:48

It that that is a hold down. For sure. Well, you know, like it's a conversation between, okay, we are uh on a you know two-month growth horizon, we don't or sorry, two year growth horizon. We don't want to commit to any longer than that because we think that we're gonna double in size. Right. And then and we and we don't know. Like it it may take us four years to double. And our funding, you know, may come through in three years instead of the two that we're we're forecasting right now. And you know, how does that look? But then on the flip side, that construction vector, that TI, you know, how do how do you know my side, um, how do we amortize those costs over only a two-year period? We can't we can't. It doesn't make financial sense. So we have to take a bit of a risk, and we hope that we can, you know, somehow compel the tenants to take maybe a bit of a risk. And one of the things that I am able to do, because Reliance has a very robust portfolio with a lot of different suites and a lot of different sizes and a lot of different buildings that are all localized to downtown markets, whether it be Victoria, Vancouver, which is where we're we're located. So, you know, hopefully I can say to these tenants, hey, look, I need five years to amortize these costs. And in fact, I really need 10, but I will be for you, I'll do it with in five, which is the truth. Um, but if you think that you're gonna outgrow the space in two years, you know, we can put a relocation clause or or we can have a very honest conversation because I'm the person that you're dealing with. And yeah, you know, more so than than maybe any other landlord, I have the ability to say, hey, look at here is a uh a menu of of other options that are, you know, 150% or 200% of the space size, the area that I can relocate you to on any given month. Yeah, because you got the portfolio. I have that portfolio. I have that number of tenants, that number of suites. And so we do that a lot. We do that a lot. And it and I it is a compelling, you know, conversation and argument. And I think it's been effective with our portfolio. Um, you know, but it does take a bit of trust on both sides, right? Oh, for sure, yeah. You know, and and a lot of the times, you know, these businesses that are that are in the growth stage that are they they have probably more risk than a longer, more established company that that can make that prediction about what their growth is gonna look like over five years because they've been around for 25 years, not 25 months, right? So I have to take a risk. And a lot of those times, those guys that said they're gonna double in two years, they call me after 18 months and say, actually, we're gonna half. You know, and that conversation happens. That's a wider macroeconomic conversation, but it does affect our ability to underwrite and to um, I guess, you know, take the burden of risk on these deals.

SPEAKER_03: 15:26

Yeah, no, that makes sense. Do you um so you were just uh you were just in the business with reliance when COVID hit, right?

SPEAKER_01: 15:38

Uh I was I was actually I was just leaving uh Avis and Young, which is uh where I spent yeah nine years uh as a broker. Unbelievable experience. I got kind of very fortunate in that I was an office leasing agent. And then I went to the port. And that was a very uh stable, that was so that was you know 2020, a very stable um you know business because they had so much work that you know is years of of forecasting down the road. So it didn't uh affect my employment. That was the end of that, but yeah. And then kind of in 2022, I joined Reliance, which is kind of right in the middle of that COVID, like the uncertainty was just unprecedented. Yeah, you know. Um, so so yes, like to answer the question, uh, I did join Reliance, you know, during COVID at the height of COVID, or right as we were trying to figure our way out of it, right? Wow.

SPEAKER_02: 16:29

Yeah.

SPEAKER_03: 16:30

So when you get there, is is is are you guys having weekly meetings like, okay, well, no one's at the office. What are we doing here? Like how how do we how do we stick out all this?

SPEAKER_01: 16:38

Yeah, it was it was it was a a challenge for sure. And it still is today. I mean, I think that you know, a lot of these leases that are, you know, two to five to seven to ten years long, like you know, the ones that are five years that were signed in 2020, you know, have come due last year, and you know, the ones signed in 2021 have are coming due. And we're seeing those roles now, like those leases roll where uh tenants are like really evaluating and have been over the last couple of years, really evaluating what does their future of of office space look like.

SPEAKER_03: 17:09

Yeah.

SPEAKER_01: 17:10

Right?

SPEAKER_03: 17:10

Yeah.

SPEAKER_01: 17:11

It's so yeah, we have weekly meetings about how to, you know, fill our vacancies and how do we, you know, incentivize people to come back to the office and feel comfortable coming back to the office.

SPEAKER_03: 17:21

Do you know I had um do you know much about raised access flooring? Uh a little bit. Okay. It's what's kind of interesting about that is is that um it allows I mean, you you have a little bit of a there's an elevation there when you walk through the front door, but that can be managed. You're only talking about maybe four to six inches, yeah, which is not much. But what it allows you guys to do in your own properties, it allows you to have m multiple configurations without you know taking drywall apart.

SPEAKER_01: 17:53

Right. Yeah.

SPEAKER_03: 17:54

Which is really, really interesting stuff. Um, because we often see that you come into a place and you're like, ah, it's kind of chopped up. You know, like I I want an open space, but yeah, we need some private spaces. And then so and so is like, well, that would be my private office, and I can't have that. And then I gotta put you know, like it's and then like the and I think there's um the tenant improvement side of things um can be more of a configuration than a than a you know, rip and replace and a whole bunch of stuff goes into the landfill. Um and it's less money for you guys because you're repurposing walls, you're repurposing stuff. So the capital cost you guys have goes into multiple leases over years.

SPEAKER_01: 18:34

Aaron Powell Right. Whereas like a modular office system that can be reconfigured, you know, and based on this raised flooring system that has all of the power and data and all in there. Hopefully, air is it does have air, right?

SPEAKER_03: 18:45

Yeah, so all your ducting is all gone.

SPEAKER_01: 18:47

Yeah. Yeah. It's amazing. We have a few of these buildings, a few of those in-buildings. Oh, you do? Okay, nice. Yeah. And it's very interesting. And you know, then the modular application of it versus you know, a more permanent structure of of studs and drywall uh is really interesting. So you're right, you can repurpose it.

SPEAKER_03: 19:05

So how does the the one thing that I mean, I think shrewd business operators kind of look at things in a way where they're like, okay, well, how much money do I leave in the walls? Like you come in there and as you said, you know, you get a five-year deal, you're like, well, we can amortize these TIs over this time. I'd rather have a 10 year, but I'll give you a five year as a risk on your side, and then they then they outgrow it, and they're thinking, well, even after the five years, and let's say I spend 100K, which is not a lot. But let's say you spend 100K, you got a new kitchen, you got all that shit, you got the flooring is all new and all that kind of stuff. And then you're like, Yeah, we're gonna move. Like to think of that as a business, to leave a hundred thousand dollars in someone, like it's a it's a weird proposition. For sure.

SPEAKER_01: 19:48

It's very challenging.

SPEAKER_03: 19:49

So um So where do you where do you uh uh it's uh I'll give you an example. So the the building we're in now, we're uh right across from the Salesforce building. Yeah. So we look into that. It's empty. Oh yeah. It's empty. Like I you can see they have I walk by it every day.

SPEAKER_01: 20:08

Yeah. You can see there's multiple floors where there's no, you know, furniture and you can see it from the outside. I walked by it last night and I noticed four contiguous floors with lights on that were clearly vacant. Right? You know, or at least that portion of the building. And maybe, maybe I, you know, didn't see exactly what I saw, but that's what it looked like from walking down Cordova.

SPEAKER_03: 20:30

So has the um has the ad advent of the we work co-working spaces had a positive impact on your industry or a negative impact? I I think positive overall. And how so?

SPEAKER_01: 20:43

I I think that it just gives tenants the opportunity to have flexibility um and to manage their growth better, which I think is is good for the overall economy, the overall office sector and industry. Um, you know, the Wii works in the IWGs and, you know, they're some of the local brands that they're the Regis and all that. Well, Regis is is part of IWG, which is great. Okay. Yeah, yeah, no, they're awesome. But then there's a great company called Pavilion. Um they're uh, you know, in a variety of spaces around of Vancouver and uh and in Western Canada, which is awesome. Uh, and then IQ offices, which I think is based out of Toronto, but they have uh uh operations here in Vancouver. So all these great co-working uh opportunities um just allow entrepreneurs and and and you know, whether it be enterprise tenants that are huge to scale and undertake project space where they don't know how long they're gonna need it for. Hey, I only need it for 18 months, but I need, you know, 5,000 feet. So it gives them that opportunity. Or instead of working in a in a coffee shop with your staff of three, uh, now we can come into the office and we can scale to four or five or six staff pretty easily because we can just, you know, kind of expand a a little bit. So that's I think those are the positive? The positives, yeah, which is great. Are there any negatives? Well, there, I mean, like there's certainly they are, you know, and like they create competition um for space and they provide uh something that's that's um uh perhaps a more flexible opportunity. And they also have a bit of an arbitrage, right? I think that's what their business is all about is about taking space at X dollars and then charging, you know, Y for it, which which is great and like good for them. But you know, it's it's not like it's not like another another another business that's operating in a completely different sector. Right. It is somewhat competing against the more traditional landlord, um, which is fine. And and and I think the overcharge a crap load for it, though. It's really expensive. Yeah, I mean, you're you're paying for a lot of things. You're paying for coffee machine working. Yeah, and you're building you're paying for for culture and built-in community and and entertainment and experience and all these like amazing things, and you you typically get very high-end premium space that they've you know, some way or somehow have have have delivered to you, right? Yeah, taken on and um and and made sure that it's ready for you and the furniture is usually all included. So there's like a lot of like really positive uh benefits for tenants, but then to your point, yes, you do pay, and that that is what their business model is. Yeah, I'm I'm not sure if it's it's it is almost that.

SPEAKER_03: 23:14

I mean, I looked into it and I was like, holy smokes, like for for a place that you could call kind of your office, yeah, if you want to have it for you all the time and you need like four or five people, right? Oh, yeah, it's like ten thousand dollars. Right. It's crazy.

SPEAKER_01: 23:26

Yeah. Yeah. Yeah. Yeah. But but it also, you know, like you might be able to sign a one-year lease and you know, somebody else might not want to sign a one-year lease with you for, you know, a you know, 500 or a thousand square feet. It depends on what they have, right? I mean, if if all I have is full floor options or, you know, quarter floor, half floor options, I don't necessarily want to carve off 500 square feet for you for a one-year deal. Yeah. Right? So it it offers that segment of the market um, you know, opportunity to be in commercial space.

SPEAKER_03: 23:58

So what do you um what do you think about the do you think that this COVID thing was the catalyst for this on working at home now?

SPEAKER_01: 24:08

Uh I think it certainly pushed uh pushed a lot of people to be able to work from home. And working from home as an employee can be great and it can be very um beneficial to your lifestyle, you know. You can go to the gym at lunch and you can work in Lululemons or, you know, a basketball jersey, you know, you can have the TV on in the background and no one, no one there to tell you not to, right? You can you can do your laundry and you can, you know, make your lunch at home. There's so many benefits to working from home for sure. But then, of course, there's so many, you know, negatives in my opinion. You know, you're losing out, especially if you're a young person, like you're losing out on the culture of your organization, the collaboration that you get from your peers, uh, the mentorship of the senior people that are in the office. And you know, if they're working from home and you're working from home and you're you're you're having to schedule Zoom calls that are extremely impersonal, forget about it. It's awful. I mean, I like the nature of our business, my business, uh, I go down the hall and speak to the accountants on like an hourly basis, if not more, because it's so important. And if I had to just send an email, they get back to me very quickly, you know, in our organization. They're off they're awesome. Um, but going down to the, like just to walk down to the office and have a face-to-face conversation, or our maintenance group, or you know, our property management group or our development group and just say, hey, you know, what's the latest with this? You know, I meant to follow up with you to be able to have a frank conversation that then leads to other stuff, you know. And the development guys in my organization are so awesome. And we walk down there, I walk down there and we talk football all the time. And it's great. And it, you know, I walk out of there, you know, five minutes later after talking about my Seattle Seahawks, you know, feeling to play football? Uh, not in a meaningful way. I played a couple of years in high school, but no, I can't say I'm a football player at all. Um, but you know, it so that that's culture. That's the culture of the organization. It gives me a great reason to become friends with these guys. And I think that there's a huge, huge value in that, especially for the young people coming out of university or or high school or whatever, that are now entering the workforce. They need to have that social connection and that isolation that that we really felt during COVID. And maybe it's less and less now, but I mean, can you imagine being in high school and having to stay home in grade 12? Oh, it'd be horrible. You know, or second year university. Like, you know, you go away for a year and you live in res, and then your second year all of a sudden you're back at home studying in front of a computer, yeah. Or an elementary school kid. I mean, that I couldn't imagine it. It's be horrible, you know, like the fun of school, you whether at any level is your peers, right? And I think that work kind of has that same appeal. Like one of the things that I loved about Avis and Young when I worked there was that the staff and the and the teammates and all the guys that worked there, guys and girls that work there, people that worked there, were all incredible. And we all became such good friends. And I'm still, you know, maintain a lot of those relationships, you know, as we, you know, finished university and started our careers, and now we're all in the stage where we're having you know families. Uh, and it's and it's amazing. And that's like it, it, you know, it gets people going. And it's all from the work thing. Yeah, it starts, it starts in the office with work, but then you know, you go for dinner after, and you know, you meet, you know, your wives meet and you know, whatever, right? Like it's uh it's it's it's fun, it's culture building.

SPEAKER_03: 27:26

So um and what do you and what do you think of um the how did I say the uh being able to get to get people okay, so autonomy, for instance. People have their own autonomy when they work at home. Yes. When they work at the office, you can't tell them to like, hey, yeah, you know, don't put an apple in the garbage because it stinks over the days or what or whatever. You can't say anything because you don't have autonomy for their place. And FH if you really look closely at work safe BC rules, they're untenable. It actually says I have to come into your home and make sure that your chair is ergonomic. Right. And I have to approve your workspace because you could have an injury and I'm still responsible for it. It's nuts. Right. Oh, really? I didn't understand. If you read if you read the rule to the T, that's the deal. Right.

SPEAKER_01: 28:22

Yeah.

SPEAKER_03: 28:23

And there has to be uh things like they have to have a secure front door. So if somebody comes through their front door while they're working, so essentially all of the rules that you govern uh at the office, I have to make sure that the the the building is secure and somebody has to walk through and started attacking our employees.

SPEAKER_01: 28:45

Yeah.

unknown: 28:45

Wow.

SPEAKER_03: 28:46

That still applies at their home. Right.

SPEAKER_01: 28:48

Yeah.

SPEAKER_03: 28:48

On my watch while they're in working hours.

SPEAKER_01: 28:52

That means that adds a level of challenge and liability like it's it's untenable.

SPEAKER_03: 28:57

Right. It's not possible. Yeah. It's also a complete intrusion. So the question is is that uh we it it is anybody who skirts any of those rules whatsoever, which is probably 90%, um like, why are we making these rules if you can't adhere to them? Because it's so crazy. So it's almost as like it almost makes it so difficult to be an employer that you're like, why do I bother? I'll just become a YouTuber. No, right? Not everyone everyone can do that. But all right, so let's just um let's go over. So we talked about like this COVID thing, and obviously it's been talked to death, but there is this hangover where now we're dealing with trying to get people back to the office. The government, as you know, uh in Ottawa, they're trying to do this, and yeah, you know, people are kicking and screaming. So why should I go back to the office? It's like, hello. Like all our taxes pay for you people. What is going on here? Um how is this when you're talking to uh prospective tenants? What is the what is the vibe out there in terms of how many people, what percentage are back at the office, what or not?

SPEAKER_01: 30:09

Yeah, that's a great question. I think it really um it depends on the industry. Certain industries seem like they have uh a stronger return to office, and and other industries seem like there's still that work from home push. And I think it has to do with what like what does their labor force want. And if you're you know a software engineer and you're just you know in front of your computer most of the day and there's not a whole lot of social interaction, and and perhaps maybe you're a bit more of a uh, you know, an in in introverted person and you just want to just do your work and just that's what you do. Working from home is great. And if there is the ability to work for you know five companies and four of them work from home, well, and and you know, and the ones full-time in the office, you might just say no to that one. Uh, and there are certain other industries that are also seem to be like along those lines. Or if you're an outside salesperson that's you know cruising around everywhere, and you maybe you don't want to go to the office because you're out, you know, dealing with your clients anyway. And you want to be on the phone and yeah, and you're you're you're making calls from the car and you're you're out in the field, and then you just r return home to your home office, right? So I we've we I I we as an industry I think have yeah, have seen that. The black box is what I call it. Yeah. I mean, it's like you know, if if you say, hey, I'm gonna work from the office four days a week and work from home one day a week, I mean, that is a probably a great lifestyle thing. And if you leave, you know, at two o'clock on Friday, you know, who's gonna know? Because you because because you finished your, you know, you finished all your work, or or maybe you send a few emails, you know, from Tefino when you arrive at seven o'clock, right? No one's gonna know that you didn't work Friday afternoon, right? Yeah. So it's a lifestyle thing, I think, you know, and it may not be great for a company in terms of productivity, productivity, yeah, and business growth, but it also may keep your employees happy, happier Monday to Thursday. So maybe That's a good point. Uh you know, it's it's a balance. It's a balance. I have I have really uh a tough time quantifying the percentage, you know, to your question about what the what the return to work is. It seems like there's a strong shift. I mean, you met referenced that Ottawa, I think Ontario um at the provincial level, as well as uh Alberta have both uh mandated, I think that all government workers are back full time sometime in 2026, um, full time in the office, which if that works for them, great. And I think I think that's a good thing generally. I mean, I believe in the office. You know, I drink the Kool-Aid of the industry. Um, you know, I worked from home for two years and um during COVID. And the first year was was great. And, you know, I got to do a lot of other things like adjacent to my work. And my wife was home with my my second child, my second son with uh on Mat Leave. And so I got to spend a lot of time with family, you know, during kind of work hours and lunch and go for walks. And it was great. The second year, um, you know, when the house was empty and I was alone, I actually didn't enjoy it as much. I wanted to, you know, be back around people and back in the office. And so I made it more of a point to go back and spend more time in the office, which is great. And the commute was not really a factor. Like the commute's just part of part of work. And I know people, you know, complain about, oh, well, I spent, you know, two hours a day in my car or on the public transit, you know, and I I could see that for sure being a huge uh deterrent or detractor for for individuals. But at the same time, like for me, uh, I personally, my commutes is less than that. I I live in North Vancouver and I take the Lionsgate Bridge. And whether I'm uh on the bus or in my vehicle, like it's it's just a nice way to like unwind and you know, I roll the window down, I'm not in my office and I'm not at home. I'm you know driving across the Lionsgate Bridge, which is a pretty beautiful thing. And like, you know, whether or if I was I lived in Burnhamby uh earlier in my career and I take the skytrain to work. And uh, you know, I would, you know, read read a book on the on the or you know, or or chat to your buddy, you know, if you see the same person every day, you know, you strike up a conversation, or you know, you can use your phone and send a few few emails. Like it's um the commute for me is not a big deal.

SPEAKER_03: 34:10

Well, it's a it's an interesting um paradigm because the the commute was the time that the employee was not compensated for because it's however long it took you to get there, and then you I mean the old days it'd be a punch clock and you start working when you walk through the door. Um but now it's like okay, uh I don't have to do the commute when I'm not starting at eight. I'm still starting at nine.

SPEAKER_02: 34:42

Yeah.

SPEAKER_03: 34:43

So it's like the question is is is the gain the happiness, which is yes, but there's also this um almost go back to like how people how people are like even hunter-gatherer days, you have to get ready to go for the hunt. Yeah, you gotta put your armor on or you know, your protect yourself, you gotta get your weapons ready, you gotta go. Otherwise you're coming back with nothing. And there's an element of I guess you uh here's I'm gonna this is gonna it's people are gonna hate us when I'm gonna say anyway, okay. Is this that there's a there's a um back then way, way back then, before leasing, was right um there was this feeling of uh this kind of masculinity of everyone going of the of the the tribal strength, if you will, like I want to say physical strength, brawn. I'm not gonna say agenda because I should probably get in trouble, but the brawn going out there strategically finding the kill, doing the kill, having the strength to bring the kill back, you know, going out as a hunting pack. And then there is the village, where everyone else who's not on the hunt is making sure the village is clean, doing all the stuff, raising the children, doing all that, all of those things. It's almost as though the work from home is kind of like trying to do a hunt from in the village. It kind of doesn't work because there's too much sweeping to do, there's too much like other things to do to keep the village nice. But the problem is we need the people to hunt. We do. Otherwise, there's no revenue.

SPEAKER_01: 36:28

Yeah.

SPEAKER_03: 36:29

So I think that there is this getting ready to go to work is a thing we've missed. So even if you do work at home, it'd be great if you go had got up at seven, went for a run, had a shower, you're ready, you got dressed, and then sat at your desk. Yeah. But that's not happening. No, for sure. So the question is, is the mindset ready for work? Like project consciousness, that is alert, and that is um your you you have had the couple of hours to prepare. Your mind needs to be ready. There needs to be and very few people are that disciplined. Like A players can do it. Yeah, like the top 20% for sure. But the majority of people. Is it top 20%? Like A players that can do that? Is that 20 or is it 10? It could be 10, could be 10.

SPEAKER_01: 37:25

But but you know, like I I agree with your point. Like the point is that the majority of people are not putting their armor on, their equipment on, their jerseys on, and getting ready to play in the game that starts at, you know, nine o'clock. That's when, you know, puck drop or kickoff is or the opening pitch. Um, you know, you need to have a routine to get ready. And I don't think that when you're at home, you're you're unless you're really disciplined, unless you're in that top 10 or 20%. Yeah, the majority of people probably are not. They're not getting ready uh to be to be as productive as they can be. Yeah, that's good. And and there's also the the end of the day as well, you know, like how are you uh unwinding and how are you separating that that work-life harmony, right? That's tough because Slack is still pinging.

SPEAKER_03: 38:12

Yeah, for sure it is. And it's not going away. Emails are coming through all like I get emails at and Sunday night. I'm like, what is this?

SPEAKER_01: 38:21

Yeah. It's uh yeah. We live in a world where people want, right? All the time, all the time. But my commute home, whether whether I'm, you know, I'm I'm look, I live, you know, downtown for a lot of my professional career, and I would walk home in a beautiful summer afternoon, and that uh gave me the decompression time. To think. Yeah. I would unclench my fists and I would relax, you know, and maybe I'd take my suit jacket off and sling it over the shoulder. There, you know, it's an important part of being social and and unwinding mental mentally, yeah, uh, your mental faculties. Um, you know, there's obviously, you know, physical um detriments to having a beer after work. Um, but there are certainly a lot of like social and mental and just relaxation benefits. So um, yeah, I I've had a few beers on the walk home for sure. You know, met my buddies and talked about the week, you know, on a Friday, Friday afternoon or Friday evening. And it's an important way to like let go of the of the day and of the week and to decompress and start thinking about the Canucks, right? And this year's playoff run.

SPEAKER_03: 39:22

So it's one thing that I, you know, I love about the construction side is that the the people, the trades, uh, you know, the self-performing GCs that are out there doing their thing, they have to get up and hunt.

SPEAKER_01: 39:35

Yeah.

SPEAKER_03: 39:36

They gotta put their uniform on, do their thing, and get ready for the day. And there's often a commute because the project's not next to their house. For sure. Or where they live. Um Yeah.

SPEAKER_01: 39:47

And the and the you know, the hardware store and the the the material supply store, like whether it be the drywall or the, you know, the the the lumber, the stud, like they're all in different places. You have to go and get your spear sharpened and then you know, head to the hunting grounds, right?

SPEAKER_03: 40:02

Which is kind of weird because it it uh you're probably always gonna think about this now. Now that I've stuck this in your head, the office is like the village. Yeah. And out there trying to get deals, doing this stuff or building or whatever is like out trying to do the kill. For sure. And uh so yeah it's it's a I I think that this um that where we're we're how do you make the the workplace be like the hunting ground? Like that is really the ultimate because I would say that you know if you have salespeople or or um um you know uh business development people who need to be having phone calls, doing things, having spaces, inviting people in, there needs to be that I can sit in this glass box and people can't hear me because there's a it's kind of like singing in the shower. The reason you sing in the shower is because no one can hear your crappy voice.

SPEAKER_01: 40:59

Right.

SPEAKER_03: 40:59

And you don't care if you're totally off pitch. It's your world for that moment. Yeah. That's how it is on the phone. People don't like to hear like to know that they're being heard with some obscure reference that they're making someone goes what the hell are you saying that?

SPEAKER_01: 41:14

Yeah.

SPEAKER_03: 41:14

That's not what we say at our company, but maybe it's their way of meandering the conversation that we can't hear on the other end of the line. Yeah.

SPEAKER_02: 41:21

Yeah.

SPEAKER_03: 41:21

So um you know there there is, but that's a hunting activity within the village.

SPEAKER_01: 41:28

Right.

SPEAKER_03: 41:29

So there's kind of some interesting dynamics in terms of layout, in terms of all of these kinds of things.

SPEAKER_01: 41:33

Well I mean technology is is is how you hunt from the village, right? It's having a bow and arrow that you can shoot from that's a very good point. You know what I mean? You don't have to leave. You don't have to leave and and technology if you do if you think back to that very first property that you and I met at, we met on a Friday afternoon, right, with some of your team and we walked the space and we looked each other in the eye and we had a conversation. Leasing in my world only happens at the building at the site at the hunting ground. But technology, if you remember that very same property we did a matter port, right? And that's a virtual tour you can fly through. So now all of a sudden you know you and I are on the phone a month later you can't remember what it looks like and I send you a link to the matter port and you can fly through while we're on the phone together and it's like we're walking the space. Yeah that's true. That is you know that's technology kind of taking leasing you know is you know making it a little bit easier. But I I tell you all the lease transactions I've ever done in my entire career, they almost all happen in the space. You know they don't happen in in the office or at or at home the home office or the work office, whatever it doesn't matter. They happen out there in the space, right? Looking each other in the eye, talking about high-level deal terms. Sure, I'll go send you a formal proposal via email later, but it's all the things that we talked about. And it's the space that, you know, does the space make sense? Like is is this meet your needs? Like if you're not physically there, if you're looking at a floor plan, forget it.

SPEAKER_03: 43:04

Yeah I know I uh I went through that matter port many times flow through I was flying through it I actually did a screenshot and then put our sign on the wall outside the elevator for what that was going to look like. I loved it. It's a powerful tool. It is it's it it is pretty cool. All right so let's just talk about um the inevitable AI thing.

SPEAKER_01: 43:26

Yeah. It's just a$100 billion question for our industry, right?

SPEAKER_03: 43:31

Yeah so what kind of conversations are going on uh uh how in depth are they how like this this is kind of a word like um a reference of how cerebral the conversations are like how deep are people going conceptually of what this dystopian world could be like like how dystopian is it gonna be there's obviously gonna be a spectrum. Yeah I mean It's not gonna be Mad Max where we're all got metal on our face. Right there there there is going to be this kind of it's almost weird now. I mean we're the weird thing that a lot of people say is well, you know we're we're not really cyborgs. I'm like, yeah we are the problem is I can actually just detach it from my hand and put it on the table. Right. I am actually part cyborg.

SPEAKER_01: 44:10

Yeah you right there in that moment you have the sum of human knowledge at your fingertips.

SPEAKER_03: 44:14

I know which is a crazy thing it's a crazy thing. So we're kind of on the spectrum already for sure of this. So tell me about the conversations that you guys are having about AI, what the impact is going to be for office space.

SPEAKER_01: 44:27

Yeah I mean uh the office space uh industry like in general for sure is going to be influenced by this you know AI is creating uncertainty. I think that's where most of the conversation is is about uncertainty. But like what is the what are the risks, you know, what's going to happen you know are is it going to increase productivity massively and you know every single employee now all of a sudden has a super high level analyst you know at their fingertips that can do complex you know actions and and you know find the um find the you know the knowledge within the data, you know, because there's so much information out there already, you know, in 2026 like, you know, okay so now is AI going to help us you know kind of scrape that data and then be able to to pull what's important and be able to make better decisions and will it be able to actually undertake those decisions and and implement whatever we decide and and this is I'm talking about every industry, every sector will that create more jobs or less jobs? Will it maybe for office space, you know, will it uh require that we um convert some of these unused vacant suites into data centers, you know, so all of a sudden the vacancy rate goes down you know and like who knows what it's gonna do. I mean um I I think that it's probably going to elevate the typical employee that they're gonna be more productive and it's gonna, you know, whatever the whatever the investment is that whatever the ROI is, like the ROI will be good, you know, and it'll generally make everyone more productive just like when the computer came out uh it's you know seemingly or or presumably like without looking at the data, people's productivity massively jumped. You know, all of a sudden you can send an email easily and you can you can analyze something on a spreadsheet easily and create a document on Word without having to handwrite it or typewrite it out. So this will be another computer it'll have a sharp curve where productivity for any given employee in any given industry will massively increase. So I think if anything the ideal outcome hopefully in this utopian world is that more office space gets leased.

SPEAKER_03: 46:37

Yeah I mean I I I I I I I hear the the um the referencing of the printing press the referencing of um I should say the the word processor um back also when they had the um it used to like shake shake uh wheat off uh bushels. Right. And you know it there was a huge backlash people went and attacked the machinery and tried to go and smash it all because it was just it was gonna yeah. So this one's a bit different though. Yeah. This one like I I I always say that that uh you know people say well history repeats itself I'm like does it I don't know I think the internet has created this different labyrinth of logic that I don't think has ever been around in history. So it's a kind of a it's a weird thing. So um for instance something something that I I'm that's I'm adjacent to which is music uh you know I produce music as a hobby and and um you know obviously you listen to Spotify listen to music and this is kind of like the the mass consumption of music not everybody is really looking at the artist they're like okay like don't like whatever comes up on radio whatever it is on Spotify. But there's this other platform where you can sell merch and all stuff called Bandcamp and you can sell your music and they just said no AI music. They just like put their foot down. Just banned.

SPEAKER_01: 48:11

Banned it. And and the and the writer guild in you know in Hollywood has said you know no artificial scripts. Right right you know like that is that that a a trend that we're seeing across. So we're already seeing this like we don't want this.

SPEAKER_03: 48:28

So the big question is is that when we get that Model T driving down the street moment of the first robot walking down like Cordova or something you're like oh shit look at that.

SPEAKER_02: 48:40

Yeah.

SPEAKER_03: 48:41

There's gonna be that and we're gonna be thinking hmm and then you cut to today where these cars are driving themselves. That's about Oh yeah Waymouth right so I mean we're talking like a what is it a hundred years from the first car now? Like 1920? They can drive themselves. So in a hundred years which is you didn't have the computer chip to compress that. And now AIs is the decision making and the able to the plans to be able to make things and make things better and better and better and better and better in such an exponential fashion. For sure God it's just a so the question the big question is is that um you know buildings and landscapes cityscapes they define cities like these are the things that that make a city what they are like New York the Twin Towers came down like this huge thing where you have you come into Vancouver you know the from when I looked at um pictures I love looking at old Vancouver photos it's wild. Like a marine building and like a like like and standing by itself. Yeah and then you go up and all you see is like Hotel Vancouver. Yeah and the church. Awesome and all the houses like where I know there were old houses. Coal harbor was just like a I mean even until like mid early it was a rail yard right like then you know I look at some of these new buildings that have gone up um you know for those you know who are uh not in Vancouver I mean we've got the downtown core is kind of this this financial district which I say was probably like butte all the way through to what was it maybe where beatty right?

SPEAKER_01: 50:22

Yeah but to beatty kind of absolutely yeah um and uh like there is a building that is on Thurlow and Pender brand new yeah just like there's nothing in there still is that uh B6 like the um yeah where Microsoft is are they gonna go in there? Yeah they're taking they've taken a lot of it yeah and they've actually given some back but they've uh they took all the things that's the one with the crazy the the crazy yes yeah it's got the curve the waves and the screens in the background yeah huge screens in the lobby okay so but is that all leased out? I believe the building's fully leased that's actually like a wild kind of story and case study and I would completely butcher it if I tried to tell you but something along the lines of they had the whole thing leased to a variety of companies and then Microsoft came along and said we want the whole building and they had to go unwind those deals and ask those tenants uh what would it take for you to maybe forego the lease that we've signed.

SPEAKER_03: 51:19

But Microsoft is in the old Nordstrom's building now and also in Gastown, right?

SPEAKER_01: 51:23

And Gas yeah and uh also And in Yale. In Yale Town on BD as well yeah so they're gonna go in yeah there are this an expansion well they don't really like who knows what they're doing. It is definitely an expansion but the I think they're gonna give back some space uh around town. Okay. Uh I think the Nordstrom's building there they've they've I don't think they ever even occupied it. Even though they took it or if they occupied some of it. Aaron Ross Powell But that's not a stratified building? Nope the it's they call it Bental 6 B6.

SPEAKER_03: 51:50

Oh that's B that's Bentel.

SPEAKER_01: 51:51

Yeah. Oh shit I didn't know Bentel Green Oak yeah. They did a great job of leasing it like like twice. They've leased it twice.

SPEAKER_03: 51:58

So it's still like TIs are going to take forever.

SPEAKER_01: 52:01

Aaron Ross Powell Yep I think they're they're yes they will but I think they're like well into it. But it might be like you know a year or two years until it's fully occupied and operational. But it's it's a I mean it's an interesting building.

SPEAKER_03: 52:15

It's it's an interest there's an interesting like a uh light impact of of uh so what's the deal with maybe our construction um folk can help us answer this question but what's the deal with like the 6,000 K uh white lights construction lights on and like unfinished floors are on all night. Yeah geez like when I look so I'm in Cole Harbor our view is west and uh there is uh the Jervis building so those two green ones yeah the reflection right of the lights on B6 is like a hundred bulbs on. It's wild eh like what the hell is going on here?

SPEAKER_01: 53:01

So it's kind of weird but uh so like they must be doing construction throughout the night. No way.

SPEAKER_03: 53:06

No I doubt that not at three in the morning. Oh okay. It's on all night. Wow yeah it's crazy. Are they just forgetting turning the lights off? No it's a lot of forgetting every night.

SPEAKER_01: 53:16

Yeah. Because you know you see the like in in in occupied buildings you'll see the lights go on periodically floor by floor because the because the janitorium these are like right yeah yeah I know I know what you mean I've seen it's kind of interesting.

SPEAKER_03: 53:29

So there's there's uh there's lots of space in in the city there's class yeah a space is there something called a triple A or is that only residential yeah there's AAA what's triple A?

SPEAKER_01: 53:42

Triple AAA how many buildings are there? Uh like tw 10 to 12 okay which one is in the city of Vancouver? You know it depends on a lot of things right it depends on location quality um you know kind of age and condition quality um and then amenities um so like all the brand new towers like like B6 would be considered a triple Aaron is that one that I'm in that Bosa tower the new one? Uh that one because it's stratified uh might not be classified as triple A but I I would think that it's you know it's somewhat subjective but I would think from a from a a a quality and location and amenity perspective yeah absolutely yeah yeah that Bosa building would be okay uh and then you know like uh the Talus Garden building which is you know giant floor plates and the stack absolutely a you know huge building with that incredible rooftop amenity and got conference centers you can you can book out and it's got like you know the perhaps the city's best gym um you know like in terms of an office building like so it's got great amenities got great concierge you know it's got uh nook the restaurant right downstairs like in the building like you know it's a block from SkyTrain triple A building all day long absolutely and that could be the nicest building in the city you know yeah maybe yeah because of all of those factors and um the owner operator of the building Oxford is you know a a absolute you know tier one top of you know best in class operator so yeah good for them yeah the we um the I have to uh tip my hat to the the Boza operators for the building we're in like we the Christmas decorations are insane but yeah I couldn't believe it and then they did a Christmas um on the 28th floor they had they had a Christmas uh catered lunch with all these different themed little stations.

SPEAKER_03: 55:32

Awesome. I was like holy and it's really good. Yeah like just yep nope tenant tenant appreciation yeah yeah uh which was kind of cool but uh uh let's so let's chat about BC a little bit yeah uh this is probably comes up a lot um what I see um in construction you know we have a lot of construction customers uh using sitemax um I see you know when you see companies that are stay with your platform or they go um there's lots of reasons for that sometimes it's companies going out of business sometimes they have business changes but what we see a lot is is smaller team sizes because there's not a lot of project starts right and there is uh yeah there's the economic conditions of British Columbia right now everyone is kind of like what are we doing?

SPEAKER_01: 56:24

It it is a very challenging industry right now the construction side of it right so what do you hear in the in the construction space? Uh like you know uh before we started recording uh we talked about you know the cost of real estate you know and it really hasn't changed that that much right uh you know rental rates and and and other costs like it really hasn't changed too too much um but in relation to other costs have changed a lot right if you think about just going out for lunch you know what is that what is that cost difference over the last five years right what's that inflation yeah and construction costs you know in in my world in TIs and and new new building developments those costs have gone up a lot and the time to build a building so like the carrying costs and the interest cost and the community amenity costs like you know as you build a new building the development charges that happen everywhere in BC and you know all the cities uh those those costs have have all have all gone up and the it costs the city money to add infrastructure to your new building you know you have to upgrade you know water lines and sanitary lines and hydro has to get improved and you know so like like the like that's where those those you know monies are are theoretically going directly right um and so all of these costs have gone up and so it really makes it very challenging um from a construction perspective and so I think that is why perhaps there's less projects and there's more uncertainty which is you know driven by the the demand side because of the economic uncertainty in the province in the country and around the world right so do you think um do you think we have somewhat of a sovereignty issue?

SPEAKER_03: 58:05

Like people are like you know the Canadian thing it's you know we were always kind of known as the friendly country with the but now it's you know like a debt per uh per capita 103 like we're the highest it's wild yeah uh we are definitely spending you know our you know we're we're mortgaging the future like we're spending too much I think but the qu the thing is is what's weird is is that we are not we're promoting and funding the wrong things. For sure we're not funding the things that are are helping business. Yeah we're being punitive to business. Yeah definitely and then so how do we get out of the 103 hole if we're just making it harder for people to do business?

SPEAKER_01: 58:50

Aaron Ross Powell I mean that's a huge political question. And uh I'm I'm happy to just very say from a very high level, you know, we just need better leaders and better management in order to make better decisions on how to allocate our our public funds, right? We know we need bigger, better infrastructure projects that benefit all Canadians and all British Columbians um you know whether it be you know building roads or facilitating trade, you know, the port expansion I mean if there's a huge conversation around okay there's an environmental risk but also it'll help you know Canadians with our trade, you know, and so that these are conversations that have have have had and need to have happen. You know, do we need to build more rail lines in order to facilitate trade you know or is it um you know do we build more data centers in order to facilitate some of the e-commerce that you know that our country has the AI stuff. Yeah. So you know I think that just from a very general statement better leadership um will allow us to to you know allocate our our public dollars you know in a in a better more meaningful impactful way.

SPEAKER_05: 59:57

Yeah.

SPEAKER_01: 59:58

And uh if anything I mean Government seems like it's getting bigger and bigger, and you know, strong government's very important. But at the same time, if we can somehow scale it back and layer it back and allow, you know, the private sector and and the the citizens to to let their businesses flourish with less restriction, less red tape. Because it seems like it's harder and harder to do business in any business, but in particular real estate and construction, there's just more and more um, you know, hurdles to jump through and and the building code keeps getting tighter and tighter, which is important for safety. But I think it also at some point, you know, have we gone too far, you know, on certain elements, right? Like so it's it's really and it takes forever to get building permits, you know, like around the world they build very safe, awesome buildings, but here it seems to take quite a bit longer.

SPEAKER_03: 1:00:46

Yeah, it's it's the uh it's this village mentality that's not the hunter mentality, I think is the problem. We're we're we're everyone is out there trying to do a kill and they're trying to manage the kill people from the village, and it's not working. Yeah. It's it's it's it's a strange um it's it's actually kind of a sad thing that you know we I would like to equalize somehow how we can pay people more. Because the thing is that like people get people don't get paid enough here. No, we just get we're so heavily taxed. But we're okay with it. Yeah. This is the weird part, is that the Canadian economy, we should be somehow normalizing for our our um currency deficit of uh to the Canadian to to the American dollar, and we're not. So you know people are if you if a Canadian uh the average Canadian goes for a holiday in America, it's it can't do it. No. Because there's no money left. Yeah. So but if we were paying like uh the the US equivalent up here, right, then it would flow back into the economy more. But there aren't that there's no programs really to help do that. It's it's more like let's just overpay for the oppression Olympics stuff. And there's just the the the stuff that's gonna move us out of 103 isn't being funded.

SPEAKER_01: 1:02:25

Yeah. Yeah. So it's crazy because we're because we're, you know, the same work we're getting paid a lot less for, right? Exactly. You know, like the same overall productivity and economic output we're getting paid a lot less for. And, you know, is that I think it's a function in a lot of ways, and not necessarily only, but in a lot of ways, it's just we're so heavily taxed. Yeah, you know, in every respect, we're just taxed maybe more than any other, you know, G8 country, right? Like it's it's just too much. And uh that really hurts us. And then that the real challenge that you've highlighted is that, you know, okay, now we're taxed. So what is where is that money going? Is it helping us be more productive? Well, clearly it's not. No, it's not. And it's being wasted or it's being mismanaged, or it's being, you know, there's perhaps corruption, you know, and and theft, and you know, that money is just not being spent or allocated in a way that benefits the working class Canadian, right?

SPEAKER_03: 1:03:23

So with the um I watched that interview. Um, it was a commercial real estate interview with a company in the States that we're talking about that there was there's one trillion dollars worth of um commercial loans coming to coming to fruition this year. Wow. Shit. I mean, that's yeah. So the question is how do you can you are banks just gonna kick that ball down the like it's just you keep it.

SPEAKER_01: 1:03:50

Yeah, I mean it's really hard to get financing for commercial projects right now, right? Like the banks who uh, you know, control the the the the money and the capital and the capital. Yeah, yeah, and and it's because like you know, they they're underwater risk adverse, right? Yeah, and and if they've had bad projects, um, you know, because you know, when the when the tide's rising and all these projects are making money and it's easy, great, and the funding happens, then all of a sudden, you know, the market shifts. And, you know, Canadians are right now buying less condos, just for example, right? Like the condo market is is struggling and there's new developments that just do not pencil anymore. And the banks are looking at them and they're saying, okay, well, you know, what what's my financing risk of this project? And if it's you know too high, you know, if it's in amber, like they're not gonna underwrite it. And and perhaps it's the same, you know, that's that's condo. What about you know, office? So, you know, are banks gonna underwrite, you know, uh an office building on spec given today's you know demand uncertainty? Like, not a chance. Forget it, right? And so uh it it is very difficult to get financing on on buildings right now.

SPEAKER_03: 1:04:55

So are we at the at the the beginning or the tail end of this this headache? And I and I ask you this because uh if I if I were to uh drive around Vancouver and I look at how much it has degraded, not streets, et cetera, just just the overall like Nordstrom's empty. I know Aritzia is taking that. I don't know how much they're gonna be able to fill that, but I don't know if they're doing all of it or not.

SPEAKER_01: 1:05:21

But they're taking 40,000, I think, Aritzia. Uh in terms of like that's like that retail flagship. And then Lululemon signed on to take, I think, like 298,000. So 300,000 feet. That's like of the office portion, yeah.

SPEAKER_03: 1:05:36

Oh, the office portion. Yeah.

SPEAKER_01: 1:05:37

That's where Microsoft is. Uh yeah. That's where Microsoft is, yeah. Yeah. And so and there's a there's a few other spaces that I think get uh amalgamated to find that 300,000. It's four floors of 75,000, which are the top, I believe, the top four floors of that six-story Northstone building.

SPEAKER_03: 1:05:54

Right. Okay. Um so but just the example is that's empty. The bay is empty, yeah. The old bay. It's like, what are we gonna do with that? And then you drive down Robson Street and it's like so many stores closed, closed, closed, closed, closed. It's like the whole fabric of the city is kind of just like, uh like this Christmas, it was lame. Like there's no vibe. Yeah. You know, you there's this kind of and we've kind of done this to ourselves. Like, how do we how do we let this happen? And we we no one seems to just stand up and say no enough. Is it is this the Canadian niceness thing? Yeah, definitely. Like no one wants to be the hammer that gets nailed.

SPEAKER_01: 1:06:36

Yeah, no one wants to say anything too controversial because they might get, you know, someone might uh, you know, there'll be backlash and you know, I don't know if people are getting canceled still uh very often, but it's certainly like, you know, people are scared to to say too too much, right?

SPEAKER_03: 1:06:50

So well the canceling thing is is an interesting thing because if you let's talk about the hunt for a for a minute, let's go full circle here. Yeah. What would be the benefit to cancel your fellow hunter out in the field?

SPEAKER_01: 1:07:09

I mean, other than the obvious, which is competition, right? You know, you're canceling a competitor. No, but you're on the same team. Yeah, if you're on the same team, yeah. Trying to bring the kill home for the village. Okay. What's the benefit? There's no benefit.

SPEAKER_03: 1:07:21

That's because it doesn't happen. Right. You're actually, if you were to cancel your fellow hunter and you're responsible to some degree to the village for the group, you're not going to cancel that person out in in the perils of the wilderness because they become a liability then. You want to strengthen that, keep peace, and get the job done. And then all come back as the same group, not less one. And in the village, if you're like, look, okay, so-and-so didn't do a great job out there, sharpen your skills and you can come out again. That's not a cancellation. That is a look that that wasn't good out there. Cancellation happens in the village of competing for the alpha. That's where cancellation starts. That's where it exists. So we have a right now, our entire culture is village behavior of competing for resources.

SPEAKER_01: 1:08:17

Yeah. It's because we've gotten too comfortable, right?

SPEAKER_03: 1:08:20

Society is too the competing for resources does not happen within the hunter team. They already know their resources before they leave the gates. So the point is that we're like this because we're in this compassion Olympics place where it is not helping. So we need to, and I don't know if like in in in the construction industry is, you know, I advocate for people that, you know, have been uh, you could say, socially marginalized for being builders and for being uh tough or being they're out there to make something happen or aggressive or whatever. I mean, no one likes people who I mean, I think we're past the days of racism, we're past the days of of people being bigots or people being rude to women. I mean, that's if you're gonna be like that, like you're not a fit anyway. But if you are a uh pulling up in a dually truck and you're doing your thing and you know, you go to the gym and you're uh you're an alpha and you want to go crush the job site and you want to do it for a company, can we celebrate for a minute that we have people like that?

SPEAKER_01: 1:09:33

Yeah, we need to.

SPEAKER_03: 1:09:34

We need to, but we're not there. No. And this is why office buildings are empty. Is this so we need to get ourselves together? And like I I there was uh I I've had a few uh some of the past podcasts, um, people doing uh they do job fairs at uh high school, and someone comes into like the grade 10 talking about work in the trades. And then a parent will call up and say, How dare you, how dare you um suggest that my son or daughter should go into the trades. You know, they're gonna go to university and make something of themselves. I'm like, are you out of your mind? Like, this is the kind of mindset. For sure. That's awful. But that's where it's at. Yeah, definitely. But it's changing.

SPEAKER_01: 1:10:24

I think it's swinging back maybe a little bit, like at least in that in that specific.

SPEAKER_03: 1:10:27

It is because most of the great jobs now are physical jobs that people are doing.

SPEAKER_01: 1:10:31

You get a great opportunity to, you know, use your skills, you know, use your your brain power. Also, physically you're out there, you know, if you're if you're a builder and if you're a trade, you know, you're actually creating something. You get the satisfaction of seeing a project from start to finish. You know, hopefully you don't have to take too much stress home with you, you know. Hopefully your your phone's not blowing up like you know, people that work maybe office jobs, you know. If so I agree. I think that it's uh it's very satisfactor, uh satisfying and there's great income and there's great future. And I think that, you know, we think about all the things we need to survive in society, you know, that we're going to hunter village, you know, we need food and we need shelter, you know. And how do we get shelter? We get it by building buildings, whether they're workplaces or community spaces or residential housing. All these things need to get physically built. Someone needs to build them. Yeah. So we should celebrate that.

SPEAKER_03: 1:11:26

So Vancouver, like, you know, I always think of, you know, if you look at your your assessments, I don't know. I mean, the average is what, six percent down or something like that, Metro Vancouver. Right. So, you know, if you're in the sort of three to three to five, whatever, if you saw what your your taxes are for this year, um, and then I look at Vancouver and I go, This is just a dip. Like it's so stunning compared to so many places in the world.

SPEAKER_01: 1:11:55

Well, the thing about assessments and your that your taxes is that like there's a complete separation because your taxes are really a function of the city's municipal budget. And if they need the city of Vancouver, for example, if they need$2 billion to run the city, they're gonna tax$2 billion. And it doesn't matter what your property is worth. They're just gonna change the mill rate to match what their tax requirements are. And they're still gonna charge you. So you, your, your assessment may go down by, you know, 6%, but your taxes are gonna stay the same.

SPEAKER_03: 1:12:30

But City of Vancouver said there was no income tax or no property tax increase this year.

SPEAKER_01: 1:12:33

They've said that for sure. But like they're gonna then they're gonna run into a budget where they're having to, they're running, you know, either cutting services or they're gonna run a deficit and they're gonna have to somehow make that money back up. Like Yeah. I I I just I don't I don't see that a decrease in the assessed value is gonna uh equate to a more efficient government and a and a smaller budget. No, we're I know we're talking about government here, right? And and I and I and I think this you know a lot of these governments have huge opportunities. And I I want to be optimistic about their ability to to you know provide quality service and you know at a at a minimal tax um you know cost to the to the citizen. So hopefully we can we can find some efficiency and we can we can you know cut through some red tape and you know whatever those tax dollars are actually collected by us as as landowners and city owners and you know and and business operators, uh hopefully that money is used productively and benefits us and you know builds community centers, you know, that citizens go to and improves the roads and you know, makes sure that we have you know strong power, you know, like hydro, like you know, that doesn't go out and all of a sudden we're without the ability to even operate the business for two days, right? You know, like what whatever the municipal services are, you know, are super important, right?

SPEAKER_03: 1:13:56

So what is your what is your advice for the people out there? What's what's Dan's sage advice?

SPEAKER_01: 1:14:01

Oh I mean, I have uh I have a lot of opinions, but like all of them I I question because there's so many perspectives that could be uh give us a good one. I just think uh I think good leadership is critical, whatever it is. I think that strong central leadership uh at the business level, at the personal level for ourselves, but at the business level, at the municipal level, provincial, federal, like at all these different levels, you know, um, we need to get back to some normalcy and some common sense. Like let's spend less, let's tax less, let's approach university programs and programming, and let's, you know, depolitical size them, you know, higher education. And let's get back to building programs that actually deliver skills for, you know, Canadian uh, you know, the people that are entering the the labor force. Like I think that there's just maybe we got we got too comfortable, you know, sitting on the metaphoric village couch. We need to get back to uh making rational decisions and you know, staying out of each other's way in the village so that the people that go out and hunt and you know bring in the revenue in society are able to do that and allow us to get back to being a prosperous economic force in the world. Canada, Canada.

SPEAKER_03: 1:15:28

I was gonna fill in, I was gonna fill in your sentence and you said it. There we go. Perfect. Okay, Dan, this has been an absolute pleasure. I'm so glad we met. And uh thank you very much. Of course, it's well that does it for another episode of the site. Thank you for listening. Be sure to stay connected with us by following our social accounts, Instagram, and YouTube. You can also sign up for our monthly newsletter at site systems.com slash site. We look at the industry inside contents and everything you need to know about slightness podcasts and slightly management, the job site, and construction management tool of choice. All right, let's get back to the