2017 Real Estate Industry Outlook Survey | KPMG | IE

Real estate expansion lives on

Real estate expansion lives on

Read our 2017 outlook report to explore what micro and macro factors are contributing to this sustained optimism in commercial real estate.

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The historically long upturn in real estate we are currently experiencing shows few signs of slowing down. But while real estate industry leaders are bullish about the market’s prospects in the coming year, 2017 may be the year of moving down the risk curve. They predict promising opportunities ahead—if one can see through the noise in the market and make the strategic choices necessary to seize these opportunities. The industry is grappling with how to capitalize on a growing domestic economy and strong real estate fundamentals, yet manage growing uncertainty and complexity in the market, including a surprise Trump presidency, potential tax reform, and rising interest rates.

This white paper was designed to investigate the micro and macro factors contributing to the sustained optimism in commercial real estate and outlines what actions investors, owners, managers, and service providers will take in the coming year to get ahead of anticipated challenges, seize near-term opportunities, and “sustain the boom.”

The paper also revealed the following:

Conditions continue to be favorable in U.S. real estate markets.

  • Executives say the U.S. economy will be the same or better in 2017 versus 2016. Companies expect to be able to find funding for real estate deals and have strong access to equity capital.
  • Real estate fundamentals are expected to improve.

Uncertainties in the real estate market haven’t dampened real estate leaders’ bullishness, but they do present some risks that must be understood and managed.

  • How President Donald Trump’s policies—from tax reform to immigration—will impact the sector remains to be seen.
  • Changes to the Affordable Care Act and federal tax laws may impact real estate companies’ operations and bottom line.
  • Rising interest rates may impede first-time home-buying.
  • Data breaches are a clear and present danger, but the real estate industry has some catching up to do on cybersecurity.

There will likely be substantive activity in the sector in 2017 as executives continue to focus on growth, efficiency, and customer satisfaction.

  • Organizations are prepared to seek out the best deals in what’s becoming a tougher market as far as supply. Respondents expect the best opportunities to be concentrated in the hottest locales and property types. They also plan to target prime asset classes.
  • Companies plan to embrace significant change and transformation, including investment in organic growth such as new product development, pricing strategies, geographic expansion, and open-ended and debt funds.
  • Companies plan to focus on boosting bottom-line efficiency, such as by implementing back-office and property management technologies and making process improvements.

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