Loud music reverberated from speakers. The line at the sponsored free bar spilled out onto the sidewalk. The 2010 AIA/LA Design Award boards were perfectly leveled along the crisp white walls. With all the great design on display, the music, the mingling, the clinking of plastic glasses, one might think architecture was simply business as usual.
But this crowd had gathered to listen to a panel on where things stand with the economy as it relates to the architecture industry. The event was sponsored by Form Magazine and coincided with the release of their October Money Issue. One person I spoke with wondered if the panel would show their cards.
More after the break.
It takes courage to sit in front of an audience and talk about the economy. Especially when the audience is comprised mostly of architects, many of whom have been experiencing the worst of the recession for the last two plus years. People were there looking not only for answers but solutions.
The panel was dominated by the architectural point of view. Andy Cohen, CEO of Gensler talked about their global strategy. He noted that when the recession hit they thought they were insulated because they were diversified in so many different markets. The problem has been that all the markets tanked. Gensler’s response to the current recession may have been similar to how they adapted to the dot com bust: go where the projects are. For the moment, this translates into developing more international work and spreading it around different offices. The one area that Mr. Cohen said has remained relatively stable is Healthcare. That was a useful insight.
Tom Hinerfeld, President of Hinerfeld Ward Construction, spoke of holding on until the storm passes. As he put it, his company deals in figures with far fewer zeroes behind them than Gensler. When Moderator Ann Gray asked where the money was coming from, he replied, from non-conventional sources and people who have not been “punished.” The “hard money” is basically coming from people who have been insulated from the recession. The short answer: super wealthy clients. Not exactly earth-shattering, and not helpful for those unemployed or struggling people looking for solutions.
If this all sounds familiar, that would be because these approaches have been the mantra of the architecture profession since recessions have been around. If one were to look back and analyze the industry’s response to recessions since the Great Depression it becomes apparent that basic strategies have not changed much. Which is why the industry is much more susceptible to them than other sectors.
Undoubtedly, digitization and the internet have enabled firms to be more agile and responsive to fluctuations in demand. The ability to mobilize a firm quickly and from long distances makes it easier to reach out. While this model liberates them from being geographically fixed, the tactic is still the same: go where the work is. But there has to be available work in the first place.
Carl Muhlstein of Cushman and Wakefield had a businessman’s approach. He noted that 20% of office space on the Westside is vacant; one out of every five floors in Los Angeles is empty. He did, however, offer some useful strategies. For one, architects need to become more politically engaged and “remind elected officials who their real constituents are”— the citizens who live and work in the city. Architects should involve themselves more to prevent narrow, short-term, “barbaric land-use” approaches to planning. To do all this, however, architects must be leaders in their own cities, not just global flyers or internet practitioners. For architects, the Greenpeace slogan, “Think globally, act locally” could be changed to “Act globally and locally.”
One audience member who was still employed at a large corporate firm said he was planning on getting out of architecture and into real estate. He wanted to talk to Mr. Muhlstein. Lots of people wanted to talk to Mr. Muhlstein. Because he understood the economy within a larger context and how to strategize for it. Like Mr. Muhlstein, architects should be aware of all the forces shaping the economy. They should understand other business sectors, not just their own, not just as indicators of the economy, but to help identify client sectors they may be losing or gaining.
All in all, not a lot of new information was shared. The audience came for solutions and some were disappointed that they did not get any. “Haven’t we heard all this before,” one woman asked? And the big elephants in the room, Layoffs and Unemployment, were not spoken of.
At least the bar was free and groups of architects, employed and unemployed alike, could get together and talk more candidly. In fact, the personal conversations were more to the point than the panel.
For future talks, it would be interesting to have a more diverse group willing to talk openly. How about inviting architects practicing in non-traditional ways, city planning officials, developers, bankers, and wealthy and institutional clients? How about getting some economists and MBA’s together to tackle the problem from different points of view? What would they say? If we are going to hear what we already know, we should simply clink plastic glasses and admire the great designs on the wall like we normally do.
