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The role of chief financial officers (CFOs) has undergone a significant shift in recent years. Traditionally focused on managing finances, modern CFOs now act as strategic partners, navigating changing business dynamics. This transformation was accelerated by the pandemic, which forced companies to reassess their operations and real estate needs.
As a result, handling real estate and infrastructure decisions has become a critical challenge for CFOs. Middle-market companies, in particular, often lack dedicated personnel for these tasks, leaving CFOs to take on this responsibility due to its significant financial implications.
CFOs must consider various factors when making real estate decisions, including tax implications, housing needs, and supply chain evaluations. Tax incentives can have a substantial impact on operating costs, profitability, and long-term financial outlook. For example, a company may save millions by choosing a location with favorable tax incentives.
Tax increment financing (TIF) is another consideration in these decisions. TIF uses future property tax revenue to fund community improvement projects, stimulating economic development. CFOs must also prioritize housing availability for employees, ensuring locations are near various housing options and commute-accessible.
In industries like healthcare or industrial manufacturing, where employees come into facilities daily, a variety of workforce housing is crucial nearby. Additionally, supply chain challenges should be considered when selecting facility locations, such as easy access to freeways, railroads, and shipping ports.
The evolving role of CFOs requires them to become skilled in various topics within their organizations. A successful real estate and infrastructure strategy demands that CFOs align company priorities with financial bandwidth when selecting new office or facility locations or engaging in expansion discussions.
