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The Millionacres Hour: Interview with Victor Hoskins, Fairfax County Economic Development Authority

In this interview, Victor Hoskins of the Fairfax County Economic Development Authority discusses Amazon's HQ2 projects, his plans for Northern Virginia, and the current economic climate. This program ran on Motley Fool Live, January 26, 2021.

Transcript

Deidre Woollard: Welcome, Fools. As I mentioned this hour, for the first half hour we're going to talk to Fairfax County Economic Development Authority, President and CEO Victor Hoskins.

Victor Hoskins: Pleasure to be here.

Deidre Woollard: Great. Victor, I just want to read a little bit of your bio, because I think it's pretty impressive. During your career you've created nearly 375,000 jobs. You were previously the Director of Economic Development for Arlington County and you helped bring Amazon's HQ to Northern Virginia, he was also the Deputy Mayor of Planning and Economic Development for Washington DC and also helped bring together major sites in DC being the renovation of the work area. Victor, we just went through an inauguration, a transfer of power, obviously that impacts Washington DC. How does that also impact Northern Virginia in general?

Victor Hoskins: It's interesting. Well, first of all, thank you for having me today. Real estate, it's something that I've been around so much in my career that I absolutely love the subject no matter what direction, and this is in particularly unique moment. When there's a transfer of power in this region, strangely enough, before Clinton used to have a departure of an entire entourage and an influx of a new group. But what has happened since Clinton is you have a couple of people that actually come and stay, and then you have another group of people come in, so there's usually a real warm heated market. This year it was particularly enhanced, and I'm talking residential, it has been enhanced by COVID, because suburban outlying areas has been a little bit more attractive than urban inner-ring areas, so really Northern Virginia has benefited greatly. As a matter of fact, in August and in September, sales were up 37 percent so its been a red-hot market.

Deidre Woollard: Yeah. We definitely noticed that the residential market all across the country has just been really incredibly heated, and it looks like 2021 is going to continue that trend.

Victor Hoskins: But now I can contrast that with the commercial market, which has not been so good. As a matter of fact, it's interesting 2020 calendar for us was a pretty amazing year, but it was only because of the pipeline that came out of 2019. We had transactions like on the Microsoft deal which was over 400,000 square feet and then they added another 45,000 square feet so it ended up to like 450,000 square feet of research and development. That kind of deal along with the re-signing of Volkswagen, which was almost a 200,000 square foot deal and they signed a 20-year lease. They did all of this during COVID, and that was the larger companies. But on the side of the smaller companies, 50,000 square feet and below, it really has been a mixed bag. Like a lot of companies have given back space with some of these big based back on the market, so it's really been a tale of two markets. The residential market doing extraordinarily well, commercial market, not so much.

Deidre Woollard: Well, let's talk about that, because I think it's really interesting. You mentioned those two huge deals that were already in progress. Do you see that pipeline picking up anytime soon or do you think it's still going to take a long time as we roll out vaccines and things like that for the economy to return to normal a little bit?

Victor Hoskins: We look at data from our region, we look at data from the nation, and then we look at global data to track on what we expect. We are one of the most moderately impacted markets in the country. Our commercial side is down about 34-37 percent depending on how you count it and that's in Northern Virginia, and actually the Greater DC region where you have markets like San Francisco that are down 71 percent, and that's in net absorption. I'm talking net absorption, I'm not talking about the markets collapsing, I'm just saying it's not growing. This is the non-growth of the market. That is really something that we believe is going to take a couple of years to shake out. We've spoken to some really forward-thinking economists from universities and from the real estate sector, and they all are basically saying, look, 2020 pipeline don't be surprised is going to be down. That means that if it's down then that's 2021 is going to be soft. So you lose the pipeline in 2020 so you don't have those deals in 2021, so all of those deals roll to 2022 and you get the impact of the additional deals that are coming on the market in 2022. This year, 2021 is not going to be such a great year. During the first half, we're expecting it to pick up momentum around September as you hit that corner into fall and then push toward December, and then we expect a pretty robust market 2nd quarter next year, and going throughout that whole year. A lot of the economists and forecasters from like UCLA's Anderson Business School and people like Enrico Moretti already, they're very clear that this is the direction of the market and it's just going to be an adjustment. They're looking at it in three phases. The 1st phase really started in March with COVID to this April, this spring as vaccinations go out, then there's going to be about a year and a half of vaccination adjustment, and then about two years moving toward normalcy. We'll get back to somewhat normal, and I can get into more details on that, but that's what they are seeing right now.

Matthew Argersinger: Victor, thanks for joining us again. I want to go down a political rabbit hole, where we have different registration. I'm wondering in your conversations with developers or business people, and specifically about Northern Virginia and the DC market, is there any shift in sentiment or do you think all of the momentum that was in place last year, whatever that momentum might have been, is that just continuing or have you seen any shifts based on the change in the administration?

Victor Hoskins: I don't think there's really been a shift in the momentum. As a matter of fact, COVID is the thing that's dominating the momentum. When I say momentum, I'm speaking of actual transactions because we have to hit so many square feet a year. We have to do about two million square feet a year and about 9,000 jobs, that's our floor. Last year we did 2.4 million in square footage and we did about 11 million jobs, so we were up 18, 15 percent. We did really well last year, 20 percent on the square footage, about 16 percent on the job side. This year, we don't expect that. Actually, we expect to be down. That movement has less to do with politics and has more to do with what's going on with COVID. COVID is keeping us from out of the offices, it's changing our attitude of how we want to approach the offices. It's the barrier. It's the thing that's in the way of momentum really busting loose. When I heard the new president say 100 million vaccines in 100 days, that target is extraordinarily encouraging to the market. Now they're talking maybe even more, maybe 150 and I'm hoping I'm one of those vaccinated people, because we look outside of our market as well as in our market for deals. Retention is 66 percent of our business, but there's another 33 percent and a 1/3 that we go in and we call it hunting. That's the Amazon deal, the Lidl deal, the headquarters deals. But most of our deals are really local. But that sentiment is really not related to politics, it's actually related to this pathogen that is out there, this COVID-19. Once that moves out of the way, you're going to see a tremendous release in pent-up demand. I have my people looking at July 1 on as really the gun going off and saying, go chase the business, and I'm not the only one that's thinking that way. We're triggering 2/3 of the people will be vaccinated by the middle of summer in the summer, and that's a perfect time for my people to get out there and travel.

Deidre Woollard: Interesting. I want to ask you a little bit too about how you supported some of the smaller businesses during the pandemic, because I know that was something that was very important to your organization.

Victor Hoskins: Absolutely. One of the great things is that we provide a lot of technical assistance and because of COVID, we provided it online. This year, actually on the first round of PPP, about 2.1 billion went to businesses in Fairfax County. That was really a welcome relief for our businesses. The key issue though is these businesses were usually a little bit larger, 100-plus employees. The ones that were suffering the most and really had a difficult time even applying for PPP, even after we gave them technical assistance, even after we connected them with people at the SBA, even after we connected them with banks, were employers that had 50 employees or less. The County Board of Supervisors led by Chairman McKay, focused on a great program for the first time in the history of our county. Direct grant program to businesses that have 50 employees or less. We were able to help over 4,800 of these businesses working with the Department of Economic Initiatives led by Rebecca Moudry, she did a brilliant job. We reached 4,800 businesses, 72 percent of these businesses were women, minority, and better known businesses. That is really delivering what was needed in the place that it was needed. The grants range from 10,000-20,000, and it really help these companies adjust to this difficult time. In addition to that, we provided them with technical assistance and how to pursue these markets virtually. We work with Facebook and Snapchat and other platforms to provide technical assistance for free to these companies on how they can use these platforms to either run their businesses or enhance their businesses. A lot of them work on electronic pay systems so a lot of them made that conversion, and also we keep them extraordinarily informed about the public health requirements on distancing, on number of people in restaurants, and all the things that are the block and tackle in the business every day.

Deidre Woollard: Are you looking forward, as we probably just had one stimulus package, do you feel like we're going to see another one and do you feel like that's going to have an impact on these businesses as well?

Victor Hoskins: I do believe that we're definitely going to have another stimulus package. We're not focusing on that right now. What we're focusing on is the second round that has already been approved. We have businesses right now that we're helping, that some have applied before and they are applying again because the circumstances at the end. Then there a number of businesses, up to a thousand businesses that had not even looked at PPP before because of the too onerous at the time, but they know that other people were able to get it, so now they're coming in. We're really focused on what's happening right now. Our hope is, and our believe is, that there will be a third package. We're hoping that that really focuses on the small businesses also.

Deidre Woollard: I wanted to talk a little bit also about work-from-home. Obviously that's a huge question. You mentioned the Microsoft deal. Are you feeling that large local employers are going to start expanding? You mentioned that July one thing, do you feel like we're going to see that return to the office, and then that need for more office space gradually increase again? Or do you feel like we're going to see more of the hybrid model that some people are talking about?

Victor Hoskins: [LAUGHTER] There's WFH, it really sounds like a wild word. Somebody had said that acronym to me, what are you talking about? The work-from-home [LAUGHTER] versus the RTO, the return to office. You have this WFH versus RTO.

Matt Argersinger: What side are you on Victor? What side are you on?

Victor Hoskins: [LAUGHTER] I believe that it's going to be hybrid. I actually I'm right at the middle on this is issue. I'm married to an architect, so I'm hearing about buildings and interiors all the time. It's something that I'm always listening to. But can they do surveys? There's a lot of research out there. But Matt, to answer your question, I am right at the middle, and let me tell you the why. A couple of reason. These are countervailing forces. There are groups of people, myself included, that would like more flexibility to avoid community traffic I'm the CEO [LAUGHTER]] of my organization, but I'm there early and I'm there late. If I just have more flexibility of coming a little late and even stay in later, I'd be fine with that because then I'd miss all the peak traffic. There are a group of people like that. They really want to be able to flex. There is this other group that's still raising kids. I'm an empty-nester, but they're still just raising kids. They need some flexibility. Pick up the kids from soccer, drop them off, pick them up from childcare. I remember juggling childcare pickups with my wife when we were in Los Angeles. I worked in Long Beach, she worked in West LA, and we lived in the Valley, guys, disaster. I think we've made it to be productive like this. We see it very clearly. We can be productive like this. Because we can be productive like this, it's going to really drive the middle of this, where we're going to see a larger group, I think a larger group is going to work from home all the time. We had 10 percent of our staff doing it, we'll probably will end up with about 20 percent. We've been surveying our staff, talking to them, some of them have even made official requests. We're expecting then about 20 percent. That's 100 percent rise in the number of people that have decided to work from home. By the way, that's good because in my offices, I didn't want to have to lease more office space because they're not going to come into the office. I can now give my employees more office space. I had started doubling up people in offices like everyone else. We were working towards the open plan. Everybody in the open space, no one wants that right now. I'm sorry, not even Plexiglas shields do I want that. I do not want that. You're getting this countervailing need to give each employee more space. Then I think that there is that other group that is going to go, I don't want to come in on Mondays and Fridays, but Tuesday, Wednesday, Thursday, I'd like to do 10 hours, and then I'd make up the rest until it work. I think we're going to run ultimately to hybrid model, but I think net-net on the space side is going to end up where it is right now. But in the interim between now and then, I do believe that development permits will probably slowdown. I do believe that developers are going to start doing this risk analysis of, okay, if I already have something under construction, I'm going to finish it in full. But I don't know about starting something new unless of course, your JBG Smith, and you've got a big giant customer. [LAUGHTER]

Matt Argersinger: I appreciate that, Victor. I think that's the big concern is how big is the work-from-home trend. But I think you're right on net-net basis, we might be using the same amount of space, it's just that there might be more square footage per employee. I think a lot of commercial, all sounds, that's good news. Because there are not going to be a loss of a lot of space at least. I'm wondering if we could shift really quickly the housing. I know it's probably not your the number 1 thing that you're concerned about, but I know in Northern Virginia, certainly in DC, the need for affordable housing and workforce housing is, the demand is so high, and the supply and inventory is always so low. It's really hard to incentivize developers to build affordable housing just because it's not as profitable. What's your take on that in your market, and maybe also in the broader country? Like how do we solve this challenge of building more affordable housing?

Victor Hoskins: I'm glad you asked that question, because Deidre was asking a question about the residential office market, how it's changed. I are really focused on home buyers. This question really deals with renters in affordable buyers, affordable workforce housing, affordable housing and affordable buyers, which means a lower cost products. Ultimately their solution is really providing supply. It's just that simple. I know I'm making it sound simple. One of my previous careers was I was Secretary of Housing for the State of Maryland, so I ran all the housing programs with the state of Maryland, and I also ran the Mid-Atlantic region for Fannie Mae after that. I'm very familiar with scaling development and scaling the financing of development. If you can't scale the permitting and the financing of development, you're not going to get the products. Let me just tell you places that get that done very well, Texas. Texas gets it done well all over Texas. You don't hear people screaming about affordable housing in Texas. I think that there are some markets in North Carolina, they do it pretty well. People don't complain about housing in North Carolina. By the way, Chicago has a huge inventory of affordable housing. Huge on the south side, it's one of the largest affordable markets in the country. It's not that it can't exist, is just that you have to create the environment for it to exist in. I think that we have not done that. I think we should just say Metro line, Metro station, given all the density they want, all that they can take. By the way, give that free to the developers, so that they have the, excuse me, I need to use this phrase. But when you deliver a unit, it's like delivering a lot. If you can take some of the real estate costs out of that lock, you have reduced the cost of that unit and you make it affordable. That's the kind of exchange that you need, give them density so they make affordable units. There is this 80/20 deals, where's 80 percent market rate, 20 percent workforce and affordable. That's a very conventional, and you get four percent tax credits for that. But that doesn't get down to a lot of the employees that makes $60 thousand, 50 thousand a year when they entry level, and they need a place to live too. It's not our expertise, but what we have been doing is we've been working with our housing authority and our housing community development department to attract investors to this developed market that love to do affordable housing. We brought five different developers to this market, specifically interested in doing affordable housing. That's how we contribute to it, but it's not what we do as you've mentioned that.

Deidre Woollard: Do you feel like there needs to be more incentives or does there need to be zoning changes? What are the things you think are going to really encourage developers to build that kind of housing?

Victor Hoskins: I think it varies by jurisdiction. I think there's some jurisdiction their land prices is so low that providing any incentive towards the land is not going to be helpful. However, in the District of Columbia, you provide some incentive towards the land. If you're able to take some city land, lease it to a developer for night for a dollar a year, for 99 years, you've eliminated the real estate costs, you've made the financer happy. Boom you've changed the return on investment for that, and now you provide affordable housing. It depends on the market. Now on the question of the density and the zoning, I think that that can be done in almost every market. I think that's something that you can encourage in every market. In Minneapolis, a lot of people use Minneapolis as an example where they just said, no more single family development in the city. That's profound. That is the powerful, powerful motivator for people to do multifamily development. But the question is, are they working on the other side of that? Are they going, okay, so that was the restriction so what is the promotion for the increased density? I got to be honest with you. I love working in housing while I was in housing, but it has to be one of the most difficult careers to be from the regulatory side and from the developer side. But as you can see, there's something necessary for us to really tackle, not just as a one jurisdiction, but really as a region. That's what we're trying to do in the DC region. We're trying to work as a region with all the jurisdictions around the District of Columbia.

Deidre Woollard: Interesting. I agree with you about Minneapolis. I've been watching that one too. I think it's going to take some time. We haven't really seen what that's going to be, partly because COVID came along and stopped that as developers were starting to build their plans there. I wanted to switch a little bit and talk about Amazon HQ2 because I'm sure you get tons of questions about that. I'm located in Alexandria, so I've seen some of the construction going on. Wondering if the pandemic has changed any of the plans, and what the progress is right now.

Victor Hoskins: Before I say anything else, I always say this, Alexandria is heaven. You're in the greatest community. I've gone down in Motley Fool headquarters down in Alexandria, is one of the greatest community in the country, so you're in an incredible place, and you're near HQ too. What more [LAUGHTER] can we ask for? I have friends that live there, they're so happy. Today HQ2 has come because their whole value has gone up. One guy said, "You've just put my kids through college." [LAUGHTER] It's a positive thing, but let's just talk about the office market of HQ2 first. They initially announced 2.5 million square feet, a half million square feet is already renovated and made available to Amazon. They've been using that space on a limited basis. There were existing buildings, some were light renovations and some were heavier renovations, but they are already using those buildings. They're not fully occupied, they're sparsely occupied right now because they have a work-from-home policy to basically work from home until the summer, so the WFH is in operation. But the development scenarios there, I think honestly are going to be greater, and let me tell you why. They bought a hotel, they're going to tear that hotel down, they now have another development site. Companies like Amazon do not make decisions like that serendipitously, they're thinking long-term. They are going to build an incredible presence in this region, not just in Arlington but also throughout the region. But in Arlington in particular, their first building is under construction right now, it's moving along, I haven't heard of any hiccups. Last month we had three Amazon executives come and speak to my commission, we have a guest speaker rotation in my commission every month. In the month of December we had three of them come in, one spoke specifically about HQ2, up and down, what's going on, how it's been running. The other spoke specifically about the logistics work in the Last Mile work of Amazon, which I hadn't even thought about. It's all over the region, they just laid out the plan, it's really, really exciting to see. The third was talking about the new retail of Amazon in terms of Amazon stores and how they plan on rolling those out. Stores like the Amazon Go, you've probably heard about this one, you walk in, you have your app running, it knows you're in the store. You pick up items and just as soon as you pick up the item, it registers it, and then on your way out it does a little calculation on what you bought. If you put things back on there, just as soon as you put it back, it comes off. This is really experiment in more rapid and free and flowing shopping experiences. One of the things I love about Amazon and having worked with them, they really focus on the customer experience. For me, today if you can really give a customer a delightful experience, a Ritz-Carlton experience, even if its just a convenience, I go in and I grab my squishy and my pre-prepared meals, my pre-prepared salad, I run out, that's what we're all looking for these days, we're looking for a more fluid way of living and having our lives. But the Amazon HQ2 is rolling along and I think it's going to be bigger. They said 25,000-37,500 new hires, they are on track, they hired on exactly what they said, actually more than what they had said they were going to hire the first year which I think was 1,500, they did that. They are on track, they have not come off yet. I know that they are very eager to not just develop in Arlington, but also in Fairfax. We're talking about projects, they just finished a big warehouse and distribution center in Fairfax County. Actually AWS, their sister company just purchased a big site, a 57-acre site, which may relate to datacenters, but we will see that when it comes. But the bottom line is that Amazon is healthy, it's actually making the entire region healthier.

Deidre Woollard: Let's talk a little bit about datacenters because I'm like you, I used to live in Los Angeles and I moved to Northern Virginia, so I'm learning all these things about it. I didn't know that Northern Virginia is the biggest datacenter market in the world.

Victor Hoskins: You didn't know that? [LAUGHTER]

Deidre Woollard: I found that really, really fascinating. You mentioned AWS, I know some of the other Iron Mountain's here, QTS Data Centers, a bunch of others. Why is Northern Virginia the datacenter capital?

Victor Hoskins: It's amazing, there are 179 datacenters right now physically in Northern Virginia, which makes it the center the world of course. About 30 of those are in Fairfax County, which is about 16 percent. The majority of them are in Loudoun County, and then there's about another 16-20 percent in Prince William County. The reason why, to get right to your question is this; ARPANET was the precursor of the Internet. ARPANET was developed in Arlington County by the Defense Department. ARPANET was what they call a resilient communication system, just in case our satellites got knocked out or other communications above gray got knocked out, you had this underground network that was redundant and actually covert. Well, when it went public, guess what? They had already built all the infrastructure here, so all the talent was here, the infrastructure here, they continued to build. I don't know if you remember the telecom boom, the telecom boom [LAUGHTER] put more pipes in the ground and it was to get data to move over phones faster. All of that contributed to making this the center of all Internet traffic of the world. I understand that roughly 70 percent of all the Internet traffic of the world flows through here. Trust me, we're all very happy that it does [LAUGHTER] because look at this connection right now. You can't get this connection in Kokomo, Indiana, it just doesn't happen. [LAUGHTER] We're very fortunate to be able to take [LAUGHTER] advantage of that resilience.

Matt Argersinger: I'll just mentioned I used to live in DC, I lived on Middleburg, Virginia now. When I drive out here from DC, I feel like I am driving through Silicon Valley, through part of it. Because you're just down this quarter and there are just these buildings and tech companies and datacenters, I presume just hugging the highways. It just feels like one is going up every day, it's tremendous.

Victor Hoskins: Of course the Cloud computing part of it, which the datacenters are now the host of, really was accelerated by the COVID. COVID has really pushed us to levels, I went from basically no Wi-Fi at home to one gig, [LAUGHTER] I never thought I'd use a gigasecond. What is that? [LAUGHTER] We don't need to move that much data. Or when you're doing this and then your wife is doing it, you're streaming, everybody's streaming, and you have your phones on and they are running, and we have all of this equipment running, it really is exploded, the industry. There are plans out there for, I think another 30 or 40 d-centers, so it's not going to stop for a while.

Deidre Woollard: Well, I also wanted to ask you about education because I know that one of the reasons that Amazon was interested in HQ2 was Virginia tech's digital innovation campus. How does education play into some of your plans?

Victor Hoskins: Education is so critical Deidre, the need for talent is extraordinary. I'm not going to get too deep into it, but it's extraordinary. Not just for Amazon but for all these tech companies, whether they're in Cloud computing or they're in data analytics, data science, robotics or drone, autonomous vehicles, it doesn't matter, they're all looking for talent. We have to provide that talent in a consistent way, and that means building a pipeline. We will double the number of technical engineers that will be coming out of the Virginia schools in the next 10-12 years. Why? Because we want these companies to be here, we want them to stay here. We also have the wonderful University of Maryland, College Park, across the Plus DC, plus the river and then to DC over in Prince George's County that graduates, a ton of engineers. We're trying to be more closely connected with them. As a matter of fact, they have put a campus on this side of the river, not too far from HQ2. So you're seeing this converging an understanding that without the brains, you don't have the innovation. Without the brains you don't have the growth. So we have to really make sure that the talent comes in. We have an entire talent initiative. This is an example, one example. On the 28th, we have 27 cybersecurity companies ranging from latest to AWS, all focused on cybersecurity and they have 4,000 open positions. We have over a thousand people registered for this. We provided this service free to the employees, the potential employees, and free to the companies. The reason why is it we want the companies to hire and we want people to be hired. By the way, we don't just market that within this region. We are marketing to New York, to Boston, Cambridge, to Silicon Valley, and to Austin, Texas, and LA. These are the markets that we're going after and we went from 300 hits a month on our website to 20,000 a month. We have a plan in the next six months to get to 50,000 a month. We really want to jam on this because that will become our communication channel for talent, whether it's retention of talent or retraining of talent. We do these virtual career fairs also for retraining and retooling. Deidre, you're probably not a programmer. I saw your background. Incredible writer, gifted. Now, coding is not very different from writing. You can be trained [LAUGHTER] as a coder and they know that. But if you wanted to be one, where would you go? We're creating places where you can go. You can go to our website right now, workinnorthernvirginia.com and you can find all those places where you could be retrained if that's what you're interest in. So we're really trying to provide the tools for the existing workforce, for the workforce that is outside of your coming here, and the workforce that's educated here to stay here.

Matt Argersinger: Deidre, it's not too late for either of us. [LAUGHTER] We can do it. Give us this fighting gig that we can do it. [LAUGHTER] We're developers. Let's do it.

Deidre Woollard: Whole new world just opened up for me.

Victor Hoskins: It's not too late.

Matt Argersinger: I know. [LAUGHTER]

Deidre Woollard: I know we're keeping you a little past time. But I wanted to just talk a little bit about the future here. Obviously you mentioned we're going through this transition year. Nobody is expecting 2021 to be a massive blockbuster. I think everyone's more excited about 2022, 2023. What are you seeing? What are you looking forward to even five years from now? What's the future look like?

Victor Hoskins: I've been asked that question before and it is one of those questions that I do ponder. I try to have a Northstar whenever I'm working anywhere. I had a Northstar for Arlington County and even want to work in DC. I had a Northstar for DC and I wanted to create a higher bond rating for them. Get them the AAA bond rating and we did that. I wanted to get them to surplus budgets, and we did that. It went on for top 5, 6 years after I left. I wanted to bring prosperity back to Arlington. They had lost 34,000 employees. I did that. So let me just tell you what I want now, it's not just for Fairfax, it's actually for the entire region. What I would like for this entire region, I wanted to be the center of innovation of the world. I want to compete with Shenzhen. I want to compete with Beijing. I want to compete with Bangalore, with Seoul, with Tokyo, with Taiwan. Look, I've been to those places. They got game. They got game. [LAUGHTER] These guys, they are not playing. They are ready to eat our lunch. If we're not going to eat it, they're going to eat it for us. We really need to think regionally. We really need to think it's a unified region. Think about this, six million people in this region, three million residents, three million in the workforce rather. So you have six million people living here, three million in the workforce. You have 64 educational institutions cranking out roughly a 100,000 degree candidates every year. What's wrong with that? We have a half a trillion plus economy. We are just ahead of Silicon Valley in our economy, the size of our economy. We're number 5. It's unbelievable what this region is, we don't think that way. We think Arlington, we think DC, we think Fairfax. Stop it. Look, if this region is successful, Fairfax will get its piece. If this region is successful, DC will get its piece. We have to do this as a region. So my vision is that we become the Innovation Center of the world and I think we can do that and that doesn't mean anything. But when you think of innovation globally, you think that coming here could blow your business. You think that coming here to design your product, you think of coming here to transform your company. I want the people to come in and go, I can transform our company if I hit that market, if I get to that market. I was one of those kids that there wasn't a real high probability that I would go to college. Well, I just didn't have the social circumstances probably. We grew up with very minimal means and no one had been to college in my family before my generation. But for me, I've always been able to set goals related to things that haven't been achieved before. That's why I do it, because it's worked before. Why shouldn't it work now? I do believe that this region right now maybe not so united, but it's more united now than it was pre-COVID. We got the Northern Virginia alliance of 10 jurisdictions in Northern Virginia. We have the Maryland Alliance, which is six jurisdictions in Maryland. We have DC and we're all now talking. All 17 jurisdictions are talking, how can we work together? How can we provide prosperity for our people? How can have equitable prosperity for our people? How do we do that? That is what we're talking about now. So we're developing a strategy together. So five-years from now my vision is have strategies in place. We're up there boxing above our weight as they say.

Deidre Woollard: Interesting. So do you see your competition as Silicon Valley? Or do you see it's us versus China?

Victor Hoskins: Well, it's interesting. That's a great question on a couple of levels. One, culturally China is very different from us. I started traveling to China in 1995 and open an office for the state of Maryland. It was the first state office in China, and then later on it I opened an office for the District of Columbia in 2012. I've been to China many times. The culture is so different from our culture. I don't think it's an apples-to-apples comparison. I've been to Japan repeatedly. Again, I don't think it's apples-to-apples. I've been to Germany, I've been to France, I've to England so many times. You cannot just compare apples-to-apples. I don't think it's versus anybody. This is what I do know. I do know that there are companies that want to be there, that I would like to be here. They are companies that are here, that are thinking about going there. I want the companies that are here to be convinced to stay here unless there is market opportunity for them there. I want the companies that are there to come here if there's market opportunity for them to be here. What I want to be as a place in an environment where a company can prosper no matter what it's looking for. If we can do that together. I don't really look at any particular geography as my competition. But people say it because it comes up. I would like to say this okay. We have one company looking for an R&D location right now, and they're looking at five different markets. The usual suspects, us, Silicon Valley, Austin, Texas, Boston, Cambridge, North Carolina, Triangle. All right. Is that our competition? Yeah. But that particular company, yes. But look at what Amazon did. Amazon said we'll be anywhere. They looked at 238 jurisdictions. That's how I think the choices can be made by these companies. Broader choices, that they can be almost anywhere now. So how do I make my place most attractive as I can? I will give them my comparative advantage. My comparative advantages. Whether that's lower-cost housing, or less expensive education, shorter commute, nice urban environment. I got to tell you something, I love DC because it has so many museums that are free. [LAUGHTER].

Victor Hoskins: Yeah. It's a great thing. That's a comparative advantage. You don't have 22 Smithsonian museums in Chicago, New York, and San Francisco, Boston, Cambridge, North Carolina, Chapel Hill. We got Austin, Texas. We just don't have it. So there is an advantage here that you don't have anywhere else. Look at this, I used to tell my boss this when I was in DC, I worked for the Mayor. I used to say this, "You know, we have something that no one else has in the world." He said, "What's that?" I said "186 countries that are actually here." You can reach 186 countries in a Uber. You can't do that any place else in the world. There's no place on the planet you can do that. That's how I look at competition. Not me versus them, but me creating the greatest advantage for the companies that I would like to come to me on a comparative basis.

Mart Argersinger: It's still great because this is about me thinking about my finance courses back in University, but there was the whole competitive advantage versus comparative advantage. Competitive advantage, Northern Virginia might not be able to compete on price or wages or things like that. But there are comparative things, there are things that are unique to the region that, and you mentioned a bunch of them, that other jurisdictions don't have. The best we can do is leverage those for the companies and so they know if they have a presence here, even though it's not their full presence, but they have a presence here, at least they can take advantage of those things they can't get anywhere else. It's such a great point. It's hard to have a conversation with you Victor and not thinking about the other jurisdictions that lost out on HQ2. Of course we can think of one prominent one, I won't mention it. But their approach to welcoming a company like that versus your approach and others approaches in Northern Virginia, and it's such a contrast. I'm going to say I am so grateful to leave Virginia and be a part of a state in a business environment that favors those kinds of things, and sees the bigger picture, and the long-term picture. Step-up soapbox, but it's appreciating.

Victor Hoskins: No. Really both Deidre and Matt, both you guys are in spectacular communities that really provide incredible value for the people that live there. I think of educational system at Fairfax County, and Alexandria, and Arlington is amazing. I wish I could've gone to high school in those in those jurisdictions. I'd probably would've done more. I mean, it really is amazing. So to me, that is the beauty of the work that you have done on the private side, and taxes that you pay, and what we try to do on the public side to support that expansion.

Deidre Woollard: I wanted to ask you also. We write for Millionacres, which Motley Fool's real estate investing website. Do you have any advisor insights for small-time real estate investors who might be interested in Fairfax County and in Northern Virginia in general.

Victor Hoskins: Yeah. I'm one of those people that always go to where the people aren't. There's a book called Relation Strategy, I don't know if any of you have read that book. But it's all about pursuing blue ocean away from the red ocean while the sharks start attacking one another. You basically go after where no one is. In. The best advice I can give is look at the markets that are not favored. Those are the real opportunities. Yes, they're harder to do, but that's where the return is, that return in markets where there is opportunity for making things better. I remember my first real estate investment. I was a young professional. I bought a house, I renovated with two of my friends. I had it as a rental property for a couple of years. Then when I got married, my wife said, "Sell it. [LAUGHTER] Take the equity, let's pay off some bills, let's start all over again." But the lesson was, going to a difficult market was where the biggest opportunity was, we got a 50 percent upside in two years. That was because it was a very difficult market. Think of the markets that you're in right now. That's where the opportunities are. They aren't in Tysons. That one's gone. That's not an opportunity, that was already over. But on the other side of the highway, Richmond Highway. They might have it over there. Richmond Highway Corridor. Another one. I mean, there places all over the county actually designated them as economic development incentive zones. There are actually a map that shows those locations. That's where all the opportunity is in the county right now. The county will even give you tax incentives to do work there. That that to me is like didn't give better than that.

Diedra Woollard: Yeah absolutely. I want to read a couple of comments that we got coming in. Big fan of the full Steve says, "What a good competitive Mot for the DNV area. Everything you mentioned was." We've also got a comment from Ashley who says, "Hello from your neighbor in Leesburg, Loudoun County. We have data centers popping up and new families moving into town all the time. Residential real estate in Loudoun is booming, and thank you for all of your amazing work and drive. I love that it's becoming a center for innovation and technology.".

Victor Hoskins: Great. That's fantastic. That's very kind of them. If you guys need to know this, I'm a huge fan of Motley Fool. I have followed much Motley Fool for years, I'm a subscriber. I got to tell you, I've learned so much, and earned so much [LAUGHTER] that the Motley Fool shared, and I appreciate it. Now, CNBC and Bloomberg are two other channels that I tune into. But Motley, the advice, invaluable. I appreciate you. Really, you guys do a great job.

Diedra Woollard: Thank you very much and thank you for your time today.

Victor Hoskins: My pleasure. I really enjoyed it. You guys have a fantastic day. Listen, stay safe. Get your vaccination, and get back to regular life. All right guys. Take care.

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