CRE valuation has outgrown traditional processes: Is it time for a new approach?

As commercial real estate (CRE) portfolios expand in size and complexity, the industry faces a growing challenge: fragmented valuation processes that create risk and erode investor confidence. The traditional compliance-driven valuation model no longer suffices. Today, investors and owners demand operational rigor, real-time (defensible) performance insights, and strategic foresight.

Fragmented valuation processes create real risk

Recent market disruptions have laid bare the vulnerabilities of outdated valuation methods. A series of major disruptions have underscored the urgent need for more connected, agile workflows:

• Post-pandemic rent volatility: Required near-daily valuation insights replacing the traditional quarterly cycles, demanding rapid adaptation to maintain investment relevance.

• Post-rate-hike transaction data drought: Left firms without usual market comparables, forcing reliance on internal operational data for valuations.

• Rapidly evolving US tariff policy: Destabilized industrial and retail fundamentals within days of policy announcements, exposed the inadequacy of traditional valuation cycles, and elevated the need for connected, always-on performance monitoring.

“These disruptions shocked the industry and clearly exposed how fragmented valuation processes create inefficiencies and introduce risk, ultimately eroding investor trust,” explains Jorge Paredes, Senior Director, Valuation Advisory at Altus Group. “Post-COVID and after the interest rate hikes, the speed at which financial modeling needed to be updated went from quarterly to near daily. Without connected systems, the industry was left scrambling to keep pace, which is not sustainable.”

With market shocks becoming more frequent, CRE firms increasingly recognize that outdated, fragmented workflows are no longer viable.

“Disparate systems and data silos complicate timely valuation and reduce transparency, heightening risk exposure,” adds Meredith Brake, VP of Service Operations at Altus Group. “Clients face an overwhelming amount of models and data. Our platform equips them to cut through the noise and focus on the right valuation story.”

From compliance to strategic valuation management

Historically, firms engaged Valuation Advisory Services (VAS) primarily to satisfy regulatory compliance. Today, compliance alone is insufficient.

“Closed-end funds — previously a very small subset of the funds being serviced by Altus Valuation Advisory team – are now about 15% of the overall funds we manage in-house for our clients. Unlike open-end funds, these clients don’t seek valuation services because of compliance mandates. They come to us for operational rigor and strategic insight, reflecting a fundamental change in client expectations,” explains Shree Guha, Senior Director, Commercial Strategy & Operations at Altus Group.

Moreover, newer entrants, funds, and publicly traded REITs, including those at the forefront of data center investment, are turning to Altus VAS to establish valuation frameworks from the ground up. This includes setting cadence, reporting standards, and operational oversight — services representing a deeper advisory relationship than traditional compliance management.

Clients have long recognized valuations as a strategic KPI, but the disruptions of recent years have accelerated the expectation for how frequently and with what granularity that insight needs to be delivered. “Clients are looking for analytics that help shape proactive investment strategies,” notes Shubhra Srivastava, VP, Product Management at Altus Group.

The Altus advantage: Integrated advisory and institutional-grade software

Your valuation program demands more than advisory services or software alone – it requires these three things working together: expert oversight, purpose-built workflow technology, and the valuation engine institutional investors already run on. That’s the Altus difference, delivered across three layers:

• Governance: Your valuations are overseen by an independent Altus advisory team that sits between your internal stakeholders and your external appraisers, actively managing that process so the outputs you rely on are consistent, transparent, and defensible

• Infrastructure: Your most complex valuation models run on the ARGUS platform, the modeling framework institutional investors already recognize and trust, so your outputs carry credibility where it matters most

• Intelligence: Your assumptions and benchmarks are grounded in one of the most comprehensive valuation datasets in the US, giving you a reliable read on true market behavior instead of guesswork

Altus Group - The complete solution

“By the time our clients benefit from a new capability, it has already been proven in practice, not just tested in a lab,” says Guha. The Altus VAS team manages thousands of valuations per quarter on the same ARGUS platform and workflows that clients use. They continuously build and refine from the inside out. Every enhancement is stress-tested against real valuation work, creating a feedback loop no pure-play technology or pure-play expert services organization can replicate.

Two recent ARGUS Intelligence capabilities illustrate this:

• Benchmarking: Draws on a nationwide dataset of tens of thousands of properties, each built on a full DCF model. That foundation gives the aggregated data a level of granularity that cruder market datasets can't match, so when a portfolio team benchmarks assets or conducts performance attribution, every comparison is grounded in real valuation discipline.

• Summary of Assumptions: Automatically surfaces every assumption embedded in an asset valuation model in one place. No more manually hunting models to understand how an asset is being valued; portfolio teams get instant clarity whenever they need it.

Both features were first deployed and refined through our own advisory work. What clients receive is not a promising new capability; it’s one that has already earned its place.

Paredes adds, “We’re evolving from fragmented workflows to connected, streamlined operations, automating much of the manual work previously done through spreadsheets. This frees our clients to focus on interpretation, analysis, and strategic decision-making.”

Meeting the needs of a changing client base

The expanding demand for valuation advisory reflects broader changes in the CRE marketplace. As portfolios grow, firms confront increased investor scrutiny and complexity. This amplifies the challenge of maintaining confidence in valuations while ensuring timely, accurate reporting and decision support.

“In many cases, decision windows are shorter than ever,” Guha stresses. “If firms miss the mark on getting the right data quickly, they risk making suboptimal capital decisions or losing competitive positioning.”

Client needs now extend beyond compliance to operational risk management, investor reporting, and initial valuation setups for newer funds. The growing closed-end fund base and new fund launches backed by Altus VAS underscore this momentum and highlight trust in Altus VAS to future-proof their strategies.

Take the conversation further at Altus Connect

Knowing where your process breaks down is one thing. Building a path forward is another. At Altus Connect, we’re offering a dedicated series of consultations — focused 1:1 and small-group sessions where you sit down directly with a bench of our expert advisors. This gives you the unique opportunity to collaborate with experienced professionals across valuation advisory, technology integration, risk management, and strategic portfolio consulting.

These are structured, pre-booked conversations – not presentations or demos. Each 30-45 minute session is designed to focus sharply on the challenges most relevant to your portfolio or fund, wherever you are today and wherever you need to go. Valuation Advisory consultation options include:

• Public REITs – Valuation as Enterprise Infrastructure: Stronger investor confidence, defensibility versus private competitors, and valuation infrastructure that supports growth without introducing operational risk.

• Mid-Market Managers – Moving from Ad Hoc to Institutional: Improved consistency and governance, greater audit and LP confidence, and a valuation process that evolves alongside the firm’s growth.

• New Fund Creation – Designing Valuation Before It Becomes a Problem: Smoother audits, stronger LP trust, faster onboarding of assets, and a valuation framework that supports the full fund lifecycle.

• Alternative CRE Funds – Valuation Where Judgment Matters Most: Stronger defensibility for complex assets, improved LP and auditor confidence, and a valuation process that supports innovation without increasing risk.

• Debt Funds – Valuation as a Credit Risk Control: Stronger risk monitoring, improved covenant visibility, greater investor confidence, and a valuation process that scales with the debt portfolio without increasing operational risk.

Not seeing your situation reflected here? Every consultation can also be booked as an open-topic session. Tell us what’s on your agenda, and we’ll match you with the right experts before you arrive.

Spots are limited and allocated on a first-come, first-served basis. Book your consultation at Altus Connect.

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