Preparation of commercial real estate valuations requires a lot of time and resources from the valuer. This causes real estate investors and other parties ordering these valuations need to wait long time until they get the valuation results and require the parties also to pay a high price for each valuation. Valuation process is slow and expensive. The process requires the valuer to collect source data from the investor (via Excel, pdf, email), transfer that data to Excel financial valuation models, collect market data evidence, transfer that to valuation models, visit buildings, modify valuation model assumptions based on observations, and finally compile valuation reports (pdf, Excel) and send the reports to investor.
Most important analytical work by valuer is to set appropriate assumptions to financial valuation models. Mistake in these assumptions can make valuer’s market value estimate of the real estate asset being far from reality. It is essential that valuer has all possible high-quality data available when determining the assumption values. In real estate markets, most high-quality data, like current rent amounts, building vacancy levels or transaction cap rates are not publicly available but instead stored within real estate companies’ private databases. This data unavailability-problem adds lot of costs to valuer and makes real estate valuation confidence levels low.
Exquance Software Oy offers a game changing solution: Software platform with a unique valuation and financial modeling calculation engine with breakthrough innovative Exquance Automated Valuation Model (XQ AVM) component as well as a new ecosystem for real estate investors and valuers.
The new ecosystem speeds up the valuation process by allowing investors to deliver source data automatically to valuer’s valuation platform. Source valuation data delivery becomes 95% faster than currently. Same ecosystem allows valuers to deliver valuation results in a digital and interactive format back to investor. Valuation results in digital format has not been previously possible. Only pdf and Excel-reports have been traditionally delivered over email but investors desire results digitally these days.
XQ AVM-component fixes the data unavailability problem by bringing big real estate data market queries available to valuers and other market participants. XQ AVM fills valuation model assumptions automatically by querying big real estate market data. XQ AVM executes with pure computer power and makes automated valuation modeling of commercial real estate possible. XQ AVM taps high-quality real estate data sources that no valuer currently can access with the same scale. This part of the innovation saves 95% time from market data collection part of valuation process. Human valuer can further enhance the valuation manually. Accuracy and confidence levels of the estimated market values is increased.
The first phase solution is targeted to professional real estate players in the €8,000M estate investment industry software market. The solution is scalable to all real estate investment markets globally. The business model is SaaS, including monthly service subscription fees and transaction-based fees per purchased market datasets. The ecosystem of investors and valuers has network effects – new users in this ecosystem contribute more high-quality real estate data to the ecosystem, benefiting all existing users and making the whole ecosystem more valuable.
Exquance Software Oy develops innovative solutions for commercial property valuation and investment management aiming to be the leading vendor of industrial financial modelling and AVM solutions in the EU and Asia. Dedicated team of 20 professionals in software development, business management and sales with an in-depth understanding of real estate investment industry and technology. The company has realised over €1M revenue to date and €900k equity investments. Company has strong client base; 23 effective client agreements with major industry players and 300 clients have expressed their interest in the XQ AVM innovation.
The impacts will be reaching 10 000 clients and creating €40M revenue and 400 jobs by 2025.
