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Current Developments for the Real Estate Industry Winter 2017
Current Developments for the Real Estate Industry
Winter 2017
Table of contents
I. In the market and recent real estate trends 2
II. Accounting and financial reporting hot topics 2
III. Update on tax matters 2
IV. Regulatory considerations 2
V. Governance discussion 2
VI. Technology trends and update 2
I. In the market and recent real estate trends
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I. In the market and recent real estate trends
1. Emerging trends in real estate - Capital markets update
“Big assets, big cities, big capital, and big competition. The U.S. is more in favor than the rest of the world right now.”
U.S. commercial transaction volume was down by 10 percent during the second quarter of 2016 on a year-over-year basis, according to Real Capital Analytics (RCA), following a similar dip in the first quarter (18 percent). This was the first time since 2009 that investment transactions declined in two consecutive quarters and only the second time since 2009 there was any decline, a phenomenon that got the attention of the real estate industry with the subtlety of a whack with a two-by-four. In a world where growth is taken for granted as “a good thing,” contraction is taken as prima facie evidence of trouble. It ain’t necessarily so.
Nearly a decade ago, a massive accumulation of world savings was flooding the American markets, driving prices to unsustainable levels. Transaction volume for 2015 rose 26 percent from the year earlier, to $545.4 billion. Were we once again pushing into the territory of unsupported asset inflation? Concerns about a potential asset bubble were on the minds of Emerging Trends interviewees a year ago, but we observed capital seeking to remain disciplined. The objective was clearly to avoid a repeat of “the last time around.”
Led by apartment investment, the fourth quarter of 2015 established a new high-water mark of $168 billion in total transaction volume, 7.6 percent above the prior peak in the second quarter of 2007. It is actually an encouraging sign that early 2016 brought an air of greater conservatism. Right now, we are not seeing money chasing deals under the sheer pressure of getting the capital out. This is a good thing.
The markets seem to be adjusting the flow of investment, both in overall quantity and in asset selection, ahead of any potential bubble. One observer with long institutional investment experience calls the level of caution at this phase of the cycle “unprecedented in my lifetime.” It seems that the global financial crisis, for all its pain, may actually have been a “teachable moment” for the real estate industry.
PwC has recently published its Emerging Trends in Real Estate® 2017. Our forecast gives a heads-up on where to invest, which sectors and markets offer the best prospects, and trends in the capital markets that will affect real estate.
Please refer to the 38th edition of the publication, which includes interviews and survey responses from hundreds of leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.
2. Emerging trends in real estate - Infrastructure
Infrastructure emerges as a key real estate development issue, ranking nearly as high as land cost and construction cost, according to the Emerging Trends in Real Estate 2017 survey results. In fact, a whopping 96% of our survey respondents cite infrastructure as an important issue.
This rising emphasis on infrastructure is driven in part by a significant cultural change: Where “exclusivity” was often seen as a critical selling point for real estate in the past, it is now being eclipsed by “inclusiveness” as a millennial social value. To attract this new generation of 83-million strong urban-centric workers, cities should focus on offering more diversity, amenities, and transit options.
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Business needs are also driving change in infrastructure. Smart, wired infrastructure enables cities to monitor and control energy use, transportation patterns, and utilities for maximum efficiency. And innovative infrastructure that fosters a sustainable environment is becoming the way of the future as more workers see it as key to a city’s “livability.”
This kind of infrastructure transformation comes with a price tag, of course. Fortunately, we anticipate more potential capital in-flow, particularly as more private investors see infrastructure as an alternative asset class and more public-private partnerships are forged to finance US infrastructure projects.
This PwC Emerging Trends – 2017 Infrastructure update takes an in-depth look into recent infrastructure real
estate development issues. PwC also published a recent 7 Day Yield, a video exploring current trends in the commercial real estate industry.
II. Accounting and financial reporting hot topics
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II. Accounting and financial reporting hot topics
1. AICPA conference – Spotlight on real estate
The 2016 AICPA National Conference on Current SEC and PCAOB Development was held on December 5-7 in Washington D.C. The conference featured representatives from regulatory and standard setting bodies, along with auditors, preparers, securities counsel and industry experts. Presenters expressed views on a variety of accounting, auditing, and financial reporting topics.
The theme of this year’s conference was similar to last year’s, management: the auditor, and the audit committee all have important roles to play in providing high-quality, decision-useful information to users of the financial statements. This year’s Keynote Speakers (specifically, Wesley Bricker, Chief Accountant of the SEC and Kimberly Ellison-Taylor, Chairman of the AICPA) added an element highlighting the important of communication among all participants in the financial reporting supply chain. The importance of this communication and the roles each participant plays are of equal importance to stakeholders in every industry regardless of the size of the company. There were a variety of topics discussed that were of specific interest to the Real Estate Industry.
SAB 74 disclosures
Sylvia Alicea, Professional Accounting Fellow, Office of the Chief Accountant, emphasized the disclosure requirements regarding the expected impact of the future adoption of new accounting standards under Staff Accounting Bulletin No. 74 (SAB 74) and reiterated the SEC Observer’s comments regarding these requirements at the September 2016 EITF meeting. Specifically, registrants are required to disclose both quantitative and qualitative information regarding the expected impact of adopting new accounting standards. If a registrant does not know or cannot reasonably estimate the expected financial statement impact, then in addition to making a statement to that effect, the registrant should consider additional qualitative disclosures to assist the reader in
assessing the impact the standard will have on the financial statements when adopted.
As announced at the EITF meeting, the SEC staff expects the additional qualitative disclosures to include a description of the effects of the accounting policies that the registrant anticipates applying, if determined, and a comparison to the registrant’s current accounting policies. For example, if a registrant has not yet completed its analysis of the impact of the new leasing standard on its population of leases, it should consider disclosing, at a minimum, any qualitative factors that based on its assessment as of that time may impact the expected timing of leasing revenue recognition that is different than under current policies. A registrant should also describe the status of its process to implement the new standards and the significant implementation matters yet to be addressed.
Alicea also encouraged registrants to disclose known or reasonably estimable quantitative information about the expected impact, even if such information is only available for a particular subset of the registrant’s arrangements (e.g., certain lease types). She noted that registrants should not be reluctant to disclose reasonably estimable quantitative information just because actual results may differ upon adoption. Lastly, she emphasized the importance of aligning SAB 74 disclosures with information communicated to audit committees and investors, and that the information disclosed must be subject to the registrant’s system of internal control over financial reporting.
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Non-GAAP financial measures
References to non-GAAP measures were pervasive throughout the conference. While the SEC staff noted that progress had been made since the May release of the SEC staff’s Compliance and Disclosure Interpretations (C&DI), some registrants still need to address issues related to the appropriateness and prominence of non-GAAP measures. Bricker shared his view that audit committees should understand the non-GAAP measures used by management and the controls surrounding their preparation.
Non-GAAP measures were also the topic of a separate panel, which included Mark Kronforst, Chief Accountant in the SEC’s Division of Corporation Finance (CorpFin), Martin Dunn, a former Deputy Director of the Division of Corporation Finance, a preparer, and an analyst. The panel discussed that the most significant concern with respect to non-GAAP measures is undue prominence, which was the main impetus for the release of the C&DI. Kronforst also discussed a recent trend in SEC staff comments asking registrants to start their non-GAAP reconciliation with the GAAP measure. Kronforst’s view was that it is more intuitive to start the reconciliation with a GAAP amount so that investors can see the adjustments that lead to the non-GAAP amounts.
When asked about “acceptable” non-GAAP adjustments, Kronforst noted that the SEC staff does not issue frequent comments requesting the removal of non-GAAP adjustments related to restructuring or legal settlements. He also indicated that the staff generally does not object to adjustments related to stock-based compensation expenses or the impact of purchase accounting adjustments for the step up in inventory or amortization that will only have a short term impact. However, they will consider the size of the adjustments and the explanations provided to ensure the adjustments comply with the C&DI guidance.
SEC disclosure observations
Nili Shah, Deputy Chief Accountant, Division of Corporate Finance, also highlighted two specific areas frequently discussed at this and prior conferences that continue to be the focus of SEC staff comment letters.
First, she reminded registrants of the requirement to critically examine all of the aggregation criteria for operating segments and all of the economic characteristics (quantitative, qualitative, and consistency with the overall principle), rather than only looking to the quantitative characteristics, alignment of which may be coincidental.
Second, the SEC staff is still concerned about a lack of improvement in the income tax focus points from last year, including the presentation of the income tax rate reconciliation and boilerplate disclosures related to changes in valuation allowances and unrecognized tax benefits, and the indefinite reinvestment assertion. She was clear that a failure to improve disclosure in these areas this year will likely result in comments from the SEC staff. Shah also described tax-related disclosures she believes should be addressed in MD&A, including the reasons for changes in the statutory and effective tax rates (ETR), the extent to which the historical ETR is indicative of the future tax rate, the effect of taxes on liquidity, and uncertainties related to the registrant’s tax positions.
Standard setting update
Definition of a business and Goodwill impairment - Sue Cosper, FASB Technical Director and EITF Chair, provided a brief overview of recently issued standards and those to be released in the near-term. The FASB guidance on the definition of a business, which was issued on January 5th of this year, is expected to narrow the population of transactions that qualify as an acquisition or disposition of a business. She also discussed the provisions of the revised guidance on accounting for goodwill impairment, which is expected to be released later this month (January 2017). She believes the elimination of “step two” under the two-step impairment test will address concerns raised by preparers about the cost of applying the current model, although the expected reduction in the number of Business Combinations going forward as a result of the definitional change may also ease this burden for many preparers.
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Leases – Although the impact is not as comprehensive as the new revenue recognition standard, Cosper acknowledged that the new leases standard is still a significant change for both lessees and lessors. The highest volume for technical inquiries to the FASB has related to lessee accounting and transition to the new standard. A panel of preparers discussed the technical and operational implementation challenges of the new leases standard. Specifically, they emphasized the need to analyze all existing arrangements to determine if certain elements now qualify for lease accounting under the definition in the new standard. The panel noted that implementation requires the involvement of a wide range of individuals throughout an organization and may require significant changes to processes, systems, and internal controls. Companies should also consider how the new standard will impact their performance metrics, debt covenants, and other financial measures.
Accounting policies – Sean May, Professional Accounting Fellow, discussed the presumption within GAAP that accounting policies will be consistently applied from period to period. May noted that when a new accounting standard requires a change in accounting principle, it is not necessary to evaluate whether the change is preferable. Additionally, events or transactions that are clearly different in substance from those previously occurring may necessitate the adoption of a new or revised accounting policy, which also does not require an evaluation of preferability.
Credit losses – May noted that virtually every registrant will be affected by the new credit loss guidance (not just large banking institutions), which applies to loans, debt securities, and trade receivables, and is effective for calendar year-end SEC registrants in 2020. May focused on how management should begin preparing for the standard. Specifically, he believes management should assess how existing methods and processes for estimating incurred credit losses would need to be adjusted to develop the estimate of expected credit losses required by the new standard. The guidance does not require a specific method for measuring expected credit losses, and each of the
various methods will have different implementation challenges.
Equity-method accounting and the definition of “public business entity” – Jonathan Wiggins, Associate Chief Accountant, Office of the Chief Accountant, discussed whether certain entities would be considered public business entities when their financial information is included in the financial statements of an SEC registrant. The distinction of whether an entity is a public business entity or not is important, as many recently published standards, such as ASC 606, stipulate an earlier effective date for public business entities.
The definition of a public business entity includes business entities whose financial statements or financial information are required to be or are included in an SEC filing. For instance, if a registrant’s equity-method investment is considered significant under Regulation S-X, its financial statements or financial information is required to be included in the registrant’s SEC filing. As a result, such financial statements or information included in the SEC filing and the associated income/loss pickup under the equity method of accounting should be based on the equity-method investee being considered a public business entity. This means that the equity-method investee would need to reflect the impact of ASC 606 (or any new accounting standards with similar transition guidance) based on the accelerated timeline of public companies, which is usually a year earlier than if the investee was considered a private company.
There may, however, be situations when an investee is accounted for using the equity method but is not otherwise considered a public business entity. Wiggins stated that in his view, amounts recognized by a registrant in applying the equity method of accounting would not be considered “financial information included in a filing with the SEC” under the FASB’s definition of public business entity. Therefore, such investments would not be subject to the public business entity guidance solely because they are accounted for as an equity-method investment, but that distinction would apply to an
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entity only if it was significant such that additional financial statement information is required in a registrant’s filing. This distinction is going to be very important to those Real Estate stakeholders who operate their business through a significant amount of equity method investments.
Measurement period adjustments in business combinations – An acquirer in a business combination is required to report provisional amounts if the initial accounting for the business combination is incomplete at the end of the reporting period covering the business combination. The acquirer must recognize adjustments to those provisional amounts to reflect new information obtained within the measurement period about facts and circumstances that existed as of the acquisition date. Wiggins reminded participants that the measurement period is not one year, but rather ends as soon as the acquirer receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Such period is not to exceed one year.
Wiggins also referenced the FASB’s recent guidance that eliminates the requirement to retrospectively reflect measurement period adjustments. Measurement period adjustments are now recorded in the current reporting period and separately reported or disclosed. He stressed the importance of distinguishing between a measurement period adjustment and the correction of an error. Accounting errors, when material, require restatement of prior periods. Accordingly, registrants should ensure they have sufficient internal control over financial reporting to identify and account for measurement period adjustments and determine when an adjustment represents an accounting error. This distinction will be of increased importance to those companies that commonly used Measurement Period Adjustments for business combinations that will in the future be considered asset acquisitions under the new definition of a business (as a result Real Estate entities may be impacted more frequently), as Measurement Period Adjustments are not applicable to Asset Acquisitions. This may require certain
changes to a company’s internal process to ensure compliance with what is perceived as an abbreviated time table.
PCAOB inspection results and findings
Helen Munter, Director, PCAOB’s Division of Registration and Inspections, highlighted three areas where the PCAOB has observed strong audit work: (1) developing an appropriate understanding of the issuer, including processes, transactions and controls, (2) coaching at the engagement team level, as well as the engagement team member level, and (3) monitoring—overseeing what engagement teams are doing while also performing “in-flight” reviews of audits in process. Munter also previewed the PCAOB’s 2016 findings, which included issues related to (1) ICFR, with continuing concern over management review controls, (2) assessing and responding to risk of material misstatement, although they saw improvement with respect to the testing of system-generated reports, (3) accounting for estimates, including fair value, and (4) related parties, given the new auditing standard. Looking ahead to 2017, Munter commented on the PCAOB’s expected areas of focus for the next inspection cycle, which include (1) the recurring areas of inspection deficiencies noted above, (2) audit areas impacted by economic trends and higher financial reporting risk and (3) risk assessments, with increased probing to understand the risks identified and how tests are designed to address those risks, including the risk of fraud.
Refer to PwC’s In depth for more details about the conference. Further, refer to the December 2016 Regulatory and standard-setting developments publication for additional FASB, PCAOB, and SEC related developments.
2. Real Estate Insight: The new definition of a business and its impact on the real estate industry
On January 5, 2017, the FASB issued final guidance that revises the definition of a business. The definition of a business affects many areas of accounting (e.g., acquisitions, disposals, and, consolidation). According to feedback received by the FASB, application of the
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current guidance is commonly thought to be too complex and results in too many transactions qualifying as business combinations.
The new standard
When substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. This introduces an initial screen that, if met, is determinative as to asset acquisition, and eliminates the need for further assessment. For the real estate industry this will be very important as lease hold intangibles are explicitly included with the land and building to collectively become a “single identifiable asset”, and thus substantially all of the fair value (commonly considered 90%) acquired will commonly be concentrated in this group, in which case an asset acquisition will result. More complex real estate types such as Full Service Hotels and certain Skilled Nursing Facilities may not meet this screen as frequently based on the individual facts and circumstances.
If the screen is not met, the full model must be applied. Under the full model, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The new guidance provides a framework to evaluate when an input and a substantive process are present (including for early stage companies that have not generated outputs). To be a business without outputs, there will now need to be an organized workforce. The FASB noted that outputs are a key element of a business and included more stringent criteria for sets without outputs.
Finally, the new guidance narrows the definition of the term “outputs” to be consistent with how it is described in Topic 606, Revenue from Contracts with Customers. Under the final definition, an output is the result of inputs and substantive processes that provide goods or services to customers, other revenue, or investment income, such as dividends and interest.
While individual property transactions for most property types where leasing activity is the primary business, will likely be asset deals, entity level transactions (REIT
M&A/mergers etc.), portfolio deals, hotels with more than a minimal level of service offerings, and certain full service skilled nursing facilities may still be business combinations.
Transition/Adoption
Mandatory transition for public companies is in 2018 (i.e., period beginning after 12/15/2017), and it is completely prospective. Private companies have one additional year to comply if desired. Early adoption is permitted for transactions that have not yet been reported (likely means Q4 2016 transactions for calendar-year end public registrants and possibly even all of 2016 for calendar year-end private companies) and/or 2017 forward. Many of our clients will likely be interested in early adoption, as a result of the various reasons discussed below. Also, registrants will need to get SAB 74 disclosure crafted for December 31, 2016 10-Ks whether or not they expect to early adopt.
Similarities and differences between the business combinations and asset acquisitions
Key Differences:
While transaction costs are expensed in a business combination, they are capitalized in asset acquisitions. (This may be a big benefit to non-traded REITs as this was one of the main differences from NAREIT FFO and MFFO.)
Differences in how to account for contingent consideration. In a business combination you record at fair value on the date of acquisition (subsequent changes hit P&L), while in an asset acquisition it is recorded when probable and reasonably estimable (subsequent changes hit cost).
There can be no goodwill or bargain purchase gains in an asset acquisition.
As a result of the lack of goodwill or bargain purchase, cram down rules apply in asset deals, which may at times put more pressure on registrants as it relates to the fair value of individual assets and liabilities, if the amount to be reallocated is significant.
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The one year measurement period does not apply to asset acquisitions. For entities who were frequent users of this window, this may necessitate some process changes to accelerate PPA completion on asset deals.
Contingencies are recorded in accordance with ASC 450 under both, however business combination accounting forces the company to assess if the contingency was determinable, and if so, allocate fair value to it. No such requirement exists for asset acquisitions.
However, one key thing is the same under either model:
This change does NOT eliminate the requirement to allocate purchase price to ALL identifiable assets and liabilities (specifically to include lease related intangibles, should they exist) other than goodwill. The definition of a business under ASC 805 (Formerly SFAS 146(R)) had such allocation and the allocation requirements for asset deals (Formerly SFAS 142) references back to them. In 2008/2009, the SEC expressed its view even before the SFAS 141(r) definition changed noting the allocation was required under SFAS 141 and further that it was appropriate going back to APB 16.
III. Update on tax matters
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III. Update on tax matters
1. Post-election tax reform implications for the real estate industry
Now that the election is behind us, it’s a good time to consider how the results will affect the real estate industry and, in particular, whether new tax legislation may be on the horizon. Comprehensive tax reform is increasingly possible over the next two years with the Republicans having control of the House, Senate and White House. While not offering a detailed plan for many of his proposals, the known elements of President-elect Trump’s tax plan could, if enacted, significantly impact U.S. real estate companies, fund and their investors. Further clarity on some of these proposals is expected in the next few months.
Notably, there could be considerable changes to both individual and business tax rates. The real estate industry generally would be expected to welcome the proposed rate reductions. However, they would need to consider whether there will be any offsets to pay for those rate reductions which may include provisions that would adversely affect the real estate industry. Possible offsets include changes to the taxation of carried interest, limits on the ability to defer tax on like-kind exchanges, increases in depreciable lives of real estate assets and limits on interest deductibility.
Real estate companies, funds and investors should closely monitor US tax policy developments over the next year and assess the potential impact on existing and future investments, fund structures, as well as returns for the ultimate investors.
PwC has prepared a summary of certain tax provisions that may be affected by tax reform and are of importance to holders of real estate which are included in a recent PwC Real Estate Tax Alert. Additionally, PwC's Tax Leader, Roy Weathers, discusses key policy topics on the agenda of the new administration within a 7 Day Yield Special Edition.
IV. Regulatory considerations
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IV. Regulatory considerations
1. Ten key points from Donald Trump’s electoral victory
President-elect Trump and his supporters have publicly called for the overhaul of Dodd-Frank and related regulations enacted since the financial crisis, while Democrats have been steadfast in maintaining one of the major accomplishments of the Obama presidency. We have watched the incoming administration’s statements and actions with interest, along with the hardened views of congressional leaders and the complex myriad of financial regulations that are in place or still to come.
As a result, we have been cautious to publish our specific views or predictions – the safest prediction is obviously to say things are unpredictable. However, after much debate and discussion with clients and contacts in Washington, we have decided to follow the advice of Peter Thiel and take the incoming Trump administration more seriously than literally.
PwC’s financial services regulatory practice has prepared a First take detailing ten key points from Donald Trump’s victory.
V. Governance discussion
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V. Governance discussion
1. Top insights from PwC’s 2016 Annual Corporate Directors Survey
Overseeing a company is no small task. Disruptive technologies are changing companies’ business models, geopolitical turmoil is impacting supply chains and investment opportunities, and increased regulatory complexity is affecting innovation. Institutional investors and shareholder activists are also playing a more powerful role shaping corporate governance. Boards of directors have to keep up with all of these changes in order to be effective.
Our 2016 survey uncovered 10 key findings that have a major impact on how boards perform. Diversity in the boardroom remains a topic of debate in the governance world, and male and female directors have differing opinions about its benefits. Directors are aware of their fellow board members’ performance—but not all are impressed. More than one-third of directors think someone on the board should be replaced. And despite their increasing oversight responsibilities and the many new issues boards have to understand, most directors say their workload is manageable. Investors are also a factor in corporate governance changes. They are pushing for changes to board composition and capital allocation strategy—and are often getting their way.
These are some of the themes identified in PwC’s 2016 Annual Corporate Directors Survey. Based on the responses of over 880 public company directors, the survey uncovered a number of key findings on how boards perform, including:
Should someone on the board go? Thirty-five percent of directors say someone on their board should be replaced. The most common reason is because they’re not prepared for meetings.
How beneficial is diversity to the board? It depends on who you ask. Nearly all directors (96%) agree that diversity is important. But female directors have a much stronger opinion about the benefits of board diversity than male directors.
Does dialogue with investors really matter?
Direct engagement between boards and investors has become much more commonplace over the past few years. But not all directors think the engagement is useful—21% of directors said they didn’t receive any valuable insights from directly engaging with investors.
Are activists good for business? Most directors say yes. Some critics charge that activists are too focused on short-term results, and 96% of directors agree. Even so, many directors concede that shareholder activism can ultimately be good for business. Eighty percent of directors at least somewhat agree that shareholder activists compel companies to more effectively evaluate their strategies, execution, and capital allocation.
Are directors concerned about their workload? Boards are increasingly being asked to expand their areas of oversight. But directors don’t appear to be overwhelmed with their responsibilities. Surprisingly, only 5% are “very much” concerned with their
Refer to Board governance in the age of shareholder empowerment: Insights from PwC’s Annual Corporate Directors Survey for more insights on director sentiment on board governance.
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2. Approaching the 2016 year-end financial reporting season
The 2016 calendar year-end financial reporting season is approaching and audit committees are preparing for their year-end meetings. Here, we highlight some of the financial reporting issues, SEC trends and other developments that audit committees should be thinking about, including;
Are we on course to adopt the new revenue recognition standard?
Are we comfortable with the company’s use of non-GAAP measures?
How will we be impacted by the new lease standard?
Should we enhance our audit committee proxy disclosures?
Do we have our arms around recent developments in the income tax space?
Refer to PwC’s Approaching the 2016 year-end financial reporting season publication to learn more about five things audit committees should be thinking about.
VI. Technology trends and update
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VI. Technology trends and update
1. The connectedness of cities
There are now more objects than people connected to the internet, a phenomenon known as “the internet of things.” Point- of-sale registers communicate with warehouses. Smart phones have apps to search stores for the best prices. Sensors embedded in roadways reroute logistics paths. HVAC systems are automatically controlled in real time.
Known by the shorthand “IoT,” the estimate for internet-connected devices hit 10 billion in 2015 and is projected to more than triple to 34 billion by 2020. As always, the relationship between advancing technology and the real estate industry is a complicated one. But the evidence suggests that a market’s trend toward technological advantage is correlated with superior real estate performance.
The seven “smartest cities” in the United States are listed as Seattle, San Francisco, Boston, New York, D.C., Portland, and Chicago in a ranking from Co.Exist, an online publication of the magazine Fast Company. Smart cities are defined as those gathering data from devices and sensors embedded in roadways, power grids, buildings, and other assets. They use an integrated communication system to share this information instantaneously. Software extracts information and discerns relevant patterns for users. Smart cities match well with the list that Emerging Trends identifies as top markets for investment and development.
Refer to PwC’s Top 10 trends for 2017, also included in the 2017 Emerging Trends in Real Estate®, to learn more about this technology trend affecting the real estate industry. The publication also describes other technology trends impacting the real estate industry including Improvements in Augmented Reality (AR) and Blockchain technology for 21st century real estate.
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PwC real estate contacts
Byron Carlock
US Real Estate Leader
(214) 754 7580
Tapan Nagori
PwC Financial Services Oracle EPM Leader
(312) 298 3574
Tim Conlon
US Real Estate Clients and Markets Leader
(646) 471 7700
Brian Ness
Partner, Real Estate Assurance Practice
(646) 471 8365
Richard Fournier
US Real Estate Assurance Leader
(617) 530 7168
David Voss
US Real Estate Tax Leader
(646) 471 7462
Jeff Kiley
Private Real Estate Equity Leader
(646) 471 5429
Tom Wilkin
U.S. REIT Leader
(646) 471-7090
Editorial board
Jordan Adelson
Manager, Real Estate Assurance Practice
(214) 754 7580
Tyler Lewis
Senior Associate, Real Estate Assurance Practice
(646) 471 8070
