First American Professional Real Estate Services Releases Automated Value Model For Commercial Properties
Press release excerpt:
First American Professional Real Estate Services, Inc., a leading provider of real estate transaction-based products and services through its Evaluations group, announced today the release of the Indexed Value Report (IVR), an automated valuation model (AVM) for commercial properties.
Used in portfolio management, loan extensions and new originations by commercial lenders and others, the new IVR model incorporates current commercial property sales data from assessors’ offices, covering more than 3,200 counties in the United States.
In an independent reliability test conducted by three professors from Minnesota’s St. Cloud University on 19,000 commercial properties sold within the last year, the IVR estimated that values for these commercial property sales across the U.S. represented an average of 87 percent of the purchase price and a median value of 103 percent of the purchase price. This is considered to represent reliable indications of value from an AVM. Additional information about the new IVR can be found by visiting www.firstamces.com .
My comment: Over the past 20 years, every so often I heard about one of these. None of them were successfully implemented and sold. Of course, the problem, as with residential AVMs, is data. Costar was rumored to be looking at one some time ago. I can’t imagine using assessor’s office information that is publicly available for a commercial AVM. Income and expenses are critical to determining values for many commercial properties.
Click here for the full press release:
Click here for more detail on the product and a link to a sample report