How Tech Could Reshape Commercial Valuation

• Appealing appraisals: Technology is helping speed up one of the slowest parts of any commercial real estate transaction.

• Built different: Will the backlash against big builders stall housing development when it’s needed most?

• Conversion calculus: Falling office prices and rising housing demand are finally making office-to-residential conversions financially feasible.

• Multifamily webinar: Centralization is helping apartment owners cut costs, reduce risks, and improve resident experiences. Sign up

Persepctives

How Tech Could Reshape Commercial Valuation

For years, commercial real estate deals have often hit the same snag: waiting on appraisals. Financing, underwriting, and negotiations could all be ready to move, yet the transaction sat idle while property valuations crawled through outdated, manual processes. In an industry where timing directly affects profits and competition is fierce, that delay is becoming unacceptable. Appraisals are evolving from routine paperwork into a core element of deal strategy, where speed, accuracy, and data transparency drive real competitive advantage.

New technology is finally cracking open this long-stagnant part of the CRE ecosystem. A new generation of appraisal firms is proving that precision doesn’t have to come at the cost of efficiency. Standardized digital templates, automated data gathering, and integrated analytics tools are compressing weeks of work into days, giving lenders and investors faster clarity on asset values. The result is a process that’s not just quicker but also more transparent and consistent—helping everyone involved make more informed, confident decisions in less time.

This shift comes at a crucial moment. Capital is constrained, interest rates remain high, and liquidity is hard-won. Every delay now carries opportunity cost. By rethinking how valuations fit into the broader deal timeline—and by embracing technology that enhances both accuracy and speed—brokers, lenders, and owners can turn what was once a bottleneck into a differentiator. The appraisal process is no longer a formality; it’s becoming an instrument of strategy, setting the pace for how modern real estate deals get done.

Overheard

Pulte’s Warning Adds Fuel to Homebuilder Pressure

Homebuilders are facing a new threat—and it’s coming from within their own ranks. Bill Pulte, the FHFA Director and heir to PulteGroup’s founding family, criticized major homebuilders like D.R. Horton, Lennar, and Toll Brothers for controlling about 55% of all new homes built in the U.S., arguing that their dominance has hurt affordability and innovation. His comments, echoed by President Trump, have sparked a selloff in homebuilder stocks, with the S&P Homebuilders Index down 9% this week. For an industry already squeezed by rising material, labor, and financing costs, political backlash and sliding stock prices could make new development even harder to finance.

That’s a dangerous cycle. As builder valuations slip, raising equity becomes harder, borrowing terms worsen, and investor patience wears thin. For companies already fighting margin compression, this sort of public admonishment can amplify volatility, discourage risk capital, and slow down new starts. In effect, the critique could act like an indirect tightening of financial conditions for builders.

If stock markets view Pulte’s comments as a signal that regulators may tilt against overexpansion or speculative building, capital might retreat from marginal or riskier housing projects. The result: fewer starts, more conservatism, and perhaps a further widening between strong housing markets and weaker ones. In an environment where every lever matters, negative sentiment from leadership may be a harder headwind than any cost spike.

The New Economics Making Office to Housing Conversions Viable

The U.S. office market is undergoing a deep structural reset. Vacancy rates are at multi-decade highs as pre-pandemic leases roll off, leaving entire downtown blocks underused. Yet amid this stagnation, one niche is gaining momentum: office-to-residential conversions. What was once an outlier idea—too costly and complicated—is now emerging as a pragmatic response to a housing shortage colliding with a surplus of obsolete office space. Falling office valuations, steady apartment demand, and more flexible city policies are creating the right conditions for this transformation.

Success increasingly depends on creative deal structures rather than bargain-basement prices. Some of the most notable conversions have come from owners who partnered with lenders and developers to share equity and risk. At 160 Water Street, Vanbarton Group restructured financing with Brookfield and Mack Real Estate to turn its office tower into 588 apartments, while GFP Real Estate and Metro Loft transformed 25 Water Street through a similar cooperative approach. These collaborations, supported by local incentives and federal funding, are proving that conversions can work even without distressed sales—especially when financial stakeholders align early.

Momentum is building as market fundamentals and policy incentives converge. Construction costs have stabilized, interest rates appear to have peaked, and the rent gap between apartments and offices is the widest in decades. Cities from New York to San Francisco are revising zoning to encourage adaptive reuse, and Washington has earmarked billions to support such projects. Conversions won’t rescue every building or fix every imbalance, but the math is starting to work again. For owners willing to adapt, transforming empty towers into housing is shifting from a last-ditch effort to a strategic evolution—and perhaps the clearest path forward for an overbuilt office market.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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