Risks in Commercial RE
What You Need To Know:
What are some of the top risks in Commercial RE?
The 10 biggest issues confronting the industry, including global business risks, have been highlighted by Ernst & Young.
They compile their rankings by interviewing commentators and academics in each sector of commercial real estate, and have them focus specifically on risks affecting leading global firms.
After the compilation is performed, the results are compared with last year’s numbers, indicating a change-rate. Respondents included CEOs, analysts, advisors, strategy planning executives, trade journalists, and their own practice professionals on staff.
And the Top 10 Risks are:
- Continued uncertainty and impact of the credit crunch
- Global economic and market fluctuations
- Impact of aging or inadequate infrastructure
- Global war for talent
- Changing demographics
- Inability to find and exploit global and non-traditional opportunities
- Pricing uncertainty
- Green revolution, sustainability and climate change
- Economic vulnerability and regulatory risks in developing markets
- Volatile energy costs
E&Y ranks the impact of number three as one of the biggest issues confronting the industry, mainly because of the credit crunch as implementations of many new initiatives were delayed or canceled.
A primary source of infrastructure funding might come from governments. China announced a primary focus of its $586 billion stimulus package to infrastructure spending and a portion of President Obama’s $787 billion stimulus package was targeted for the same.
Although all eyes are on the capital markets, they caution investors not to lose sight of a worldwide shift in demographics. The middle class in many developing countries along with the aging population in the West have affected the numbers of what will be built, where it will be built and how it will be funded.
The second greatest risk facing the industry in the near-term is global economic and market fluctuations, yet for some, these hard-hit areas can create opportunities. To stay competitive, clients with portfolios of real estate assets can respond to these economic fluctuations by utilizing tax advantages and implementing a comprehensive due-diligence process including selecting the right local partners.
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Who have you partnered with lately? iCORE Global is here to ensure that while risks abound in every industry, we can overcome them together. When we know the risks and share where they are, we are then able to use that information to solve problems before they happen. Collectively.
iCORE also provides visibility within the client profile, prevents losses and increases repeat business through a robust real-time technology platform.
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