What is Valuation Management for Real Estate Funds?

The engagement and review of commercial real estate valuations across Europe and APAC has historically been conducted by internal client teams, typically fund/portfolio and asset managers. However, commercial real estate valuations are often not the internal client teams’ primary role or specialty, rather, they are often more focused on operations and asset management to maximise performance.  

SitusAMC’s dedicated MRICS/RICS Registered Valuers have been supporting clients with real estate valuation management for over 20 years, creating a layer of independence in the financial reporting process. Here are some of things we have learnt from our deep partnerships with some of the most recognised commercial real estate lenders and investors. 

The Valuation Manager is an extension of the client’s team, focused on: 

• Subject matter expertise for all aspects of the valuation lifecycle, including providing market updates and knowledge of current industry issues. 

• Partnering in establishing and administering the client’s valuation policy. 

• Establishing consistency in valuation processes, methodologies and timetables. 

• Ensuring engagement with all stakeholders, including fund/portfolio/asset managers. 

• Preparing and running request for proposals for engaging valuers. 

• Drafting valuer engagement letters and supporting the relationship with external valuers. 

• Valuation review – The scope will depend upon the requirements of the client and typically includes review of the key valuation assumptions, comparables, calculations and conclusion. 

• Providing the single source of truth for valuation information. 

• Assisting with audit queries. 

• Supporting the client with data integrity, aggregation and reporting requirements. 

The Valuation Manager creates tangible value for the client’s business by: 

• Demonstrating robust valuation procedures to ensure independence and investor confidence. 

• Freeing up internal resources to focus on core functions. 

• Ensuring valuation specialists with knowledge of current RICS and industry issues, are involved in the process. 

• Assisting with managing multiple valuer relationships, including rotation policies and conflicts of interest. The valuation manager can ensure consistency in approach and knowledge transfer through the rotation process and client reporting. 

• Supporting data accuracy in the valuation process and its integration with other business requirements such as data aggregation, analytics and reporting. 

But not all Valuation Managers are created equal. Clients should prioritize the following when appointing a Valuation Manager: 

• Proven Experience – Such as RICS Registered Valuers, who are focused on valuations and have exposure to a large pool of valuations. 

• Deep Client Focus - A partner who views themselves as an extension of the client’s team and can adapt to meet client specific requirements. 

• Structured Approach - Understands and works with the various stakeholders in the valuation process, supporting fund/portfolio/asset managers, accounting teams, valuers, auditors, legal, reporting and analytics teams. 

• Value-led Technology – Has technology solutions that support (and not dictate) the client’s requirements. 

SitusAMC is the premier independent provider of comprehensive commercial real estate and debt valuation solutions, providing data-driven intelligence to support reporting needs and fuel more informed decision making. In 2022, SitusAMC evaluated more than $2T in CRE assets including 21,000 reviews and appraisals completed. Our services are powered by our proprietary technology VMS (Valuation Management System), a cloud-based, end-to-end valuation management system, that streamlines the valuation process and making critical information and data accessible to key participants.  

Please contact Jonathan Kendrick (jonathankendrick@situsamc.com), SitusAMC’s Head of Real Estate Valuation Services Europe & APAC, for more information on how we are supporting clients with valuation management. 

To learn more about SitusAMC’s European CRE Solutions including Commercial Real Estate Valuations, click  here.