On Striking the Perfect Balance Between People, Place, and Technology with Frank Cottle
December 9, 2021
“I don't know that I fit a lot of molds, honestly, I just do what I want, and then enjoy it and find the things that are challenging, and then I think, perseverance sticking at it, nothing is easy.”
Frank Cottle, the founder and CEO of the Alliance group of companies, and an experienced speaker, strategist, entrepreneur, advisor, business leader and investor. Since 1979 Frank has been building flexible workspace companies under the Alliance brand and its predecessor companies, focusing on new ways of working that genuinely meet the needs of today’s entrepreneurs by combining three fundamental components: people, place, and technology.
His primary areas of expertise include integrating flexible workspace models to assist with corporate real estate repositioning, investment banking, finance, workplace technology, and business leadership. I’m a regular on the conference circuit and frequently consult with multinational firms to plan and formulate strategies for the future of work.
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On Striking the Perfect Balance Between People, Place, and Technology
Brett:
I'm excited about our next guest. He is focused on all things remote working right. He's the founder and CEO and a keynote speaker and a flexible work expert. In fact, he is the CEO of Alliance group of companies, an experienced speaker, strategist entrepreneur, and since 1979. He's been building flexible workspace companies under the Alliance brand, and as and its predecessor companies focusing on new ways of working that generally meet the needs of today's entrepreneurs and combining three fundamental components people place, and technology. This conversation probably can't be more timely right, given everything that's been going on with COVID-19 I'm excited to have Frank Cottle with me, Frank, how are you doing today?
Frank:
I'm doing just fine. Thank you, bro. Looking forward to our conversation.
Brett:
Excellent for our listeners to get to know you for the first time. Would you give us a little bit more about your story and your current focus?
Frank:
My story is probably like most entrepreneurs. I've had a variety of companies through the years. Our current company structures actually started almost 42 years ago, in your sector and your core sector and commercial real estate. We were a property company that built up a land banking theory for investment, where we would buy a piece of property on the edge of a large masterplan development and where we had excess entitlement. I might build a 50,000-foot building but I had 500,000 feet of right to build on the property that we took up, and we worked with Chevron land mobile land, Prudential land Trammell Crowe, the Irvine Company, Boston properties, ING summit properties all the big guys across California, Arizona, and Texas, and when we built or freestanding properties, custom-built properties that host and house what was then called executive suites of the era, and those sweets, were a little bit ahead of our time because we were very technology-oriented, and we learn to run executive suites, which at the time, and I think still today, what you see coworking in business owners still generate the most revenue per square foot of any commercial office model and existence. That's where we started. We sold that portfolio in 1990 and started a new portfolio of leased properties. On a nationwide basis, I and two other partners, and built 195 projects during the years 1990 to 2000 and then sold that portfolio, and the reason I wanted to sell that portfolio is honestly I wanted to own the customer but not the facilities anymore. Technology had buggin bitten me, and it seemed that Expedia looked a lot better as a business model than Marriott if you get the drift, and so we have migrated ourselves today to managing global portfolios for companies of all sizes. We have operations in 54 countries from 1300 facilities through Alliance virtual on our publication, all work reaches about 33 million people a month now focused on the future of work.
Brett:
I want to dive into the biggest secret to striking the perfect balance between remote working with people place and technology, especially as it pertains to this new environment. We're going to have that here in a minute. But I want to take one other step back Frank, I believe we've all been given certain gifts in this life, and perhaps I want you to think about the earlier days, maybe the days when you were in college or maybe as a teenager, or perhaps even University, early days of your career, and I think we've been given certain gifts and some people call the strengths or superpowers. I believe they're God-given gifts and these gifts are to be given to us to be a blessing and help to others. I'm curious, what are those one or two gifts that you believe you were given? How does that help how and bless people today?
Frank:
Well, I'll use my college experiences. As an example of that, I was actually kicked out of college, I think 1968 69 is being sorted of turbulent years for a lot of students, and so I was asked to leave the college where I'd been attending, and I went down and spent some time without my parents knowing it, living in the Bahamas, working as a commercial diver. When I came back and had been kicked out of college, I had to face my dad, who had been paying for the whole thing the whole time, I was gone. It was a very expensive private college and, and my dad was sort of really comfortable farming and ranching and family and, and he looked at me and he said, Well, I guess, he got kicked out of school. Did you learn anything? And I said, quite simply, so that decisions have consequences, and he simply said, Good, and walked away, and I think that that one point was very pivotal to me to recognize that the decisions that we all make every day, do have consequences. Everything you do has a consequence, and to lead your life around recognizing your decision-making process and not be paralyzed by the consequences, but actually take and make decisions is a critical part of business growth.
Brett:
Having the wisdom, I'd say, to recognize when you made a mistake, and to shift and change, because decisions have consequences. Is that a fair summary?
Frank:
Well, I think so a little bit. I went on from there to become a commercial diver, and worked for a couple of years for one of our, as a contractor to one of our federal agencies, and did kind of some interesting work for a couple of years and then got married, and my wife and I decided that interesting work wasn't a good long-time career. I started racing yachts instead, and race sailboats and yachts and work too, with another team to build a very large yacht brokerage between 70 and 80, which is what I exit when we started this company.
Brett:
I think I've captured it, and I think it's this. It's adapting and building and perhaps in a new circumstance, which is going to connect this whole thing with this remote going remote. Your ability to create something on perhaps you weren't, you're planning on to college, to do the traditional route, things go haywire, you get kicked out of college, you're in the Bahamas, and you're going to see that as an opportunity to adapt and to learn and to grow something. Is that a fair summary?
Frank:
I guess. I don't know that I fit a lot of molds, honestly, I just do what I want, and then enjoy it and find the things that are challenging, and then I think, perseverance sticking at it, nothing is easy. If you're really going to get good at it, and you have to learn and one of the things that I tell people in our company, and one of the things that I tell people when they ask, kind of the question you're asking about me is how do I see myself and I just really want to be the very best of our industry. I want to learn every day and be able to apply what I learned, and I think that constant quest for knowledge is really what drives me more than anything else.
Brett:
Beautiful, that dive in right into a good way to dive right into the topic here.COVID-19 hits, you've been in the industry, obviously, for so long, student of the game, leader of perhaps of the industry in a lot of ways, and this thing hits and it's like you've been prepared to help people make this shift this transition. I don't necessarily want to talk about remote working so much as I want to focus on what have you learned in these past 18 months? What does the entrepreneur there's a small business owner, there's the large company? What's the biggest secret right now to remote working that you've learned in the last 18 months?
Frank:
Well, I think first let's define a little bit about agility and remote work. Get some common ground here. IDC said in 19 or 2019. The forecast before the pandemic, that there would be 1.8 billion remote workers by the year 2020. Little did they know, and they defined a remote worker as those individuals which work two days or more outside of their primary workplace on a permanent basis. Mondays and Fridays from home, if you will, Tuesdays and Wednesdays, Wednesdays maybe from a Starbucks or a co-working center, or a business center, or maybe in partnership with a joint venture partner at their office, a minimum of two days a week, 1.8 billion people. That's fully, almost half of our entire workforce globally. The issue around remote work isn't a COVID issue. It's a tectonic change that we're going through as we learn to recast how we use technology, how we create jobs, the social contract between an employer and an employee, what it means overall, how technology doesn't have borders. As as we've had, the concept of place is where you are not where your boss thinks you should be. All of these things evolve together to be a massive, as I say, tectonic level shift in the way we do business, and in the future, it will grow even more quickly.
Brett:
Very well said, a lot there.1.8 billion that's staggering to think about two more days outside of the primary workplace, it's about half of the entire workplace, and it's already been going on right that they guess the perfect storm has already been happening, and perhaps COVID just either shined a light on it or maybe accelerated certain aspects of it. What's been the one aspect you feel like COVID has actually accelerated for remote working? How does the entrepreneur or the corporation take advantage of that?
Frank:
Well, it's a balancing act, and all of everything that has to do with remote work had been going on for a number of years, and let's go back to 16 1718. a time period was a massive battle going on for talent. How do we find the best people in the world to work for our company, for your company for Microsoft, for Google, for every major employer worldwide big battle for talent, and what the HR department found within those companies, the larger ones in particular, that they couldn't attract talent unless they had a remote or flexible workplace plan already? Everybody knew this, and, you've probably heard the old saying, don't let perfect be the enemy of good. Well, every company, which was actually trying to come up with the perfect plan, and what COVID does do was kicked everybody through, across the threshold of their own decision making, and now good was good enough, and everybody started putting into place plans they had already thought about, but not really enacted, and now, execution became more valuable and more important than planning, and that's really what has occurred.
The outcome of that will be again, massive. I think I read a report the other day that said 41% of the people that are currently employed by I think they're referring to the technology in the financial sector, will not come back to work, they will change their jobs, they will quit their jobs if they're forced to come back to the office five days a week. We talked about the great recession. Now we're talking about the great resignation as an issue that employers have to face. jp morgan, I think it was just announced that for their starting analyst, they were raising their salary rates. For people that came back to the office from 75 to $100,000 a year. That's a 25% increase in compensation to get people back to the office, and that's again, amazing, amazing work by the way. I don't think it will work for them. I think they'll still end up having people outside.
Brett:
Frank, so much wisdom there. By the way, you can find more about Frank Cottle at fcottle@allwork.space. That's all work dot space. I want to unpack a little bit of that and then ask a follow-up question here. I think the most staggering stat you mentioned is 40% 1% will quit if forced to go back five days of work per week per, in the office per week, and because it's a new normal like you said, tectonic shift, and lifestyle and time and energy, and I know for myself and my family, five children, wife and I, and, and do two companies, two podcasts and, and we're going very let's say at a rapid pace, and our team works remotely, and it's a way to get time and energy back in lower stress, and I mean, so many things there, I'm sure there's pros and cons on both sides. But I can tell you, I would be part of that 140 1% like, I don't ever want to be forced to have to go back to working in an environment which was not flexible. That is, that is amazing, if not longer, the Great Depression, the great resignation. Let's talk about the companies that are doing the best, and let's make it very practical for folks. Given all of that stats and all of the current conditions, what are the best doing with all worked out space and how you're helping your clients and customers serve their teams with remark working? Frank, what's the first step to take clarifying or getting on the right side of these things?
On Striking the Perfect Balance Between People, Place and Technology: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don't let yourself be lulled into inaction." - Bill Gates
Frank:
Well, I think, as the battle for talent is quite evident, that also business all business is run by its access to capital, and this shift will have a profound effect on companies, particularly large public companies, access to capital in the future, and you say, how is that going to happen? So just, in your mind, consider, for a moment a simple conversation between the CEO and the CFO of any fortune 1000 company, yesterday, six months ago, whenever walking through their corporate headquarters together, and they walk through the corporate headquarters, and they recognize it, there's nobody there. They have 100,000 square feet of space in midtown Manhattan, and there's nobody there. Then CEO says, Wow, the CFO says, Hey, but don't worry about companies doing fine, and they look at each other and they kind of laugh and they just map again, and then we don't need this stuff. We don't need it. Now that 100,000 feet, they really look at that and they say okay, the lease is upon that next month, let's renew it, let's drop it down to 50,000 feet. Well, 50,000 feet worth of expenses on a 10 or a 20-year lease just went off their balance sheet. lease is a debt to the debit side of your balance sheet.
Now they have all that new freedom from debt, that allows them to raise more capital for business growth. The property company, on the other hand, is staring at a 50,000-foot vacancy factor there and go to go to the two days a week for a second. If everybody in Manhattan in 2019, on 2000 2021 of the oldest works one day a week from home. That's a 20% vacancy factor two days a week from home that that 40% vacancy factor. Start looking at large cities, central business districts, primarily the ones that are fed by commuters, particularly those that are fed by public transit commuting, and that's where you'll see the biggest most dynamic changes in the repurposing of a lot of commercial real estate, that big tower 50-floor tower is going to be 40% empty, they're going to convert it to residential. What else are we going to do with it? Okay, the business won't grow fast enough to absorb it. They're going to convert a big percentage of that to residential, which means that in the future, more of the people that work in this city will actually live in the city and that will change all variety of dynamics, and all aspects of real estate that you deal with commercial retail restaurant. All aspects of real estate will be repurposed and changed around this. Again, adaptation for flexible workplace overall.
Brett:
If I'm gathering it, you're saying, looking at this as an opportunity, to cut expenses. dramatically, either completely giving up your leases or half, cutting it in half, and saving a big capital expense right there to be able to invest into talent, and to be able to invest into the growth of the things that really drive the bottom line. Is that a fair summary, Frank?
Frank:
Well, that that goes out to all shareholder value issues.in the future, I don't think you'll see large corporates building the same monuments to themselves in the form of office space, so much is trying to build flexible cultures, with really superior staff working where they want to work, living where they want to live, and having a much more agile workplace overall, we've been seeing in migration that direction, and again, and the changes been made, and if you think of change, if you were to go through any program with the most hardened addicts, or alcoholics, and you go through that program successfully, for 12 months, your recidivism is only going to be about 10%.you have just gone through 12 to 18 months of absolute change in every aspect of a person's life and habit, and your case of recidivism to the let's get back to the way we used to do it is going to be minimal.
Brett:
Can't hear you.
Frank:
Brett, I'm not hearing you. I'm sorry.
Brett:
I'm back now. Sorry about that. We had a little commercial break.
Frank:
I was just gonna jump in and say, here's my opportunity to take over the show.
Brett:
It was such a big point there, by the way. 12 to 18 months of absolute change, and habits and work from home and everything else, and you mentioned if you compare that to an addict for like, the alcoholic anonymous, they can do 12 months, and they got about 10%, not recurring rate. Whereas now we're gonna just make this even higher.is that a fair summary? That I missed that?
Frank:
No, it really is. I mean, when you think about it, it takes a certain amount of reinforcement to change a habit. It could be a diet, it could be exercise, it could be getting shedding a really bad habit, possibly, or addiction and addictive habit. But once you've changed that habit for a certain amount of time, you don't go back. Okay, you might blend a little bit. But you don't go 100% back, and so we're going to go into this, everybody's talking about the hybrid office, which is a blend of work from homework near homework app, your corporate headquarters, it's a blend of two days, two days, one day, one day, one day, one day, it's a, it'll be a blend back and forth that meets the needs of your individuals and your companies. But, nobody is going to get on a train and commute two hours every day again. Well, and they don't need to do it, and I think that's the issue. If they get a good job. You don't have to do that anymore. You might commute on Wednesdays to a team meeting.
But the rest of the time you're going to work either from home or near home, and I think there's a big difference, and this is something that we see going on right now. Not everybody who is caught in this change has suitable work in their home. You just pension five children. I'm going, I can barely deal with a dog. Not everybody has the capacity of the space, the personality to deal from working from home, maybe one day a week, no problem. But every day? No.most people will migrate out of the permanent working from home and into work near home. As we say today as we look at facilities we'd much rather build a facility or lease a facility on a bike path than on a metro path. We are looking at the secondary and tertiary markets to serve as our customers more now than in the central business district markets.
Brett:
Let's dive right into that. People understand that all worked out space, you can learn more about a friend call, and frequently you have another website to which you can mention here as well. What exactly how do you exactly help people and your customers? How do you serve businesses? How do you serve entrepreneurs and corporations to do this bunch of plug that right here right now?
Frank:
Well, all worked on space is a publication that we have a global publication that quiet extent to our core company is actually alliancevirtualoffices.com, and we create virtual officing programs on behalf of startups, small enterprises, legal accounting, financial services professionals, global fortune 1000, companies, government, we create programs that go into flexible workplace facilities, business owners, co-working centers, incubators, accelerators on a global basis, and manage the portfolio of offices for our client companies large and small, to help them achieve a higher level of efficiency. We are while we own those portfolios, that have wholesale arrangements with our inventory, so think of the travel industry, and we don't believe there's such a thing as an office occupier any more. We haven't for years, way before COVID, we've been telling people that everyone is actually a traveler, they're not.
Brett:
We're running out of time. We're gonna do a commercial real estate lightning round because I don't want to miss for our commercial real estate listeners as well as our capital gains, taxes, listeners, I mean, you said 195 projects before you kind of shifted from the real estate world to the technology world with remote working, and so maybe we can even have you back on another show to talk about all of those things. But for the first question on the lightning room, Frank, I'm just curious, what's the biggest frustration when it comes to the 1031 Exchange, or Capital Gains Tax Deferral Options, when selling highly appreciated businesses or real estate? What have you found there?
Frank:
Limitation and choice, we didn't do too much 1031 in our current business model, but in a prior life, during that yachting experience, I owned a lot of residential properties and went through a lot of 1031 exchanges back then, and I just say limitations in choice for me. Not always being able to find the right property at the right location at the right price, and kind of letting the tail wag the dog, and so I honestly gave up that approach, and I just look for the best, most opportunistic acquisition I can make, and I don't worry about the exit. Because if I buy it right, I know I'll sell it right.
Brett:
We call it the shotgun wedding. When you get engaged in 45 days, and you get a buyer, you get to get married in 180. That's you run around their hair on fire, low inventory. Sometimes the reason you're signing is that it's a good time to sell but apparently want to sell high and buy low, sell high and buy higher 180 days later with more debt, and again, let the tax tail wag the investment dog. It just doesn't work all the time. in 2008. As part of people got hurt, they had overpaid and too much debt, not enough liquidity or diversification, and here's the thing they knew they were overpaying and 04 05 06 07 but they felt like they had no other option except to the dude the 1031 Exchange and so here, Capital Gains Tax Solutions, we do offer something that's an alternative. It's a backup plan that eliminates the need for a 1031 exchange altogether. It's called a Deferred Sales Tax and so if our listeners are listening and resonate with what Frank is saying and what I'm saying you can go to capitalgainstaxsolutions.com by the way it works for public stock private cryptocurrency primary homes, investment real estate and it's the Netflix way of doing things. Take a look at capitalgainstaxsolutions.com. Next question, Frank is this knowing what you know now if you go back to your 25-year-old self, what's the one Golden Nugget, he would make sure to tell yourself to do?
Frank:
Dramatic pause. They're not a long way back for me, my friend. What would I do differently? I think I would have chosen my partners more carefully. I think when you say, I've got a guy and we're friends, we're going to start a business together, you're going to do something, it's really a marriage, and divorce can be ugly. I think I would have been chosen, had more care, and who I chose to do business with financial partners, institutions, I took their money should I have the same with individual partners? Some of them have been wonderful and amazing, and some of them were less so. I think that that's one thing I would just say like, if you're choosing a mate, be very careful in how you do.
Brett:
What's the one question to help clarify, choosing the right mate that you would make? Sure you would have asked that you perhaps didn't ask?
Frank:
I have no idea because every one of them is different. The circumstances and the conditions and the people? I don't think there's a one size fits all answer there. I think the sort of two things in my experience, ask your wife, and that might sound funny, but another person that's very close to you can sometimes see things that you're looking at differently and have a profound impact. If you have someone you're close to in Ireland, ask them before making that kind of decision. The other thing, everybody says, is to go with their gut. Go with your gut, what does it really feel like? Did you feel good about this or feel bad about this? Did you do something you didn't really think you should do? Well go with your gut sounds good, but only if you have enough experience in your gut, to make it worthwhile to make it really doing something. If you're experienced at something, you can go with that gut feeling a lot better than if you're inexperienced, and if you're not fall back to my first, my comment a minute ago has become the best. Really do your research and study.
Brett:
Frank Cottle this has been a real pleasure to connect with you glean some wisdom, and tons of wisdom, and learn more about the remote working space. I'm gonna ask one last question, and then we'll wrap it up and remind listeners where they can find you. After all, your success and all the people you've helped all the deals you've done, and the businesses you've grown, how do you stay centered in your values, Frank? How do you stay encouraged to charge forward to reach new heights?
Frank:
I think that it really just comes down to enjoying what you do. values are pretty simple. You either have them or you don't. If you do then you shouldn't have to worry about it too much. But keeping interested in things I'm always intrigued with learning something new and then applying myself to it. I'm never concerned with yesterday I'm only concerned with really today tomorrow will take care of itself if you do well today. I'm very now oriented What do we have to do today? And that means that probably more of a person focused on execution than I am on vision
Brett:
Well Frank Cottle it's more than a pleasure getting to know you a little bit here on the podcast. I went on minor lessons you can find frank@allwork.space as well Frank, your other website you mentioned.
Frank:
Brett:
Frank, encouraged to keep using the gifts and talents you've given been purser of someone who perseveres who solve challenges who finds creative ways to build and perhaps circumstances that some people won't see right and I appreciate your time and energy you've put into this podcast interview and thanks I want also want to thank our listeners for listening to that episode of the expertcresecrets.com podcast where we believe most commercial real estate brokers, luxury realtors, they struggle with clarifying their passive income options I have a clear plan is the enemy and using a proven brokerage strategy such as the eXp commercial model and purchasing investment real estate is the best way for you to grow your wealth. We're also streaming on capitalgainstaxsolutions.com. Remember, we talked about the deferred Sales Trust today. It's an amazing way to eliminate the need for the 1031 exchange all sorts for high-end primary homes cryptocurrency you can go to capitalgainstaxsolutions.com to learn more about the Deferred Sales Tax, please rate review, subscribe. It means the world to us to share this with those who can believe it could be helpful for Thanks so much, everybody. Have a great day.
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