KPMG LLP, the audit, tax and advisory firm, completed the 2012 KPMG Commercial Real Estate Outlook Survey with reflections and responses of nearly 80 senior executives in the commercial real estate industry. The survey found that CRE executives remain focused on efficiency and cost cutting as the commercial real estate market continues to rebound in a lackluster economy.
"Commercial real estate executives are seeing their margins and profits being squeezed, so increasing operational efficiency and reducing costs is a key focus," said Greg Williams, national leader of KPMG LLP's Building, Construction and Real Estate practice. "At the same time, there is tempered optimism as industry fundamentals continue to slowly improve and bright spots emerge... Commercial real estate execs are finding it challenging to source sufficient product that will produce the necessary yields to meet investor expectations. The gap between ask and bid price can still be significant in certain markets," said Williams. "It's also taking a lot longer to raise capital needed to grow their portfolios, while increased regulatory reporting requirements are driving up costs."
58% of the respondents expect the U.S. economy to improve next year, but they remain guarded about an economic recovery. In fact, 63% do not expect the economy to recover as a whole until 2014 or later - as opposed to 77% who, in the 2011 KPMG survey, predicted the recovery would be complete by the end of 2013.
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