Despite routine government-issued security alerts, many real estate firms are unprepared for a crisis, says a survey by accounting and tax firm KPMG LLP. The poll of 21 senior level executives from firms with $500 million or more in revenues found that 53% of respondents have no preparedness plan in place.
"The risk after Sept. 11, 2001 is out there. It’s surprising how few of these firms are prepared for a crisis of any magnitude," says Ray Milnes, industry sector leader for KPMG’s real estate practice.
Only one-quarter of the respondents believe that they are prepared for a crisis, while one-third did not even rate crisis preparedness as a priority. "With the definition of corporate crisis having been rewritten so many times in the past year, companies should no longer soft-pedal crisis planning," says Milnes.
Though many firms claim to be unprepared, 83% of the firms were confident that they would rebound swiftly from any crisis.
According to Milnes, 40% of businesses that suffer a disaster will go out of business within two years. Firms that are taking the threat seriously have established new security protocols and measures. It isn’t cheap, either.
"Earnings are down at so many firms and the economy is in bad shape so these measures might not be that popular because they cost money. But the price of losing business continuity is much higher," says Milnes.
With the CIA warning that the threat of another terrorist strike on U.S soil is very high, it stands to reason that real estate owners and managers should examine worst-case scenario protocols. Even if they tried to, however, self-diagnosis would be extremely difficult for many — one quarter of the survey’s respondents reported that they do not even have a way to analyze crisis preparedness.