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KPMG: Commercial real estate market continues to rebound
July 27, 2012
By Rob Starr, Content Manager, Big4.com
Commercial real estate industry executives say multi-family development will continue to grow but they remain focused on initiatives that increase operational efficiency and reduce costs. As well, the commercial real estate market continues to rebound in a lackluster economy.
This according to a recent survey by KPMG LLP, the audit, tax, and advisory firm.
Signs of that sense of tempered optimism are seen in executive predictions for hiring and revenue. Fifty-eight percent of respondents expect to add jobs in 2013 – up from 53 percent in last year’s survey – while 30 percent predict headcount levels will remain the same and 12 percent expect headcount to decrease. Additionally, a year from now, 8 percent expect their companies’ revenue to be significantly higher, while 59 percent predict moderate growth and 24 percent expect no change. Nine percent expect revenue to decrease.
When asked to identify the three areas where their company would most increase spending over the next year, 52 percent of the KPMG survey respondents said information technology (IT), followed by acquisition of a business (37 percent) and employee compensation and training (32 percent). Among those respondents who said their company had significant cash on its balance sheets, the most likely time frame for investment was this year (54 percent) or next year (33 percent), while 13 percent said 2014 or later.
The KPMG survey was completed in June 2012 and reflects the responses of nearly 80 senior executives in the commercial real estate industry. Based on revenue in the most recent fiscal year, 7 percent of respondents work for companies with annual revenues exceeding $10 billion, 36 percent with annual revenues in the $1 billion to $10 billion range, 55 percent with revenues in the $100 million to $1 billion range, and 2 percent with revenues of less than $100 million.