Putting a price on success
Nick Wright, Digital Strategist, looks at how to exit your investments at the right price
Timing the market is no easy feat, particularly when it’s dogged by speculation and disruption. And in a world where investors have direct access to assets spanning the sectors and geographies of their choice, deciphering the real estate landscape is more complex than ever.
AVM has become a vital tool for the banking and investment community
Property bore the brunt of the EU Referendum, with REITs taking a 23% hit on their closing price in the two days following 23 June 2016. Nearly three years on, and widespread industry musings are still struggling to keep track of the real cost of Brexit to commercial property.
Add to this a swathe of macro-economic factors, as well as the volume and complexity of information behind a valuation, and putting a price on real estate can be a difficult ask.
Until now, that is. CBRE’s Automated Valuations Model (AVM) is an automated property valuation solution for landlords and investors. The tool automatically draws on a determined date and reliability index to generate large-scale, fast and cost-effective property and portfolio valuation estimates that give users a clear market advantage.
The pioneering software takes a series of calculations into account to optimise accuracy, from property characteristics to market conditions, extracted from proprietary and public market databases.
AVM then combines these with basic property information - the only manual entry within the process - to inform property purchase and cost optimisation decisions.
AVM has become a vital tool for the banking and investment community, as well as CBRE’s 80,000-strong team of experts. Clients use AVM to drive normative compliance, portfolio analysis, pricing strategies and to evaluate their mortgage and financial operations; while the solution has proven invaluable in informing real estate studies, direct valuations comparisons and geomarketing. They tell us it has transformed the way in which they view real estate.
“Our clients need confidence in the valuations produced to make the best decisions. They want the most comprehensive data possible, the fastest possible delivery and a partner they can trust – CBRE AVM delivers on all counts”
- AVM user, Caxia Bank
AVM: a snapshot
- Portfolio value: Generate valuations for a single or thousands of properties using only basic property information
- Efficiency: Automated results are created in as little as a few seconds per property, with minimal client input
- Reliability: Property data is extracted from a mix of proprietary and public market databases, with results incorporating property characteristics as well as market conditions
- Model calibration: On-going statistical review of real estate models and real transactions compared with AVM results ensure accuracy
- Reporting: AVM automatically reports the value of thousands of properties in a clear summary. AVM uses standarised modules, neutral names, processes and generic algorithms so that insights can be used easily by multiple stakeholders – in and outside of clients’ businesses