Survey says real estate market is more competitive this year
Although a majority of real estate professionals consider the real estate environment more competitive today than a year ago, even more are confident about their own companies and are planning for long-term expansion, according to a new biannual real estate industry survey.
More than half – 59 percent – of the respondents to Grant Thornton LLP’s 2006 Real Estate Industry Survey show optimism for the national economy and the real estate market in general, while 80 percent are optimistic about the future of their own business. Still, 63 percent of respondents agree that the real estate marketplace is more competitive than a year ago.
Real estate professionals anticipate taking action in the next 12 months that will mirror their confidence in the industry and their businesses. Three-fourths (74 percent) say they plan to increase the number of assets in their company portfolio, 71 percent expect to increase the number of employees, 68 percent anticipate an increase in capital spending, and 66 percent plan to increase health benefits spending.
“Competition in the marketplace is a constant threat, but the survey shows it has not curbed the enthusiasm real estate professionals have for their businesses,” said Tom Novosel, a new managing partner of Grant Thornton’s national construction, real estate and hospitality practice. “If this enthusiasm is an accurate indicator of what’s to come, we can expect some big developments in the industry.”
When it comes to ensuring continued business success, the factors respondents rank as most important include attracting new tenants (86 percent), retaining key employees (78 percent) and managing the company’s portfolio of investments (77 percent).
Other issues addressed in the 2006 Real Estate Industry Survey:
Factors in the economic landscape that influence the real estate industry
Anticipated changes in marketplace rates
International vs. domestic investments
Respondents’ opinions on the real estate bubble, the rise in condo conversions, tenancy-in-common investment structures and other market issues
If you would like a printed copy of the survey, please e-mail Grant Thornton at CRH@gt.com or call 1.888.299.7269. Or download an electronic version of the survey at www.GrantThornton.com/REsurveyform.
About the survey
The Grant Thornton 2006 Real Estate Survey, the inaugural edition of the biannual survey, was designed to solicit the opinions and activities of a broad range of industry professionals. An invitation to participate in the online survey was sent to 1,000 real estate contacts in the Grant Thornton database and to the select group of 4,000 real estate professionals who are members of the National Association of Office and Industrial Properties. A total of 125 completed surveys were collected between April 18, 2006 and May 10, 2006.
Respondents of the survey describe themselves as developers (34 percent), property managers (14 percent), real estate investors (14 percent), and owners (12 percent). Others include asset managers (6 percent), brokers (4 percent), or construction contractors (1 percent). With regard to revenue size, two-thirds (66 percent) represent companies with 2005 gross revenues of $250 million or less, while 12 percent had revenues of more than $250 million to $500 million.