(Estimated reading time: 1 minute 43 seconds)
The article in brief:
- Property inspections have been an important component of commercial real estate valuations.
- Travel to conduct inspections is on hold for the time being because of the coronavirus.
- Technology tools are essential to successfully completing valuation assignments.
Anyone who has ever been house-hunting understands the benefits of actually visiting a property. Somehow, the photos on the website manage to capture that one angle that doesn’t show the parking garage immediately next door. Or a fish-eye lens makes the tiny living room look like a banquet hall. Or the low-resolution image doesn’t quite pick up the clear evidence of water damage in the ceiling. The same holds when members of our real estate practice value a commercial building. Nothing quite measures up to an on-site inspection for recognizing the two main factors that determine value — location and construction.
Due to the current situation with the spread of the novel coronavirus, we are unable to perform these valuable on-site inspections. Various states have announced “stay at home” orders, which is limiting our travel for the time being. However, our team is still able to complete our valuations with the help of some modern tools.
One incredibly helpful tool is right at our fingertips — Google Earth. The quality satellite images and tools from Google Earth and other satellite imaging services are incredibly useful for everything from estimating square footage, to evaluating the neighborhood, to verifying approximate construction dates. And Google’s Street View is the perfect complement.
Technology has also provided us with better access to municipal property assessment records. In addition to many municipalities making these records available online, the quality and details have improved dramatically over the years, including the addition of high-quality images.
These technology tools complement our standard practices of distributing property questionnaires and requesting photos from the current owner to cross-reference our online findings. We also rely on building owners and property managers for maintenance and capital improvement costs to get better insight on building condition and the quality of the maintenance program. All of these inputs and data, when combined with information from comparable property sales, are used to create an accurate mosaic picture of the value of a property that we are comfortable standing behind, without physically setting foot in the building.
No one knows how long the health and economic impacts of the coronavirus will be with us, but what we do know is that modern tools and strong partnerships with building owners and their maintenance teams will allow us to continue to do our jobs and do them well.
For more information about how VRC can meet your financial reporting requirements, including valuations of your real property assets—even from a distance—we invite you to contact the article author Daniel Brunow or any member of the VRC professional team.