JLL joins the growing real estate valuation software movement

In a contract, “time is running out” means you’d better move on, because missing a deadline becomes a default.

While evaluating potential investments, there is usually no contract in question yet. But time is of the essence in today’s market. With so much money available to investors and often relatively few properties on the hunt, those who hesitate find themselves without a deal.

That’s why a growing number of companies have entered the proptech space with bids to bring big data and the kind of artificial intelligence algorithms called machine learning to help accelerate the pace of valuations.

The last entry is from JLL. Its in-house developed valuation tool is called Valorem, apparently from the Latin ad valorem – to or based on value, a legal phrase referring to taxation based on the value of property. The company describes the software as “a unique tool for clients to organize and manage their portfolio, properties and valuation data, providing an automated valuation model” that “uses statistical models, ratings and JLL’s proprietary database to provide estimates of multi-unit real estate market values.” (Probably with other types of properties to come eventually.)

A number of companies have applied machine learning combined with large pools of data to offer rapid assessments. The intention is not to eliminate human evaluation or treat programmatic analysis as definitive, but to give investment teams something to start considering as a starting point.

For example, Riego Systems reviews past loan decisions build predictive systems to determine which ones are unlikely to fall short for possible inclusion in a securitization project. Archer Real Estate Investment Company claims that its AIM automated underwriting can help reduce “the time it takes to first underwrite a multi-family property to less than 15 minutes.” SeeCares, which has an AI-enabled data platform for commercial real estate workflowsExtracts third-party proprietary data to eliminate much of the “tedious work” that analysts and underwriters often do.

JLL also states that Valorem “allows investors to monitor and report market movements in their portfolios for accounting purposes and lenders to quickly assess an underwriting position.”

The tool is outside of JLL’s usual assessment process. The company tells that human and automated appraisals “perform different functions and serve different purposes. Instead of having to wait, our clients can quickly assess the value of properties and then determine if they want to get a full traditional valuation,” the email continues. “We plan to use AVMs to help us with our internal valuation process and to assist appraisers. For example, AVMs might recommend rental comps and pricing. to our reviewers through the traditional process.”