A health crisis was not included in our portfolio of “unforeseen events”

Is the commercial real estate development sector prepared for the New Normal?

Alfonso Villacorta, CEO of SiGLA

At the end of the 17th century, the English discovered black swans in Australia. A shock, given that in Europe it was believed that all swans were white.
Three hundred years later, a Lebanese mathematician, Taileb, published a book with the title The Black Swan, in which he explains his theories. A black swan is an event a) highly improbable, b) of high impact and c) once it happens, it tends to be explained with logical reasoning.

Is the coronavirus a black swan? For most it seems so, but for others the event had nothing “highly improbable”. It seems that what is truly important is to recognize that we were not prepared, not only in terms of health, and that when it happened it was not known, neither diagnosed nor solved, mainly because when the future is negative we always tend to underestimate it.

The new crisis has brought us, among others, an acceleration of digitalization, greater state control, less middle class and poorer, more teleworking and electronic commerce, and new economic discussions, some about the value of Chinese authoritarian capitalism or a new idealized collectivism.

How all this influences our sector, it already seems catastrophic and we must work with that. A structural change is going to be imposed on us and it is necessary for us to be on the front line to adapt our businesses to the new reality. The success of our companies will depend on our success in this adaptation, foreseeing it, planning it and mainly making the right decisions; That is, what has always marked the success or failure of a business project.