Commercial real estate appraisers: At the center of the CRETech revolution - by Joe Egan

Joe Egan, Joseph P. Egan & Associates

Although arriving to the launch party late, innovative technology is changing the commercial real estate sector through a field of wide reaching and fascinating technological advancements. In what is now known as CRETech or PropTech, a Twitter search will provide the latest buzz on where things are heading.

In a broad sense, CRETech encompasses an array of software-as-a-service (SaaS) offerings, cloud based platforms and mobile apps aimed at lowering risk or improving efficiency in just about any commercial real estate related process. While primarily management oriented within traditional areas such as transactions, property and portfolio administration, CRM, site selection, etc. CRETech also includes finely tuned listing platforms. Data aggregators such as CoStar Group and CompStak are now digital industry standards. A host of self-proclaimed disruptors are also developing some highly innovative next generation solutions such as algorithms performing predictive analytics, spectacular mapping tools, and onsite data collection systems incorporating tracking devices.   

The future possibilities and benefits of CRETech are amazing. For example, the management team behind a multi-tenant office building can now readily monitor energy usage, copiously track tenants and prospects, securely disseminate digital property information, and develop real-time dashboards visualizing property performance. Investors seeking acquisition opportunities now have access to platforms supporting deal prospecting and due diligence. Powerful online site selection tools and leasing platforms are available to tenants as well.      

The evolving collage of digital services for the commercial real estate sector is now attracting serious attention from venture capitalists. The roster of incubators, accelerators, and symposiums devoted to CRETech demonstrate the expanse of this opportunity. Recent investments in digital initiatives by JLL, CBRE reflect the narrowing gap between early adoption and widespread acceptance.

Naturally, as a CRETech observer and commercial real estate appraiser positioned along the market data food chain, the role of a commercial real estate appraiser within the CRETech revolution is a timely point to consider. Based on what is known so far and my experience in working with data, this is what I have concluded:

• Given the nature of the market data we develop, the diverse range of questions we ask, the array of industry professionals in which we interact, and the type of property operating information typically requested (preferably in digital form), commercial real estate appraisers are well positioned at the center of this robust CRETech transformation.

• Increased availability of reliable datasets and analyses will offer appraisers many benefits. Beyond informing us, they will enlighten our perspective and foster a deeper understanding of the subject property and its market. 

• New metrics and performance benchmarks will become part of the body of knowledge. However, enhanced data vetting skills will be required as entirely new datasets and analytics are introduced. The market will also demand greater proficiency in analyzing, interpreting and presenting this data.

• This increasingly data-driven business will encourage involvement with data visualization, statistical analysis, data blending, geospatial intelligence and other emerging areas. In turn, the potential to attract a new base of analytical and perhaps younger career-minded professionals to the appraisal profession will significantly improve.

There’s little doubt we have put down stakes in this data-driven commercial real estate frontier with no turning back. And as we have seen in the medical and other sectors generating volumes of data points, the adoption of digital technology is an unyielding force and game changer. For commercial real estate appraisers the CRETech revolution is an excellent opportunity to stay squarely in the game mainly because of our skills in vetting, interpreting and reconciling data from a multitude of sources.

Joe Egan is owner of Joseph P. Egan & Associates, Falmouth, Mass.