In a national survey of real estate chief financial officers and senior comptrollers conducted by Grant Thornton — the U.S. member firm of Grant Thornton International — 93% expect commercial real estate values to decline during 2009. However, 63% report that their company’s property tax assessments have increased during the past three years.
“The results of this survey predict an interesting future for state and local governments,” said John Michel, a Grant Thornton real estate tax partner. “With real estate CFOs predicting a decline in prices for commercial real estate for the remainder of 2009, state and local governments will be hard-pressed to get additional tax revenue out of businesses.”
Four out of five real estate CFOs (82%) believe the U.S. economy will remain in a recession through the end of 2009, 75% expect the U.S. economy will remain the same or get worse in the next six months, and 39% expect their company’s headcount to decrease.
Regarding pricing pressures, 71% of real estate CFOs are concerned about the cost of employee benefits (e.g., health care, pensions), while 74% are cutting costs by not giving raises this year and refining processes and streamlining.