Dialogues

Imagining The Evolving Post-Pandemic City Landscape with Willie Hoag | the Robert Benson Interview Series

September 03, 2021
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Imagining The Evolving Post-Pandemic City Landscape with Willie Hoag | the Robert Benson Interview Series



For more coverage, browse our Digital Issues for highlights of the Robert Benson interview series, related articles, and much more.

cA: In the January-February and March-April 2021 issues of commARCH, we asked leading architect Robert Benson to interview key individuals about the transformations currently occurring and what we should expect in the future regarding the built environment. For a transcript of this conversation, more interviews from the project, and full digital issues of the commARCH magazine, please visit the commARCH website at www.commarch.com.

Willie Hoag is Principal and Co-founder of Tether Advisors. Hogan embraces a long-term approach to client services, while remaining keenly aware of trends and technology that will augment or disrupt the businesses he serves. An early acolyte in the integration of health and wellness brands into the evolving retail landscape, Hoag developed has consultative acumen at Mid-America for over 15 years, where he was a Partner and Director of Tenant Representation.


Thank you for joining us, let's head into the Dialogue.


Robert Benson: I do think there is a issue with technology in that I now have to track Instagram direct messages, text messages-


Willie Hoag: I know... (Shaking head)


RB: -emails to numerous accounts. And I'm sure that there's voicemails, there's always media and artificial intelligence is so bad. I really need an entity that just looks at all the fingers and shows them back to me in some way that I can work through it, because it's absurd.


WH: We're just at that weird point that we get into very often, with the exponential technology curve where we still have this - where the refrigerator was too big, so people were still using the ice chest outside, where the mainframe was too big, so the PC was but a dream. Right now the Slacks of the world - these intermediate technologies that are supposed to tie things together - we're about three to four years away from AI to actually mean something. And yeah, it's really frustrating because we can see it. It's right there.


RB: So, with that in mind, what technology do you think impacts the most in the post-pandemic? And I want to stress that with regard to the three questions, before we get into it, I'm not thinking about architecture. Just because I am an architect and because this is for Commercial Architecture magazine, the questions are not really designed about that. And when you really think about architectural design, you realize it's not about the architecture itself, it's really about everything else. In that way, it could be any technology, it could be anything.


WH: Yeah, and if you had asked this question pre-pandemic in my world of commercial space - consumer space - I would have said that every pageant or board or podium that I would speak at, it would be a notion of, what is the autonomous self-driving car - we've reached peak car usage, what does that do to parking garages? What does that do to, as the urban Renaissance has taken hold from Chicago to Tampa, to Sacramento and everywhere in between, and we're gathering closer together, a lot of this conversation was highly based on the car, as it was in 2008, in Chicagoland, the death of the exurbs, of driving 50 miles out to Yorkville to get an extra thousand square feet. Price of gas went so far up, before or around the recession. And it was like, that was the start of moving back in.


Now, it's an interesting one. I think - I can speak on this from two fronts. One is, as a new business owner, these technologies that are going to be coming down and making us feel - making us protect culture and connect better, to what we just started off speaking of, is going to be the great question, because right now they're not there. They've been accelerated as everything has during this pandemic, but how to - how much space are we going to need close together, if these technologies can actually be more efficiently tying us together? And what is that hybrid going to be?


I think it's - the Slacks of the world, the mobile office technologies, they're here, but it's going to go so fast now, in the next year, of how fast they really become. Right now, they feel like a bolt-on, and I think they're going to be, there's much more integration that they're just going to feel part of our normal concert of connecting with people.


RB: So do you think that if our connector software actually gives us more opportunity to connect, that we will do so less than person and this sort of trend of virtual communication will continue and expand?


WH: I hope to God that's not true. I mean, I look at my Outlook calendar at night and I'm like, "Oh, I did leave some time to be creative". There's something about the Teams, Zoom world, where people feel very comfortable time-blocking an hour. And there's just this assumption that even if you don't reply to their Zoom invite, you're going to be on it, "Where were you?" If they were saying that with a lunch meeting, we would go back and forth and say, "Sorry, I couldn't make it." We would be more rela- sometimes I don't have anything to say to these people when I'm on the phone, but we need to there's this obligation with the Zoom invite that it's such an autocratic, take it or leave it.


And I will also say, in my own experience, I'm the best at the Colombo close. The "just one more thing," where I get the extra 20 minutes, which for me are - it's the foundation where friendships and loyalty and quid pro quo starts, is that extra 20 minutes you get in-person. There's this counter-intuitive thing with Zoom and Teams. I can get any CEO or founder, I can get in front of a screen and actually have them as an audience, more than I ever could. I can not get that extra 20 minutes, which is the lifeline for a relationship. So it's kind of a commodified sort of communication that I don't think we'll ever quite get to the level of loyalty, fiduciary, friendship, screen-to-screen.


Having said that, I'd have been amazed if you had told me three years ago that I could earn the right to service clients in their expansion efforts, across the country, without them ever meeting me, with a Chicago address and them just saying, "Hey, it seems like you're doing a pretty good job," that's been a weird twist to that whole thing. And I almost feel more obligate. I feel like it's more of a tight rope because I don't have that personal relationship of, "You've met me, though, you know I'm trying for you," that commodified thing - you can earn business really quickly on the screen, but how sticky is it if you can't actually be in front of the person.


And in front of the person, you've got a mask on and, you know me, I rely on my facial expressions that as much as anybody to, you know, exude my emotions. It's a weird way to communicate, but communication is the number one subject for technology, what technology is going to do to communication.


RB: And do you think Steve jobs got the Colombo close from Colombo? I never put those two together until you just said it, because you- (Overlapping)


WH: I haven't read it (Overlapping) I didn't - does Walter Isaacson mention that? I've never read the book.


RB: No, not at all. I did read the book and I don't remember that, because it was "one more thing," for Columbo was like "Uh uh uh, wait a second, I've just got one more..." and it might've been one more question.


WH: It was just - it was like, "Just one more thing..."


RB: And Steve jobs was, "One more thing". So I think Colombo was the question, I'll have to look it up anyway, hilarious. So, you know, you started talking about communication and technology are obviously critical. What social behaviors do you think will be changed the most post-pandemic?


WH: I feel in many ways that I am at the epicenter - fortunately, or unfortunately - of this question, because, for 15 years, being in the world of retail real estate and really having a focus on a lot of fitness and recreational tenant representation - you know, we have to remember that for the past three to four years, restaurants and fitness - but also recreation - has, in some ways, artificially propped up the tenancy of retail space. Malls were saying, we need more experiential. We obviously are overbuilt for retail space in this country, but our solution to it over the past half decade is, "Well, another restaurant will come and take that space." And the Instagram-able population would have restaurants that they could take a picture of their meals, and people were working to go out to eat and to be able to go - at least in cities - to be able to go to Orange Theory and their spin class and belong to Midtown Athletic.


Food, fitness, and fun dominated, and was going to have its reckoning because it was ultimately cannibalizing itself. You can't keep throwing more and more restaurants, paying higher and higher rents in Fulton Market. When they're now competing with each other and the margins are getting a lot smaller, and the high cache into obsolescence is happening a lot faster, things lose their hook. The social behavior of rubbing shoulders together at restaurants, and the ambiance of the pick-me-up-in-your-spin-class by looking at the guy next to you, and the trampoline parks of the world and the Dave & Busters, they're going to face a real disruption. They were going to face one anyway. But I think that's going to be the interesting social behavior, is now with DoorDash, now with ghost kitchens, now with more and more DoorDash and GrubHub, they were - these restaurants were facing a reckoning from the restaurant that just opens across the street that's newer and fresher.


Now you're competing with the whole city because you can order from - I think what's the gold belly, you can order from either coast. You can get a lobster claw and you can get deep dish pizza. And in Orange County, these social behaviors, I don't know. I know you as - and I have this too - a little bit of a see in-person, talk in-person curmudgeon, if I may. I want to be out more, but I'm also - I'm thinking that I'm going to be more careful about travel. Communication, travel, and food fitness, fun, all go together. So I think that's probably the social behavior. I can't imagine that we're going to be a population that eats out four to five times a day. We're not going to have the restaurants next year - or at least the supply of choices to be able to do that. Yeah, I think social behavior-


RB: Do you think the, you know, that bowl of peanuts at the bar is done?


WH: Yeah.


RB: What about the handshake?


WH: Done.


RB: Yeah?


WH: The handshake's done forever. And my muscle memory it's kind of - I think it's done with it. I think the close - again, the close fitness, stack 35 people in a 1200 square foot room and sweat it out together, it's going to be a real interesting one to see how that comes back.


RB: Yeah I think the - think about a mosh pit, or concerts or some of those things where you're literally, swarthy and in the - it's one of the areas where in public, your personal space can be violated at times, and be okay with that. I wonder if that's going to continue, or is there something else that comes in and says, "Well, everybody, if you prove vaccination, or if you've proven that you've taken steps-" or whatever "-you can enter a safe zone and now the rules are different." And I'm not sure how that's gonna work- out. And like, the handshake was such a customary thing - it actually, in my mind, did tell you something about the other person.


WH: Right. (Laughing)


RB: Whether it was a firm - shaking Mayor Daley's hand was just like this (Gesturing) . Or, the dreaded sweaty palm, you'd figure out the sweaty palm guy. You kind of got information from that, now what? Now how do you get that information? Are people willing to go into a full conference room? Are people, when they get to a restaurant - it used to be, if it was half empty, you should leave. Just get an appetizer and get out of there, because it's empty and it shouldn't be. Now I wonder what cues we really - when we really re-emerge, what rules are different. And I think it's a huge question.


WH: It's interesting again, though, that the - I think the foundation was laid, that we were living ever closer, more and more people were moving into urban, dense urban areas. But ironically enough, the sense of community was reduced and diminished at the same time, that you weren't really talking to you - at least I can speak to this in Chicago. It was almost like, Purge time. Don't even talk to your neighbor, just go right in when you were done with work. So we were inviting this ambiance of community while at the same time, shunning it.


And same thing in a bar, I try like hell to put away my phone and really do it how it used to be done and take everything in, maybe strike up a conversation next to me. That's really threatened. I don't know if that comes back because now there's the outright excuse. The phone's already an appendage to us and the next generations coming behind us. Now there's no shaming even to just be head-down, 'cause you're avoiding sickness if you don't talk to the stranger next to you.


RB: I think before the pandemic, if you weren't - if you were by yourself, just sitting there looking around the room, you're a creep.


WH: Mhm.


RB: You really had to have their phone as a prop to make it look like you're doing something. Very strange. I think the other thing with the city is that - everything I can tell, no one, even though California is losing population as a state, New York is losing population as the city. Chicago has been losing population as a city. A lot of large cities are losing population, more so in the pandemic. I think the trend is still worldwide - it's absolutely still, cities are growing. And I think even in the US that'll continue. What I think is interesting though, is where they're growing. And the north side of Chicago, the density has been dropping. And that's why a lot of restaurants and bars are failing because what used to have a three flat or a four flat full of three or four roommates each, all headed to the bars and dinner a couple of times a week, it's turned into a single family home that bought three lots sideways and they don't ever go anywhere, because they have kids. I think that there were pre-pandemic changes that are certainly at play here. And now they're going to be exacerbated.


From a market or a typology standpoint, what do you think is impacted the most? And maybe, I guess, the question - the big question - would be, what can really take advantage of post-pandemic, new normal.


WH: It's a great time to have a good - again, this is my world - it's a great time to have a good restaurant idea and not have the obligation, the yoke, of leasehold obligation right now. Because there's going to be so much cleared, it's going to be the controlled burn forest fire and the green shoots coming up after that. If you have a great entrepreneurial idea that is going to rely on brick and mortar space - and I don't want to not be empathic to the bloodletting that's going to go on in the next three to nine months - but it's going to be, you're going to see a radical re-imagining of dining, principally - and I really highlight dining because, to your point about urban living, it's not going to go away, but we've turned every city into a live-work-play environment. If we don't need to work there seven days a week, if we have 25 to 30% less restaurants, and some of our fitness studios are going away, and we don't want public transportation as much, you're going to see a real binary divide between cold weather, difficult, mature city and warm weather. It's - that's happening.


Yes, the systemic pro-business side of a Boise or a Dallas is helping to fuel that growth. But so too is seasons where you can actually get outside. Four seasons and being able to not, you know, put our kids in the basement, is going to speak to truly significant headwinds for a lot of these Midwest cities, that we're facing already some chinks in the armor systemically and seeing their best days. So I think - we talk about markets in a different way, I know, but geographical markets, I think that's a huge - you see it already. It was happening. And yes, the corrupt tax system, blue cities are a great place to live, but it's climate over anything else right now.


RB: It's hard to imagine a restaurant coming back, like a restaurant used to be, when I see a Linea doing takeout, I'm thinking that the new restaurant is a different beast. You referred to ghost kitchens. How do you think restaurants adapt?


WH: I represent a group, Lazy Dog. They've expanded in the suburbs, as an example, they - huge full service dining, taking the old twist of the Darden's of the... the Olive Garden Yard House and making it cooler for a new generation, where you would actually excuse yourself and pay for a babysitter. To go out to a quasi chain and rotate a third of the menu seasonally and really be food first. And obviously they're at a point where they had 30 restaurants and they were just really developing their brand and they, like all of my clients, are saying, "How much space do we truly need?" Square footage and efficiency is huge because these restaurants, if they're going to a model - and I don't think this changes, I think there's going to be a lot more delivery because some of these restaurants have learned how to do it - I think you're right. I think the restaurant experience is going to change because I don't think you're packing in - they would have 348 seats in an average restaurant. I think their private equity is going to tell them, "What, can we shrink this by 30% and get the expansion going again?" But I think the other thing that I'm seeing across the board coming out of the pandemic - and I see it in healthcare and I see it in dining - is micro-targeting and niching yourself.


This same group, Lazy Dog, has - one of the C-suite members there founded a restaurant that was based specifically on hyper-acute attention to food allergies. Putting in standards and practices that haven't been seen before. And ironically, some of the stuff he's doing was perfectly made for this pandemic in terms of cross-pollination, in terms of cleanliness, in terms of sterility, and showing an open kitchen, showing how clean - that you don't need to worry about who's touched this. They opened a couple of weeks before the pandemic, unfortunately, so it's a real crappy situation, but the concept in and of itself is fascinating.


And I'm seeing a lot more of that. Not beating yourself into a corner, but land on exactly that niche, which you know so well. Cater to that, and the rest will come. You can expand from there, but start specific and slowly expand. It breeds authenticity. And I think authenticity is brand and is sustainable in the new post-pandemic world.


RB: Authenticity. That's - I think that's true, especially in the urban setting, I think particularly. You mentioned food, fitness, and fun almost as if it was a typology in and of itself. Any new typologies or hybrid typologies that you are expecting post-pandemic?


WH: I mean that's a pitch right down the middle. You know, we started Tether on the basis of medical coming into retail increasingly, and the de-stigmatization of different medical concepts, because if this has been nothing else, this has been a referendum on preventative wellness and more convenient access to self-care, that we're not - we shouldn't be a fee-for-service world necessarily in medicine, because that is going to bankrupt the system. It's going to weaken our nation's defenses. It can be a generational pox upon a family economically, and we have all this space here, that's built, and you don't have a lot of new uses that are really finding funding. So that lag time in between, we've done a ton of business development at Tether on the basis of more convenient access to space. It's going to be health and wellness moving more and more - as fitness already was - but health and wellness moving more and more into consumer space is here to stay.


And I think there are more and more categories that right now we're getting into 2.0, whether it's concierge primary care, like One Medical or Forward. It's senior primary care like Oak Street Health, where they're getting into healthcare deserts and bringing a bus and reaching out to the grand nephew or the stepson and saying, "Hey, we need your relative to be comfortable coming into our clinics because we need to - instead of just saying, okay, we had a problem that we didn't deal with, and now it's going to be a shock to the system, we can catch that beforehand. We can save your family money. We can make the last decades of your loved one's life better."
So I think preventative wellness is absolutely the answer to that and mental wellness and doing opioid and drug rehabilitation in a better, more holistic way. And we blissfully have all this space that can weave into the everyday lives of the consumer and we're all patients. We don't all buy shoes at DSW. We all need to go to the doctor and do a better job, frankly, of going to the doctor. So I just think that's the name of the game and it's right in front of us. Unfortunately it had to hit us like a hammer on the head.


RB: What about hospitality? How do you see that fitting in? You know, I think there's going to be some enormous pent-up demand for travel of the vacation variety, and you yourself said you're going to think twice about traveling for business. However, the in-person - in-person moment, the in-person connection, the collaboration in-person, it's very clear that is much, much improved over virtual or digital collaboration experiences. So, what's the role for the business hotel or the urban hotel that caters to both vacation and travel and business? How does that fit in?


WH: It's a good question. And I think, once again, I don't know what the cart or the horse is because when I have been traveling - and I've had to a little bit for business - you cannot at all get the pulse of the city, and understand, okay, there's some depth to this, it goes down - even that block, it's not just this one main street. This could go on, next year, I could see where they put some new restaurants over there and this - it's going to go vertical over there. It's so stunted and it's very difficult to just gauge the soul of the city right now, which is - along with the in-person interaction and really making clients or new introductions into friends - getting the pulse of a city and staying at that cool hotel in the middle of the city, the cool business hotel, it's a weird experience. And I think it's a weird experience, frankly, until herd immunity hits.


 I'm working on a couple of deals with guys who had, land parcels under contract to build, a Marriott or Hyatt brand. And they were optimistic and the deal took a dip when it was announced that the vaccination was going to be disseminated. And now they're back to me saying, "Oh, wait, we got 12 to 15 months of this before any sense of normalcy returns." So, from a hospitality standpoint, yet again, like restaurants, if you have a portfolio, that you're managing 18 different hotels right now? You're hurting. If you have a new hospitality group, if you're a 44-room boutique and you're not open yet, but you're about a year away, the world is your oyster. And I think you're not gloating about that, but it's true.


RB: So you think - let's say that, when we say post-pandemic, let's say herd immunity is achieved. So that literally could be 24 months from now. It could be more. Or we just accept the fact that coronavirus, like many pandemics, begins to - SARS-COV-2 - it mutates, but it mutates to a weaker form, which is the trend of most pandemics, according to current science. So we may not even get to herd immunity. We may just begin to live with an annual coronavirus shot, let's say. So that hotel two years from now, does it have the same role, in your mind, in the business community, or in the urban community, that it did before the pandemic? Or is it different or too hard to tell?


WH: Depending on where you're talking about, it was already changing. For our geography, the Oak Brooks versus the city. Because, you would talk to some guys who were in the hospitality industry and they would say, "I'm not rushing to go build the next, updated Hilton flag in Rosemont or Oak Brook." On the other hand, they were running to do the 40- to 55-select-room, cool, boutique bar urbane, cosmopolitan kind of forced-limited-supply - to force demand - the 21c's of the world. That was already changing a little bit, but again, it's too early to tell. Because what is the resilience of city propers?


How long is it going to take? The cities - in 2019 cities, were never cooler. Go down the list. It used to be you'd have your top six cities - of which Chicago was one - you had your next line where you're like, that's a good place to spend 48 to 72 hours. Then you had your next line where it's like "Ahh, that's podunk," or "That's a pretender." The pretenders - we had 50 to 60 honestly cool cities to visit in 2019. How resilient all of them are up for grabs, on an urban Renaissance that was going to have a day of reckoning, no matter what, and had some fragility, but not like this, not with empty storefronts and a lot of systemic - where do we get sales tax to do what we need to do to make cities cool?


RB: Yeah. And that makes-


WH: It's going to be-


RB: That makes me think of two things. One, the authenticity point that you made. Because I'll tell you if you go to a flag and there's a AC bar that looks like it came out of a catalog, and it's the kind of bar that literally no one would ever walk in to go to unless they happen to also be staying there. That doesn't count, in my mind, that's a disaster. That thing closes at 8:30 and it probably never opened any way during the week. And then there's the other kind, of the 21c's that you're talking about, that is a hotspot for that location and you happen to be staying at a hotspot.


So that was a really cool condition, but it also makes me think about whether or not the... I lost my train of thought here. Oh - which is it? The pandemic. Or the civil rest that has a greater impact - civil unrest - in some of the issues that we're grappling with, which is a greater impact on this topic?


WH: I think, I mean they're - they're obviously intertwined- (Overlapping)


RB: It's a tough topic I threw at you. (Overlapping)


WH: They're intertwined in terms of - you have cities that are inherently segregated, who acutely feel that more, who have been kind of, you know, "Don't talk about our family things in front of the neighbors," sort of things with some cities. And ours comes to mind. Boston comes to mind, Milwaukee comes to mind. Not for nothing, again, these are cold weather cities. The civil unrest, I can tell you, it didn't seem to affect - and it hit in Manhattan Beach, but I went Orange County and I went LA county in the midst of the pandemic. And they were very different experiences, but it was much more pandemic than it was civil unrest.


From a shop owner, entrepreneurial standpoint. I talked to a lot of real estate investors, developers - the investor confidence in Chicago has never been lower. They've never been more dispirited. There's a permeating pessimism that it's - why should I even start this new project? From an investor standpoint about buying real estate - and obviously everything over-calibrates, this is going to come back same way the suburbs have: suburbs are dead, long live the suburbs - but for Chicago, right now, you talk to any investor in real estate. And some of them, some of the real estate - the reads - are like, "I'm divesting myself of everything. Even if it has a grocery store anchor in the Midwest, I'm going to the south east, I'm going to Florida. I'm going to Texas. Show me something in Salt Lake City, before Chicago." 
And it's not those two things, as much as it is our tax system.

RB: Hmm.


WH: And we are at an inflection point that is so crucial, of survivors who are saying after the pandemic and after getting in their windows smashed in, if they are able to finally limp along and 50 and 70% of pre-COVID revenue, for that luxury, they're likely to hear Fritz Katie and his his band of transparent, perhaps well-meaning, group, "Hey, we're going to tax you more." And it reminds me of the recession, where you got those people who were short sellers, who were like, "Hey, my neighbor just - he signed the same contract as I did. He couldn't make it. He just gave up his house cause the loan was worth more than the house. What about me? The principled man, who believes that you can't do that? Who is the sucker?"


We are at an inflection point where we need that sales tax and that money, and that rent. And the landlord needs it because his bank is just about out of tricks in the toolbox for deferring terms, even abating terms, principal only, et cetera. I worry not about the 25 to 30% right off in the food, fitness, fun, but that that next layer that's just squeaking by gets taxed to hell. And worse than taxed to hell, not even being able to quantify it because the system is so opaque and messed up. So that's the third and probably most important part of your triad there. This taxation and just, pension problems that we were facing before is a mess

.
RB: That certainly, yeah, that certainly has a huge impact and I, yeah, I should've mentioned that. I think, I wonder if those, if any of this is connected, that the places that have the major tax problem are hit any harder with the civil unrest, are they, are there issues that are part of that? It seems like the pandemic is just rotating around the country with hotspots and we seem to be in a low point. You know, other areas are rising back up and it flips and flops back and forth like a wave. But anyway, adaptability, any other last thoughts on just general adaptability in the new normal?


WH: Man, I think like exercise and sanity - and again, I'll go back to preventative wellness - I don't know how you can be adaptable if you don't first take self-care into account, and I don't know how you feel, but I just, some days, it's just like, "What's it all about, what are we doing?" Some of my clients, it's hard for me to not say to them,, "Why... you're doing a new - you want to sign a new lease right now? Like, why don't we just wait until the smoke clears?" And I know that's antithetical to the (Laughing) deal closer I should be, but it's - I check in with myself more than ever. And I did a really poor job of doing that and I need to do it as a leader for my team. Else I can't be adaptable or creative if my headspace isn't right.


And I think that's - it might be trite, or that might be too broad, but that is... I don't know what the adaptability is yet. But I know that I can't have it unless I'm in the right place creatively and taking care of myself.


RB: Oh, I think that's a really good answer and a good way to close. I can't thank you enough for participating in this thing.

cA: Thank you for joining us for this episode of the Robert Benson Interview Series in commARCH Dialogues. To stay up to date with commARCH content, please subscribe to our YouTube channel and follow us on your favorite podcast platform. For more content like this, including a full transcript of this interview, other interviews in the series, digital issues, and more, please visit the commARCH website at www.commarch.com. Thanks for watching.