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Wipfli LLP (Wipfli), a top 20 accounting and consulting firm, today published a new report based on a survey of 198 real estate firm leaders to learn how they’re adapting for long-term success and reacting to evolving market conditions. Respondents to Wipfli’s real estate industry outlook prioritized differentiators like ESG and technology, as well as business strategies such as tax incentives and the ability to easily repurpose spaces. Among the key findings:
“The technology debt incurred by the real estate industry has come due,” said Brad Werner, leader of Wipfli’s construction and real estate practice. “Our survey validates that real estate organizations understand that investments in their technology and digital capabilities are key to remaining relevant and resilient, particularly as investor and tenant demands shift due to external factors, such as the ESG movement.”
ESG is now table stakes for the real estate industry. Only 23% of survey respondents said ESG hasn’t impacted their investor pool or projects. The other 77% revealed ESG has had a variety of different impacts. For some, it’s decreased their investor pool and made it tougher to bring in new investors. Others said it’s actually increased their projects. And still, others said their focus on ESG has helped them attract and retain employees. ESG needs to be an essential part of decisions around new acquisitions, lease renewals, and investor relations.
Compared to other industries, real estate lags behind in adopting new technology, but it has become a growing focus for real estate leaders. While some firms feel they don’t need the sophistication and connectivity offered by technologies more complex than spreadsheets and accounting software, others are recognizing how important their digital transformation is to their future success and longevity. The majority of survey respondents are on their digital transformation journey, with 38% having very clear objectives to meet, and 32% facing struggles in executing their plan. Only 15% don’t think digital transformation is necessary at all.
Further proof the industry is turning a corner on technology: 85% of real estate leaders recognize the importance of digital transformation. Reasons why: Better products are being developed, costs are decreasing, platforms are being standardized and, most importantly, data analytics are becoming more sophisticated. These days, technology is less about creating efficiency and convenience and more about creating value. Technology products are already helping organizations make decisions faster, close deals faster, and improve the structure of those deals. And that’s just one side of the benefits. Like ESG, technology is a need-to-have investment going forward to continue growing and competing.
To get deals done, real estate firms are also looking for a bonus that helps them make the numbers work. Tax incentives are numerous, and real estate firms are hesitant to do deals without them. And with all the disruption created by the COVID-19 pandemic, it’s not surprising that repurposing existing space was the second most important business strategy leaders are leveraging.
At Wipfli, we’re committed to providing industry-focused assurance, accounting, tax and consulting services that make a lasting, positive impact on our clients — helping them overcome personal and business challenges and plan for future success. Wipfli ranks among the top 20 accounting and business consulting firms in the nation. We’re proud to give our clients the value and experience of a diverse firm that specializes in a wide range of services and industries, dedicated to enduring results, outstanding service and lifetime relationships. Learn more at wipfli.com.
Media Contact:
Andrew Jennings, The Plunkett Group
andrew@theplunkettgroup.com
