Is the New Normal New?


May 19, 2020

A lot of people are talking about the “New Normal.” It’s kind of a linguistic coping mechanism we use to help come to grips with the fact that our world has abruptly changed, and we have to change with it. (Don’t you hate when that happens?!)

Every aspect of society has been affected and we in the real estate industry are no exception. Fundamentally, the story of the virus is about contact, which means that it is related to place, and by definition, real estate is place.  Real estate is also, literally, the foundation on which every other brick in the economy is laid, and no sector of the industry is “immune” to the discussion: user, investor; office, retail, industrial, multifamily, residential sales & rentals, relief and forbearance… one way or another, both how we conduct business and values across the board are being affected. Each segment itself is a plethora of whitepapers, books and articles just waiting to be written.

For a moment let’s just take a beat. When listening to the daily barrage of data and conflicting information, accept that the future is unknowable and we are wise to be restrained when predicting it (as I write about in my recent blog, “Another Look at Risk vs Reward”). However, to the extent that we may see the past as prologue, the big picture view is encouraging, so it is important we try to take a step back and see forest for the trees.  And with that perfect segue…


This metaphor needs no interpretation: The Jack Pine tree, covering millions of acres of northern United States and Canada, has pinecones which hold their seeds fast for dozens of years. What opens them up is the heat of a forest fire, which melts the sap in the cone and allows the seeds drop and grow a new Jack Pine in the ashes of its progenitor.

It is through this lens that we can view and gain perspective into our current situation, from the “trees” which grew out of two “forest fires” in our past; one being 9/11, the other being the 1918 Pandemic.

The 911 Forest Fire: In a few ill-fated hours on the morning of September 11, 2001, the world changed. It was sudden, unfathomable and painful, touching people in every corner of the planet. We all remember where we were that day. For me it was Warsaw at the Marriott when the office called from New York – turn on the TV.  Then the calls came from friends and colleagues from around Europe expressing sympathy, solidarity and disbelief. Sitting in the hotel lobby, reporters were questioning our plans: were we going to continue with our developments?  Was I going to keep flying to Europe?  and so on.  We had just inked the lease for the first anchor for our first project, so I couldn’t imagine we wouldn’t move forward… but then again, it was only September 12th and I didn’t even know what I’d be doing on September 13th.

For a long time afterward, airlines, airports and the government had quite a needle to thread.  Getting on a plane was a protracted, inconvenient and chaotic mess as they tried to figure out protocols that would keep people safe while not discouraging them from flying.  This was the “New Normal” of air travel.

Regrowth: As you might guess, the following year air travel worldwide plummeted. You would also be guessing incorrectly.  In 2002 global air travel dipped less than 2% and by 2019, grew 262% to nearly 4.4 billion travelers.  In America, the epicenter of the disaster, it took the industry a little more time to recover to 2001 levels. After a few minor annual declines (-6.5%, -3.8%, -1.6%), airline ticket sales jumped by more than 15% in 2004, erasing the declines of the previous three years plus a 20% jump in sales. Moreover, excepting a short period of decline after the ‘08 financial crises, air travel in the U.S. has increased steadily, overall averaging nearly 10% annual growth.  The industry figured it out, despite the increased costs, security challenges and lingering memories of that tragic day in 2001.

The 1918 Forest Fire: 1918 saw a pandemic that was not only worldwide, it took place during a World War. The “war to end all wars” was a devastating, horrific, miserable slog; and yet, ten times more American soldiers were killed by the “Spanish Flu” than were killed fighting the enemy. They were among some 675,000 Americans who died from the virus, which also happened to cause respiratory failure. Estimates are that between 50 and 100 million people died worldwide, at a time when the world population was 75% smaller than it is today. These statistics stagger the imagination. The first flu vaccines were still 25 years away, so the virus and the war carved a chasm of destruction and both disappeared later that year.

Regrowth:  Just a couple of years after this global trauma ended, the “Roaring Twenties” began. (Now could be a good time to add F Scott Fitzgerald’s “The Great Gatsby” to your read-it-again list). It was one of the most prosperous and madcap periods in modern history, only to end in a market crash and economic depression unrelated to any pandemic or war. Well before that macabre historical episode began and ever since it ended, real estate developers and brokers have been busy building, selling and leasing downtown shops, retail centers, industrial parks, apartment buildings, ever taller skyscrapers and gigantic sports complexes.  People in those buildings have been getting on elevators and going to bustling restaurants with waiters who weren’t wearing face masks and riding home on crowded trains. All after a ruthless, medieval-like plague of biblical proportions became – I’ll submit consciously – all but forgotten. Until now.

Just a quick aside… isn’t it curious how they called everything “great” back then, even when they actually sucked?  The Great WarThe Great DepressionThe Great Gatsby… what’s up with that?


IM not so H.O., what is likely to be different in the pending New Normal will be vestiges of the virus, not a sea-change in our industry or way of life. It will include hard changes that we put in place while developing solutions to deal with immediate issues; ie germ-lights and air filters installed in office buildings are likely to become construction standards which be ubiquitous because their efficacy is obvious. On the other hand, I have little doubt that my Jesse James face mask, wiping doorknobs, elbow-bumping, directional aisles in supermarkets and other such conventions will linger by habit for a while and then fade away unceremoniously.

And thank you video conferencing, you’ve been a lifeline!  But as the-future-is-already-here as it has been, is just as so yesterday as it has already become… Will it become an unwelcome reminder of these unpleasant times? Temporarily, yes – long term, no; though it will remain a tool in my toolbox and I will use it to expand my business. Right now, I’m getting just a little zoomed & webinarred out. The sooner I have an up close and personal alternative to a video conference the better. To paraphrase the great scriptwriter Aaron Sorkin, “a video meeting is to meeting what reality TV is to reality.”  I look forward to actually meeting my clients and colleagues in their shop or office, not pixelated in their pajamas in their living room.

Collectively, just as the 20’s “roared in” after 1918, society and the economy will move boldly into the future. Individually, as the airlines on the brink of failure in 2002 figured out how to turn record profits, we’ll innovate and re-imagine our businesses. We’ll add the pluses and forget the minuses. We’ll surprise ourselves at our resilience, and for what are able to accomplish.


In fits and starts, without remembering when it began, we will be fist-bumping, hand shaking, elevator riding and hot-dog passing from the vendor to that loud guy sitting next to us at a ballgame, like… didn’t we always do that?  And whatever the New Normal is that comes tomorrow, it’ll be more like the Old Normal than we might imagine today.

It would be very Normal for you to completely disagree – please weigh in with your thoughts as well.