A Day in the Life of a Commercial Real Estate Appraiser

Ask almost any commercial real estate appraiser and they’ll tell you: their work is anything but an exercise in box-ticking. After all, hiring someone with the qualifications, licenses, and certifications to determine the market value of properties as different as a data center and a high-rise apartment complex means contracting for the kind of professional services only a highly trained specialist can provide.

In other words, hiring a commercial real estate appraiser means choosing to consult — and often collaborate — with an expert in their field. Regardless of their seniority, the compass of their geographic competence, or the granularity of their property type know-how, all appraisers leverage a unique combination of hard and soft skills.

1) Conducting Property and Market Research

Although reviewing reports created by her Team is Ellen’s primary responsibilities, she leads by thinking and acting like a researcher. “Before I even look for formatting issues, grammatical errors, typos — things like that,” she explains, “I get into the nitty-gritty of the report. I review comps, making sure the analysis is factually correct and that all the formulas add up.”

Ellen adds that almost every project comes with its own research challenges. “More often than not, location is a factor. For example, a multifamily development in a rural community is very different from one near the heart of Fort Worth,” she says. “Sometimes, larger markets have more data to work with, such as more comps and more surrounding similar developments. In newer markets — and there are a lot of those in Texas right now — you need to dig deeper into the database. You also just need to do some detective work.”

Likewise, Mark emphasizes that this research neither begins nor ends with comps. “Data fills in many of the details,” he notes. “But, to complete the picture, you have to have some understanding of how buyers and sellers will behave in the market. That’s where the art of appraising comes in.”

Will, whose area of specialization is right-of-way and eminent domain (ROW/ED), defines the research he does as “trying to be precise with imprecise data.” How so? “There will always be elements in our appraisal that oblige us to rely on assumptions that we’d rather not make otherwise,” he points out. “Maybe we never hear from a property owner whose land is going to be taken for public use. Maybe we never get into see the building on that land. So we will often assume the interior condition is similar to that observed from the exterior.”

That said Ellen, Mark, and Will all believe that LPA is a uniquely collaborative environment in which to conduct research.

2) Inspecting Properties

Appraisers also get hands-on with the properties they value. But a tape measure isn’t the only tool appraisers use to inspect a property. “Inspection requires strong communication skills,” observes Mark. “This is where you have the best opportunity to talk with your property contact and get answers to your questions.”

What kinds of questions? That varies depending on the property type, the market, the client, and their reasons for procuring an appraisal. For that reason, says Ellen, she views inspection as an excellent opportunity to provide mentorship and coaching. “As new employees are training, we visit properties together so they can get comfortable on inspections and see firsthand how to pose the kinds of open-ended questions that make discovery possible,” she says. “As they build their confidence and experience, they can become more independent with the inspection process.”

Mark concurs. “The macro level cannot be neglected. That means asking high-level and open-ended questions like: ‘What makes this property attractive at this price?’ ‘What support did your team receive to arrive at this value?’ ‘How do you see the subject’s lease rates compared the market?’ ‘What’s the state of occupancy, and where do you see vacancy rates headed? What insights lead you to that conclusion?’”

Therefore, appraisers are constantly honing their interviewing skills. “The goal is to accurately capture the mindset and premises on which the parties are working. This helps ensure we are seeing the market as other market participants do,” Mark explains.

3) Creating Reports

Appraisers are writers, and the valuation reports they write typically contain many pages of narrative description, figures, tables, and more. Although each report has to be carefully composed and assembled, it also has to be delivered so that clients have ample time to review all documentation, request clarifications and changes (if needed), and submit everything required to make their closing date.

Moreover, market conditions play a significant role in determining each appraiser’s reporting workload. However, as each of our respondents noted, LPA gives appraisers the wide latitude they need to achieve the firm’s goal of always on-time delivery. “There’s no such thing as a one-size-fits-all project management solution here,” says Will. “It’s not uncommon for something totally out of our control to delay an ROW/ED project. So we’re frequently pivoting, adjusting to shifting timelines, and helping each other assess overall capacity. The worst thing that can happen is that we overpromise and underdeliver.”

Ellen stresses, what matters most is that the final report meets LPA’s uniquely exacting standards. “We adhere to a format that’s very specific to LPA. Because of that, quality control involves much more than copy editing and proofreading,” she details. “Our reports are designed to be both eye-catching and easy to read. We incorporate as many color photos as we can. We want each report to be very cohesive and professional — to stand out from what other firms produce. But we’re most concerned with creating a positive user experience. So quality control usually comes down to making sure each report delivers exactly what the client needs, especially if that involves exceeding their expectations.”

4) Managing Relationships

“Appraisers are much more interactive with their clients than many non-appraisers realize,” says Will. “To deliver the best value to our clients, we have to allow them to get to know who we are and who LPA is.”

Mark’s clients, many of them operators of going concerns in the hospitality space, have different business objectives than Will’s. Yet Mark agrees, observing that raising the bar for client service is a pillar of LPA’s company culture. “At the end of the day, we represent our clients,” he says. “If we do our job right — ask the right questions, take care of the property contacts, pull accurate and relevant data, deliver our report on-time and with a high degree of professional polish — then we’re helping them manage their important business relationships too.”

Ellen affirms Mark’s observation, saying, “‘No revision necessary’ is some of the highest praise we can receive from our clients. That’s when we know we’ve done the best possible job listening to our property contacts and working as a team to deliver an appraisal that can meaningfully inform the client’s decision-making process.”

Will also asserts that maintaining a robust and diverse network is key to an appraiser’s professional growth. “We have an incentive to go to meetings and join organizations both within and outside of the appraisal world,” he says. “Of course, this allows me to make connections with people, like engineers and the agents that manage ROW/ED projects, who may be looking for what LPA can provide.”

As you can see, a day in the life of a commercial real estate appraiser is anything but boring and it takes a high level of expertise to perform at a high level. Having a trusted partner like LPA advising you at every turn, providing in-depth data analysis, and accurate and on-time reporting, is an invaluable advantage our Team provides. To learn more about LPA and how we can serve you visit www.lowerypa.com.