The 2017 CFO Spotlight Survey attracted respondents from a number of industries in Phoenix and Tucson. We will highlight the real estate segment here in terms of growth, risk factors, strengths and trends.
Real estate investment and management groups responded to the CFO Survey - the majority based in Tucson. CFOs were less optimistic about revenues for 2017, with 14% expecting revenues to decrease slightly. However, optimism for their city was much higher, with 57% expecting the climate to be better than 12 months ago and 43% expecting it to remain stable. Respondents were looking for better tax incentives, talent, and next generation leaders. They were unique in citing the importance of law enforcement and safety as well as fair cross-border trade. Population growth or decline is an ongoing concern as well as staffing and competition. Real estate leaders also noted the impact that regulation and industry consolidation have on their tenants' industries, which in turn leads to lower occupancies. [infogram id="industry_outlook___real_estate" prefix="PT6" format="interactive" title="Industry Outlook - Real Estate"] Price increases were on the agenda in 2017 for 57% of respondents who noted the importance of retaining tenants despite passing on costs. Providing competitive compensation was a concern for the majority of CFOs, followed by owner retirements, training and reputation management. Access to capital is an ongoing concern in this industry, especially due to the changing tastes and desires of consumers in housing and office space. Half of CFOs surveyed in real estate noted work-at-home options and flexible schedules as attractive for recruitment and retention.
AVERAGE SIZE: 75 employees AVERAGE REVENUE: $1.3 million
Will increase significantly: 57%%
Will increase slightly: 29%
Decrease slightly: 14%
Optimism?43% somewhat optimistic14% somewhat uncertainAccess to Cash?No problem!Border Security?33% large impact; 33% some impactEnvironmental Issues?Emerging problemMillennials?Warm
Top Areas of Focus:
Social Media Monitoring
Maintaining Occupancies After Rent Increases
CFOs in real estate cited concerns over water issues, given that mountainous regions are growing fast but have less water. They expect potential increased costs for water-saving technologies in buildings as well as challenges with current landscaping methods.
Eric Majchrzak is a shareholder and chief strategy officer of BeachFleischman PC.