We are living in a dynamic world where things around us change so fast. This is applicable for commercial real estate appraisal practices as well. If you are into real estate appraisals, it is worth knowing what the future holds for. Read this article and we will share it with you.
Greater Reliance on Automation and AI
Automation is creeping into commercial real estate appraisals as well. There are few areas that can be automated. Routine valuations is a perfect example to prove the above mentioned fact. Advanced algorithms will be able to synthesize data and determine property values for certain assets without as much human oversight. However, human expertise will still be vital for complex appraisals.
More Real-Time Valuations
The commercial real estate industry will pressure appraisers to provide faster valuations. It can benefit stakeholders who can make quicker decisions. This will be enabled by technological improvements allowing appraisers to use real-time data. They come from the property and market to update their models continuously. However, lenders may still require traditional quarterly or annual valuations for financing purposes.
Increased Use of Drones and 3D Modeling
Drones and 3D imaging will become standard tools for commercial appraisers. It will allow them to efficiently capture detailed visuals. They include the visuals rooftops, building façades, grounds, and surrounding site conditions. This will feed into modeling software to create 3D virtual renderings of properties that support more accurate valuations.
Greater Transparency in Process and Models
There will likely be pressure for increased transparency in the commercial appraisal processes as well. Clients will want more visibility into how appraisers develop their models and incorporate different data points. They can also determine final values in order to trust the end results. However, some proprietary model details could remain obscured.
Shifting Roles and Participants
The parties involved in the commercial appraisal process may change. There will be more automated valuations coming from tech providers. However, lenders are still expected to require reports from licensed professional appraisers for large or complex assets. The roles of brokers, estate tax appraisal specialists, analysts, and data scientists may also blur and overlap more over time.
Ongoing Quest for Better Data and Models
Data collection and modeling innovation will remain ongoing quests to enable more accurate commercial valuations. There will be demand for higher quality market data at more granular levels. Training robust models may require vast pools of structured data over long time horizons.