Today I’m adding a number of previously unposted columns from 2018 to 2020 to the Industry Publications/Commercial Property Executive page. The 12 quarterly columns for those years are:
Slowing Ahead - CPE March 2018
The Big Policy Shift: Gauging the Impact - CPE June 2018
A New Route for the Decade Ahead - CPE September 2018
Wanted: Healthy Skepticism - CPE December 2018
People, Get Ready for Extended Slowdown - CPE March 2019
Why You Should Be Watching the Yield Curve - CPE June 2019
How Trade Wars Impact Real Estate and the Economy - CPE September 2019
Get Ready for CRE’s New Normal - CPE December 2019
Investment Is About Expected Returns - CPE March 2020
COVID-19: The Economy Beyond the Tipping Point - CPE June 2020
Look Before You Leap – CPE September 2020
Rise to the Challenge – CPE December 2020
As you might imagine, the onset of the Coronavirus and its profound disruption of the economy, the real estate industry, and virtually every facet of society caused me to reflect on how change materializes, how it is anticipated or not anticipated, how we adapt (or not) to the alterations in our world, and what we can learn from the experience.
As the titles of my columns suggest, I was not a true believer in the narrative of a robust pre-COVID economy. First of all, I felt at the time that things were much more fragile than most observers recognized.
For me, the key clue was the Government shutdown during the winter of 2018-2019. That even those with good jobs in the public sector would be forced to food banks and sent scrambling to pay rent and mortgages by the loss of a couple of paychecks spoke volumes about how tenuous the economy’s strength was.
Beyond that was the peculiar situation of a fiscal stimulus, in the form of a large but unequally applied tax cut in the midst of a sustained economic expansion. This spoke to me of an attempt to “juice the numbers” by the president and his party’s congressional majority so they could run in 2020 on an apparently solid economic record. That “solidity” was much more apparent that real, though.
Looking past the short term, moreover, there was clearly an economic deceleration ahead for the 2020s, a condition identified in the Congressional Budget Office’s economic forecasts throughout the late 2010s. It was my judgment, expressed in these articles, that real estate (and business generally) needed to plan for that deceleration even while the good times were still rolling along.
None of this is to claim prescience on my part about the pandemic. But I can claim to have given prior thought to the preparations that can assist in coping with so-called “black swans.” (See the post on the website page Industry Publications/Real Estate Issues/”Black Swans: the Original Rara Avis.”) Although I can’t say I’ve fully thought this out, it does seem to me that there’s a lot of work to be done in developing an understanding of the differences between continuous change (which can be modeled economically) and discontinuous change (which is much more intractable, but arguably much more impactful).
In future posts I hope to explore the five forms of change I consider basic (cycles, trends, maturation, change of state, disruption). I have already discussed these in some detail in the book 24-Hour Cities: Real Investment Performance, Not Just Promises. But I think there is a real need to consider the interaction of these forms of change, which almost never appear in isolation.
To hint at what this means, let me propose the following provisional combinations:
Trends + Change of State = Emergence: the end of an era
Maturation + Change of State = Metamorphosis
Maturation + Disruption = Mutation
Change of State + Disruption = Metastasis
Clearly these are only hints, but I don’t see these as abstract ideas, but changes we actually experience in the world. And I find them well worth thinking about.
Won’t you join me?