The 5 Skills You Need to Have — and Hone — to Succeed in CRE Valuation
No matter how you choose to measure success, commercial real estate (CRE) has more than rebounded from the initial shock delivered by the pandemic.
- According to the Mortgage Bankers Association (MBA), commercial real estate mortgage loan origination exceeded $890 billion in 2021. That record-setting total represents year-over-year (YOY) growth of 45 percent.
- For 17 straight months (June 2020 through March 2022), Real Capital Analytics (RCA) has reported increases across its Commercial Property Price Indices (CCPI). Moreover, the CCPI is up more than 17 percent so far in 2022.
- The Dodge Construction Network reports that in two of 2021’s top three markets — Dallas and Miami — new commercial and multifamily building starts were up by an average of 55 percent over 2020. And, through Q1 2022, nonresidential building starts are up 26 percent over Q1 2021.
These numbers are good news for brokers, investors, lenders, and landlords, but they may be even better news for appraisers. Demand for CRE valuation services has never been higher, and the need for new talent in the field will only increase over the next 3 to 5 years.
Although career opportunities abound for CRE appraisers, especially those whose geographic competency encompasses the Sunbelt, the profession is not necessarily well-understood, either outside or within our industry. That’s why we invited three LPA Team members to shed some light on what it’s actually like to research, inspect, and produce comprehensive reports about the market value of commercial properties.
Specifically, we’ve asked Brent Elliott (Senior Managing Director, Houston), Anthony Osburn (Director; Dallas), and Nicole Storm (Associate; Lubbock) to talk about the skills that have helped them thrive here at LPA.
According to Nicole, the first lesson of CRE appraisal is that “nothing is boring.” In fact, Nicole’s experience has been one of constantly expanding her comfort zone. “With any commercial property, there’s always more information to gather and analyze than appears on the surface,” she says. “I’ve tried to leverage that fact to grow in my role. My advice to anyone starting out in this field would be to take on every different property type or ‘unusual’ report that comes your way. That’s the best way to learn how to ask the right questions and delve into the complexities that come with certain properties.”
For Brent, staying curious has meant keeping his antennae up. Beyond staying current on broader economic trends, he says, “slowing down to listen” is also essential. “My job is to deliver highly informed opinions about commercial property values. When I listen to as many different stakeholders and consider as many different points of view as I can, I almost always discover additional information I otherwise wouldn’t have been aware of.”
2) Flexibility and Tenacity
Asked to describe his days and the tasks that come with it, Anthony says the keyword is “fluidity.” He adds: “You have to be able to pivot. The path to an appraisal report is anything but linear. With every appraisal, there are so many nuances to examine. Any one of those nuances can be deep, too. You really have to dig to get some data or to extract its optimal value.”
Nicole concurs. “Sometimes, in my preliminary research, I’ll find myself thinking, ‘How in the world will I find any data to support this?’ But I keep searching, combing through the fine details, and collaborating with the other experts in my office. Those reports take a lot of problem-solving, but the good feeling I get when I turn them in on time makes it all worth it.”
Finally, Brent emphasizes that open-mindedness is an underappreciated aspect of resilience. “Occasionally, I have to remind junior appraisers that, although you need to own the hard work that goes into the appraisal, there’s no reason to get your pride wrapped up in it. We are here to provide our professional opinion, so the more facts that you can gather, the better supported your conclusions will be.”
3) Outstanding Time-Management Skills
CRE appraisers live by many commandments, but two items in particular top any list of the profession’s best practices.
- Make your deadlines.
- Always keep your calendar up-to-date. As Brent notes, “We don’t spend all of our time sitting in front of a computer. We spend just as much time in the field, so we need to be smart about the travel choices we make.”
“Hitting due dates is huge in the appraisal profession,” Nicole affirms. “As a goal-oriented worker, I love having due dates and knowing what I need to do within a specific time frame.”
Anthony adds that “from the initial bidding process to sharing our professional opinion with the client, we have just a few weeks to complete our market research, perform property inspections, pull comps, and write and edit our reports. We can’t take any of those steps in the process lightly if we want to deliver our work on time — and our goal is to do that 100 percent of the time.”
4) Excellent Communication Skills
Appraising commercial properties is not just a matter of crunching numbers. It is, as Brent says, “very much a people business.” The most accomplished CRE valuation experts understand that they must expand their expertise into the realm of soft skills. “In this profession, you have to know how to talk to various industry stakeholders,” says Anthony. “You have to know their preferred communication channels and styles. The better communicator you are, the more opportunities you’ll find to advance in your career.”
Nicole agrees. In her experience, “you can be the smartest or most diligent person in the office, but if you can’t communicate with property contacts, brokers, lenders, or your own team, you’re going to find doing your job is much more difficult than it should be.”
Despite having met the profession’s gold standard by earning his MAI Designation from the Appraisal Institute, Brent admits that “communicating the support for my opinions in an effective manner has been the skill I continue to hone and work on every day.”
5) A Love of Learning and a Drive to Grow
For Anthony, Brent, and Nicole, every day they work in appraisal is an education. Based on their comments, they wouldn’t have it any other way.
“Teamwork is one of the Core Values everyone at LPA upholds,” Nicole points out. “And I’ve definitely benefitted from everyone working hard to stay hungry, humble, and smart. Knowing that there are people who expect more of you and are there to help you achieve your goals has provided great motivation for someone like me who’s just starting out in the industry.”
But what about more formal education? According to Anthony and Brent, having the desire and discipline to complete all the credit hours required to add acronyms like AI-GRS, MAI, and SRPA to your business card is only half of the equation. “Those efforts don’t mean much if you don’t work in a culture that values lifelong learning and continuous improvement,” Anthony explains. “With the help of LPA, I’ve been able to become a state-certified appraiser, and I’m currently working toward getting my MAI designation.”
Brent’s experience has been very similar. “During my nine years at LPA, I’ve been able to obtain my state certification and MAI. Now I’m working towards other appraisal designations,” he says. But he also reminds us that securing these designations is not an end in itself. “They give me additional tools to perform my job at a higher level. The better I do my job, the more marketable skills I develop, and the more value I create for our clients.”
Building a Career in CRE Valuation
The appraisal profession is full of opportunities for young professionals, provided they have matching interests and aptitudes. However, the best opportunities to be seized are in those work environments where ethics are not only preached but also practiced.
At LPA, we invest in a principle-driven culture and the people who bring it to life. We strongly support the development of all the traits CRE valuation professionals need to succeed. Powered by dynamic professionals like Anthony, Brent, and Nicole, we’ve experienced exponential growth in the 12 years since our founding. In the last four years alone, our organization has almost tripled in size, extending our service area beyond Dallas, Houston, and San Antonio by opening new offices in Corpus Christi, Fort Worth, Lubbock, and El Paso.