… are doomed to repeat it. (George Santayanna)
The recent death of Paul Reichmann is an occasion to remember a part of Canadian history that people new to real estate industry may not be aware of.
At one time, his company (Olympia and York, which was run by the Reichmann brothers) dominated real estate in Canada, was instrumental in building many iconic buildings and were big players in the world. They are credited with reviving the New York real estate market in the late 1970s (when New York City nearly went bankrupt). They made another big investment in a run down part of London in the late 1980s (which was successful eventually).
But, that was during the 1980s. The 1990s were a different situation and O& Y went bankrupt. They were not the only ones whose fortunes changed when the friendly trend of price increases reversed direction. And that is part of the lesson. Companies such as O& Y, Campeau Corporation and Trizec used to be as important as Brookfield, Riocan and Dundee are today. People whose memory extends back two or maybe five years may not understand that staying on top takes real skill and effort; your success (or that of your competitor who seems like an 800 pound gorilla currently) is not inevitable.
As hard as they are working now, who knows which companies will be important 20 years from now? Real estate is a long term business and cycles play an important role. You might use this time to learn from the past before we head into the next phase of the cycle, whichever phase that will be.