Episode 44 - Todd Runkle/Gensler
Michael Scharf: Austin is the new innovation powerhouse, not the next Silicon valley, but the first Austin, we are adapting to the future in real time.
Jason Scharf: I'm Jason Scharf, a biotech executive, and early stage investor.
Michael Scharf: And I'm Michael Scharf, advisor and board member for multiple private companies.
Jason Scharf: You can call us optimists abundance minded up wing, and even solutionists we see a bright future ahead that can be achieved through innovation and entrepreneurship.
Michael Scharf: In this podcast, we explore Austin superpowers, the people and companies driving our growth and the macro and micro trends that come together to create Austin today.
Jason Scharf: This is Austin Next
Michael Scharf: Often how we live, work and play. Is determined by where we live, work and play the buildings we occupy can range from condos and offices in the central business district to the wide open spaces needed to test drones and farm equipment. Creating those spaces are the job of a lot of people like our guest today.
Todd Runkel managing director at the Austin offices of Gensler. Todd brings more than 25 years of professional design experience to the leadership of Gensler's local office. He has a wide variety of projects with a focus on large scale master planning, and multi-family projects. Before Gensler he was a founding member of a boutique interior design firm.
Today he's recognized for his focus on client needs and the ability to work with clients to find creative solutions. Todd, welcome to Austin Next.
Todd Runkle: Well, good morning. Well thank you for having me look forward to the conversation.
Michael Scharf: Absolutely. We're here in mid 2022, 2 years after our world just got turned upside down.
And not only has a lot of things changed, but I think the pace of change has done nothing but increase. Can you describe some of the changes you've seen and how they impact everybody?
Todd Runkle: Sure. So, you know, I think a lot of things, obviously the, the hybrid model of working from home and working in the office has certainly created challenges.
Everything you've read in the news and the papers, but I, I, I think it's more about the culture that has been impacted in companies. And, and I think in individuals too, you know, I think the more we're remote. Provides more challenges and, and possibly less collaboration. It's almost forced kind of indirect collaboration as we kind of refer to.
And it's it, it just presented a whole series of new challenges in terms of in the creative fields. Like what we're in is how do you produce the most creative solutions for your clients? When you have people scattered all over. I mean, Gensler's been working remote and from around our firm in, in 50 plus locations for years, but I think it's the first time when we've had people who are traditionally sitting next to us, where you could just stand up and have a conversation or sketch or collaborate together where you're not able to do that immediately.
And it just, those challenges have been an interesting opportunity to figure out how do we create the best solutions for our clients.
Michael Scharf: We've talked a lot about that hybrid work environment and the chance for collisions and creativity, as you mentioned,
Todd Runkle: right.
Michael Scharf: Kind of getting reduced. How are you guys facing that?
Todd Runkle: Yeah. You know, we, we do these online collaboration tools, Miro boards, and so on. But, you know, again, I think as we transitioned to be a hybrid model, we focused on specific times where we are face to face to collaborate in person. And again, I think we've probably been a little bit ahead of the curb, at least in our firm of getting people back face to face intentionally.
So we can, you know, it's almost like a scrum where we get people back for a specific period of time, get that collaboration and then people can go work. At home or they can stay here in the office or whatever. So it's a little bit more of an intentional collaboration model that we've adapted to. And, and I think that has worked.
So I think as we move forward in the world, I don't think we'll ever be back to a nine to five or an eight to 10 or whatever we use how we used to work. But I think this kind of intentional collaboration I think is, is a positive.
Jason Scharf: I really like using the word intentional there and I tend to think of it also like activity based.
Todd Runkle: Right.
Jason Scharf: Because a lot of times you see people use that pure continuum. We're remote we're hybrid again, whatever that means, right. We're in person. But there are things that really require in person collaboration. There are things that really don't, and there are things that are collaboration. You know, if I got a 30 minute one on one, like zoom is fine, but I like that we, we think about both culture and collaboration.
Todd Runkle: That's right. That's right
Jason Scharf: in this new environment are really having to be intentional.
Todd Runkle: That's right. And I think, you know, Elon came out and it gave his directive of getting people back where I think, you know, we're, we're not gonna be that specific, but I do think there is value to being face to face back in the office at a certain amount of time for what we.
And again, in the creative industries, we have to be back face to face to really produce the best solutions for our clients. I mean, it is just, it's impossible to work remote and virtual indefinitely in our business.
Michael Scharf: I think you're right. And I think that's true in a lot of businesses. One of the things that's come with this of course, is mobility, not only inside the city, but from one city to another.
And. Lots of people ourselves included have exchanged living in one Metro area for living in a very different Metro area here in Austin. from an architectural point of view, what happens to a city? And, and what do you see when a city like Austin is looking at two, 300 people a day coming in and relocating to this area?
Todd Runkle: Yeah, so I think a couple different things on mobility. Number one is, you know, Austin is. Significantly behind on public transportation and a number of things. And that's a whole, you know, happy to discuss that too. And I think that sense of mobility as we get these influx of people, we have to solve that problem.
And again, I think it's the mobility within, from the suburbs of people remote to working into the city. And I'm a firm believer, cities are always going to thrive. And again, I think people will intentionally come down to the city for the amenities that Austin's been great about. Delivering as a great city, but I think the mobility, in my opinion is if people are gonna continue to migrate to Austin, as well as.
Cities, you know, Raleigh for example, and, and, and other Seattle and others. But I, I think just we're significantly behind on the public transportation efforts. And again, I think if you know, the next mayor, if, if Kirk Watson or whomever is influential in getting that achieved, I think that's probably one of the most significant achievements, our next administration, as well as the architecture and design industry could, could provide to the city of Austin.
I think that's, that is the, if we don't solve that, I think the future of Austin is, will limit itself.
Michael Scharf: So let's continue along that theme is the cap Metro project connect the way to go. Is it fixed rail still?
Todd Runkle: I think it's a combination of fixed rail. Yes. I think we have to do some kind of rail system.
Absolutely. And I, I will commend the cap Metro group to the, the preliminary plans that we've been involved with. It does connect. Downtown to the university, to the airport, to some sub suburban location. So I, I will commend them where I think some cities that they've embarked on public transportation, it didn't connect enough locations to make it impactful where I think as ambitious as cap Metro's plan is, I do think it's it, it does connect the right locations to make it a viable long term solution.
Now, the economics are overwhelming in terms of how do you achieve it? How do you raise those kinds of funds? But I, I think we've gotta do.
Michael Scharf: it's interesting because at least in the experience we have in Southern California, these rail projects end up being 6, 8, 10 times.
Todd Runkle: That's right.
Michael Scharf: The expense that they were originally promised. And I fear thats an issue that we may be faced with very quickly here.
Todd Runkle: I, I, yeah, I, again, there's certainly not a good track record in terms of economics on these public transportation systems, but yes, I think we gotta get our arms around the economics again. There's no good successful economic model in the US that's been delivered.
And I think connecting. East Austin to downtown is, is hugely important. And again, we're involved in many aspects of that right now that I think that's just another layer that the city I will commend the city and the state for trying to at least push that forward in advance it.
Michael Scharf: Besides mobility aspect, What are the other architectural changes in other physical changes that you can expect here in downtown Austin and the surrounding area in terms of architecture?
Todd Runkle: So I think a couple things, I think, you know, as I mentioned downtown, I think we'll continue to thrive. I think we will see submarkets continue to evolve the domain, which we were part of with Endeavor early on for domain north side.
I think you will continue to see these submarkets continue to expand. I think Southwest Austin, north Austin, with a technology hub, you know, I think it's an evolution of every major city is. There, there is going to be, the next downtown is gonna start to continue to grow. Cause again, I think we are not gonna be able to solve the mobility issue fast enough to handle the growth, in my opinion.
And I think Austin too will become corporate headquarter relocation targets. And, and again, I think we've started to see that, but we really don't have a lot of corporate headquarters here yet. I think that's the next evolution. And I think that will transform the suburban market into larger.
Submarkets than what exists today. You know, again, I think a submarket historically in terms of square footage is millions of square feet. And I think the domain is at that point now, but again, I think you'll start to see two or three other submarkets that I think that will reduce the rental cost.
You know, the triple net cost for office space. And I think other mixed use projects will continue to evolve. And I think, you know, Southwest and lake Travis and those areas, I think those. Untapped markets that I think could thrive dramatically.
Jason Scharf: So I wanna pull that thread a little bit. We've had a couple of episodes kind of talking about this multi hub nature of Austin polycentric geography.
There was an article I read recently talking about how there was a bit of a gravity shifting north, where if I think correctly was like, you know, the number of people in Williamson county who would go from Williamson to Williamson growing.. It was increasing that number. And you're seeing kind of, as you said these kind.
They're all having their little downtowns and it kind of be this real smaller city that has all of the amenities. You know, every single week I also hear about Georgetown is, has this, that or the other right. Georgetown Leander are just exploding. Right. So how do you see, and you said you're gonna see a lot of that.
You expect that, you know, the, the city downtown and the amenities to still be thriving. What do you see that relationship when you have. The, you know, central downtown versus these kind of other markets and what is the interactions between them.
Todd Runkle: Sure. And, and I think the one thing that we've done a lot of research on is we believe in kind of a 10 minute city that you have to get to everywhere you need for all your personal, your work, your live, your play, all those things within 10 minutes.
Beyond that. I think it's the culture amenities that I, that I think people will want to come to the downtowns for. I do think it's open spaces too, which I think Austin is possibly behind. I'm creating great open spaces, parks, and so on. We have a lot of, you know, I think with Ladybird lake and a lot of things, but again, I think it's the investment in Waterloo park, which has done an amazing job and other things like that is what we need in the downtown.
And. Urban areas to, to create things that people want to come down to. I, I, I truly believe the 10 minute city is. It really is where, where wherever you live, you're gonna want to get to the grocery store. You're gonna get to some level of place. You can work where you can work remotely within 10 minutes.
I think you want to get outta your house. But again, I think it's these, these other modes that around cities that will continue to evolve. And again, I think Austin's been a huge proponent of these, these suburban, mixed use projects that have con that I think will continue to evolve. And I think in Williamson county is going to be the next market, cuz again, I think Austin's the economics of living in Austin.
Like we've seen it's, it's been a result of our success, but again, I think at some point people just will not want to pay to live. As close to the downtown areas. And that's, I think that's just a normal evolution of cities. A again, I think Austin's done an amazing job of creating a downtown of, for places people want to be, whether it's the restaurants, the entertainment, the live music, I think with the new moody center and other things, the, the downtown Austin's always gonna thrive.
But again, I think it's that 10 minute urban city that I think is really gonna be the future of Austin.
Jason Scharf: And I think we're seeing an interesting. Intra-metro competition, because there was a, a recent factory that just picked Georgetown. But when I was reading about it, they said they first picked basic central central Texas.
And then they had 10 to 12 locations and it really was okay. We wanna be here, but are we gonna be in the city of Austin? Are we gonna be in Del Valle? Are we gonna be in Georgetown? So it is interesting. Everyone wants to be in this kind of greater Metro, but then to your point, like what's the, the specific needs, whether it's the space, whether it's the the amenities for that particular type of group.
Todd Runkle: And, and I think it's the cost of living. It's the, you know, it's the cost for the labor force to be able to live and, and thrive there and have the educational amenities. So I, again, I don't think we're ever going to be able to, to. Not slow that down until Austin kind of maxes itself out. But then again, I think it's just the, the opportunity and there is land available in the suburban areas to grow.
And I think chip fabrication comes semiconductor industries. They need a tremendous amount of land area and they even the other driver too is water. I mean, it's, I think that's the, the one component that I've learned that is critical to any kind of semiconductor fabrication is the amount and the access to water. And again, I think the suburban locations offer the opportunity to access water easier than any kind of metro location.
Michael Scharf: It's interesting because before we moved here, I, I was told this was a Texas saying that whiskeys for drinking and waters for fighting over .
Todd Runkle: And I would contend that tequila would be about in the same categories, which we go to.
Michael Scharf: There you go. Okay.
Jason Scharf: well, and it's also interesting to see some companies, the larger ones in this case you. Facebook meta is what I have in mind, starting to lean into that where you have the, their big campus over by the domain, but then they just took 33 floors of, you know, sixth and Guadalupe. And I'll be fascinated as that starts to, you know, obviously post completion.
They're starting to put in how they deal with that from the, from the talent perspective, is it gonna be a, where do you wanna live? Where do you wanna live? And you can pick either, is it gonna be functionally based like, okay, we're gonna. You know, all of our finance downtown. So it'll be interesting how they kind of interact with that, but still within.
15, 20 minutes. Everybody has to come in. Right.
Todd Runkle: That's right. And I, and I think you hit it. I think as number one is where do you wanna live? And what's closest to you to make it easy. And I think that's quite honestly, I think it's a good model. I mean, you know, again, I think on the technology companies, when we do a ton of work for technology companies, it's bringing the amenities to the employees.
And I don't think their expectation for employees to be there 40 hours a week has ever existed in these technology companies. So again, I think it's about amenities that we see even increasing that they provide because when employees do come in, whether it's food, it's, you know, interaction, it's catering, I think to the, the, the thoughtfulness or the cap, the mental capital, they provide to the company and to what they're working on.
I, I don't think it's ever gonna be intended to be a, you know, like I said, a 40 hour work week, but I think it's to get people. Into the office at Google and meta and other technology companies that really provide opportunities for them to collaborate.
Jason Scharf: And I think one of the biggest problems we're all running into now with this kind of large spread, either physically remote sector silos is this want for creative collisions?
And I know one of the ways that Gensler's trying to be part of that is the creation of these innovation districts, right? And you guys are building the one downtown, the moody center is now open. How would you describe this the innovation district and your involvement?
Todd Runkle: Yeah, I think the, and again, we spent a lot of time on this.
I think the innovation district is the intentional collision of multiple industries to create this forced collaboration. I think it's, I, I think it's the intentional cross. See if I can say this correctly, cross industry collaboration efforts. So you would have financial technology firms. You'd have technology firms, you'd have higher education.
And I think it's the intentional mix up of all those businesses within. Very close geographic location, take Dell medical school is a perfect example of that. It's, you know, taking medical education with financial technology companies, as well as other technology companies and forcing them to be close proximity to one another to solve larger, not only health issues, but other technological issues.
And again, I think you'll see Dell medical school be. I think the, probably the instigator of many of these forced collaborations that will create, I think, innovation, the way you solve medical issues, the way you solve technology, how it will influence medical or health related preventative health related issues.
I, I think that's, that's the other component of downtowns that will become instead of innovation districts will become a different type of downtown that. Create people want to be. There is these innovation districts is these kind of forced marriages. As I, as I sometimes like to call is like getting all these companies together that you never thought would make sense to be together.
Jason Scharf: So I wanna go a little bit deeper into specifically kind of the health tech life science, even within the innovation district, especially by Dell Med, as I know, one of the issues that we have in Austin is a huge lack of wet lab space. And I know that that those new buildings that are gonna go up are gonna have wet lab space.
One of the questions though that I have is at least intrinsically for me, wetlab space downtown does not seem the most economically feasible. You know, you know, really expensive space, really expensive in one of the most expensive areas at the same time. When I think about the collaborations with Dell Med that usually when doctors, physicians, any type of clinician nurses are working at Dell Med.
They're doing, they're working at Dell Med... You're not having those. And then they wanna go home, like after 10 or 11 hour shift, they wanna go home. So you're not necessarily having the types of collisions that you would want with those type of folks versus if I'm 20 minutes away and we're doing a, and we're doing an actual collaboration, I can get down to Dell Med pretty easy.
So. My question is, is, is that the best spot for the, say a life science anchor versus somewhere more like the domain more kind of outside of kind of the central business district?
Todd Runkle: Sure. I, I think it's a great question. I think there's two things. Number one is I think there's computational labs and there's wet labs that I think both drive life sciences.
And I think computational is more computer based technology where they're doing that in a, in a tight knit environment. The other is wet labs. I, I do think because Dell Med is where they are. Is the driver. And I think people want to be there because of the proximity to Dell medical school. I, I think that it's, it's, it is a gold mine for the life sciences to be close to Dell medical school.
And I think what their vision is is this preventative healthcare model is to keep you out of the hospital, I think is really a huge driver that, that the healthcare industry is trying to achieve. And I think Dell Med done a great job of doing that. I think that will drive the life sciences to be in the location downtown cost.
I certain. Respect. I think that there may be some ways to offset some of those costs, but I think the cost will be offset by the demand Dell Med provides in terms of thought leadership.
Jason Scharf: It'll be interesting to see the, well, first I agree with the computational and the wet lab, and I think especially here in Austin, Our secret sauce is actually gonna be the constant collision between those two things.
Say you have an, you know, an AI based de Novo drug design company spits out 30 candidates that you move then next door into the wet lab to actually start testing it. Right. And so I think that's gonna be a real kind of key. With that cost and that subsidy and I, and I am a hundred percent behind that Dell Med itself is a catalyst. And I also wonder how much it's gonna be are the companies that are there versus the quote unquote events that are there. Like people wanting to get in. Those are driving the collisions. I mean, even with that kind of subsidy, do you, you think it's gonna be starting to pull in the Mercks the Pfizers the Thermo Fischers
and that's who you probably, who can afford that kind of space and those type of talent versus the startups might more be on the, you know, the outskirts a little bit.
Todd Runkle: Yeah. I, so a couple things I, yes, to answer your question. I do think Dell Med and companies like Dell are businesses like Dell med will be the instigator to drive companies down there for the affordability.
I do think there will be, they'll have to be some subsidy allocated for the startups. To get them to be in there. And I think that conversation has already started UT and president Hartsell announced that they would, their goal is to be one of the leading research institutions in the country in a very short period of time.
And that was kind of their, their, the vision he announced in the past year. And I think to achieve that, they're going to have to provide financial opportunities for companies to innovative companies to be in the innovation district and part of the, the University of Texas. And I believe those conversations are already started with a number of life sciences companies.
And I think the other part to that is central business districts. As we kind of spoke about a minute ago, I think will become central living districts. So that will create people, places for people to live, work, and play in the central business district. And, and again, I think those areas will be a 10 minute city within the downtown.
And again, companies that are involved in the life sciences like you described, I think will wanna be right there within 10 minutes of each other. And again, I think that concentration will continue to be driven by the university of Texas Dell medical school in, in. A significantly positive way. And I also think on the entertainment side with the moody center being close to athletics on the university of Texas, and we helped integrate the master plan for the university of Texas for the campus for athletics, Dell medical school, the innovation district.
I think the overall vision is, is, you know, is one of few in the country that, you know, Harvard has done similar things. Boston, San Francisco with UCSF I, I think the vision. The university and the city have, have coordinated together, I think is one of the most innovative, I think, in the country. And I think in over time when we can pull off all these parts and pieces, I think Austin's probably, like I said, one of the few cities that'll be able to really accomplish that because I think Austin has invested in the cachet of the city and what they've been able to accomplish so far.
Michael Scharf: we talked about the live work play. We've talked about the 10 minute city. I want to kind of get into one of the issues that you brought up before. When you talked about Gensler and how you are consciously bringing people together for specific activities. I'm curious because clearly architecture drives abilities in terms of what you can do and where with a lot of companies that are.
Never going to go back. As you said to the nine to five in the office, closed door, kind of our cubicle kind of life. What are the innovations that you see coming in terms of. Facilitating the temporary scrums, if you will, versus living at home.
Todd Runkle: Yeah. So I think to that point is we do a lot of corporate interior spaces.
And again, I think the office will transform into more of a hospitality like experience. So again, it's. Not unlike the conference room we're sitting in today. I think it's flexible enough where it could be a traditional conference room like we're sitting in, or it could become a living room with technology where you could be sitting in here collaborating face to face, but still digitally or virtually having your partners on the screen, working from wherever they are.
So I, I think the office, the traditional office will transform differently where I don't think a sea of workstation will ever be the future. I, and we're looking at that on a, on a project we're doing for of Oliver Car and Manifold here in town, which is a large office building, but I think what they. What they aspire it to be is a transformational office space.
Where again, it's this not intended to be a typical office. It's more about the amenities that could be provided within that building. That that would be different for the office experiences as companies move in.
Michael Scharf: But I'm, I'm curious in terms of, if I've got a company with a hundred people and on any given day, half are in the office.
But every once in a while, I need to get everybody in. Right. Is it going to be in my space or are we gonna see more things like a weWork?
Todd Runkle: Yeah. Great, great point. And again, back to this Block 16 project, every, I mean the building is 800 and thousand plus square feet. Every eight floors there's amenity level that the building and, or the tenant, depending on how they negotiate, the deal could provide these amenity type spaces.
And so again, if a tenant's, you know, if the tenant's gonna occupy the whole building, I assume that would be the tenant's responsibility to build those spaces. But I think one of the components, the developer's considering is if we provide these amenities spaces, They could be you know, recording studios and they could be restaurants and cafes and all these kind of, you know, unique type spaces programmed differently would attract, would attract tenants.
And I, and I think they're onto something and they did a project in Washington DC called signal house, which is truly cutting edge. TikTok I believe just leased it. And it's just, it just provides all these kind of unique amenities that the tenant doesn't have to provide. and I, I do think that's the future of office buildings.
And again, I think that will get people to come back to the office.
Michael Scharf: That's great.
So wrapping this up, we've talked about mobility. We've talked about transportation, we've talked about amenities and bringing people back into the central living central business district. What are the other challenges that Austin faces?
Todd Runkle: Yeah, I think to me, I think what what I'm passionate about for Austin is, you know, the vision. The city has developed, has delivered to date has been outstanding. I think the downtown is aspirational for most cities. I mean, people live downtown in Austin and I think that's what creates a great night life during the evenings during the day.
Summers are a little challenging cuz the weather, but I, I, I, so I think that's been a huge success. I, I personally believe. Park spaces and public spaces are one of the key drivers to great cities. And I do, I, I do think Waterloo park and what they're doing to connect the park is, is hugely transformational.
I hope that the leaders in the country, in the country and the city moving forward can continue to focus and invest on public spaces. I mean, if you go to a number of cities, you know, I was in Savannah recently. I was in Charleston recently. I was, you know, you go to San Francisco and again, I think. A lot of the public parks and public spaces are really what makes great cities.
And again, I think we've got, we've got the cache, we've got, you know, the live music. We've got so many great things. I mean, it's aesthetically beautiful in the city, but I think if we can just take a step back and say, can we give back to public spaces? Cause that's, what's gonna continue to drive people to come down to the central business district.
And again, I think it's the, city's done a great job. I think the lake downtown I think that's one of the parts that we could all invest in to really make the. Thrive.
Michael Scharf: Absolutely agree. Thank you so much for hosting us this morning, Todd, Runkel we always ask the last question. What's next Austin.
Todd Runkle: I think next Austin has continued great things and to continue talking about the city and what's gonna make it great.
So thank you.
Michael Scharf: Thank you so much.
Jason Scharf: So what's next Austin. We're glad you've joined us on this journey. Please subscribe with your favorite podcast catcher. Leave us a review and let your colleagues know about us. This will help us grow the podcast and continue bringing you unique interviews and insights.
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