2022 State of the Real Estate Industry Survey Results
The real estate sector faced many critical issues, as well as opportunities, over the last year. Some of the critical issues highlighted in the Bonadio Group’s State of the Real Estate Industry survey were the overall economic situation, funding, cybersecurity, talent management and staffing. From these issues rise opportunity, such as through various tax credits and incentives for funding purposes. As it relates to talent acquisition and retention, companies are exploring both DE&I (Diversity, Equity & Inclusion) initiatives to retain and attract new talent, as well as outsourcing opportunities for those positions that are hard to fill.
Repurposing Property
In the words of Bob Dylan, “There is nothing so stable as change.” Developers will need to react to the market in some cases, by making big changes. The office sector is experiencing shifts due to increased remote work flexibility and less demand for office space. Many developers are finding unique ways to repurpose some of that property, through coworking/shared space, innovation centers, and community focused space.
Funding
Regarding funding, many companies have incorporated various tax credits and incentives such as historic rehabilitation tax credits, brownfield credits, cost segregation studies and residential energy credits, into their funding and cash flow strategies.
Cybersecurity
With widespread technology integration in the business world and daily life, cyber-attacks are a serious threat. One strategy for testing a business’s resilience to cyber-attacks is the use of a penetration test, or a simulated cyber-attack against your network systems to check for exploitable vulnerabilities. 55% of the participants have utilized a third-party to perform a penetration test.
Another issue arising is a lack of resources, including high level information technology resources. Many companies are looking to outsource this function by hiring a vCISO (Virtual Chief Information Security Officer), who is an experienced “C-level” information security executive with leadership and strategy skills for a fraction of the salary of a full-time CISO. A vCISO can provide unbiased strategic and operational leadership related to various IT functions such as controls, standards, regulatory compliance, and risk management.
DE&I and ESG
Focusing on DE&I is pertinent to healthy workplaces. Employees trust, respect, and are more loyal to companies who prioritize these initiatives. 55% of the survey participants are prioritizing social issues such as DE&I and 67% believe that the real estate industry has equitable representation.
Environmental, Social, and Governance (ESG) has become increasingly important to many businesses. Obviously, sustainability has played a significant role in the real estate community, through various green efforts as well as tax incentives and credits. As ESG becomes an area of growing interest for financial statement users, such as investors, lenders and regulators, accounting rule makers may begin to require certain ESG related disclosures.
The Bonadio Group’s Real Estate Industry survey goes into more depth on the above topics and more. If you need further guidance or have any questions on any of the topics, we’re here to help. Please do not hesitate to reach out to our trusted experts to discuss your specific situation. The full study can be downloaded here.
