JLL Joins the Growing Property Valuation Software Movement

In a contract, “time is of the essence” means you’d better get a move on because failure to meet a deadline becomes a breach.

While valuing potential investments, there’s not usually a contract in question yet. But time remains of the essence in today’s market. With so much money available to investors and, often, relatively few properties in the chase, those who hesitate are left without a deal.

This is why a growing number of companies have entered the proptech space with offerings to bring big data and the type of artificial intelligence algorithms called machine learning to help quicken the pace of valuations.

The latest entry comes from JLL. Its in-house developed valuation tool is called Valorem, apparently from the Latin ad valorem—to or based on the value, a legal phrase referring to being taxed based on property value. The company describes the software as “a single tool for clients to organize and manage their portfolio, property and valuation data, providing an automated valuation model” that “uses statistical models, valuations and JLL’s proprietary database to provide estimates of multi-housing property market values.” (Doubtless with other property types to eventually come.)

A number of companies have been applying machine learning combined with significant pools of data to offer quick valuations. The intent is not to eliminate human valuation or to treat programmatic analysis as definitive, but to give investment teams something to begin considering as a starting point.

For example, Riego Systems looks at past loan decisions to build predictive systems to determine which are unlikely to default for potential inclusion in a securitization project. Real estate investment firm Archer says its AIM Automated Underwriting can help reduce “the time needed for a first underwriting of a multifamily property to less than 15 minutes.” SeeCares, which has an AI-enabled data platform for commercial real estate workflows, pulls in third-party property data to eliminate much of the “grunt work” that analysts and underwriters often do.

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

The tool sits outside of JLL’s usual valuation process. The company tells GlobeSt.com that human and machine valuations “perform different functions and have different objectives. Instead of having to wait, our clients can quickly assess the value of properties and then determine if they would like to get a full traditional appraisal,” the email continued. “We do plan on using AVMs to help with our internal valuation process and assisting the valuers.  For example, AVMs could recommend comps and rental prices to our valuers as part of the traditional process.”