Bowery Valuation's commercial real estate appraisal platform

Plans call for a continued expansion and a new fund raise by next year

Bowery Valuation's commercial real estate appraisal platform

After an initial pause when the COVID-19 pandemic first hit, Bowery Valuation is plowing ahead with plans to go national.

The tech-enabled commercial real estate appraisal firm launched its initial business in New York City in summer 2017, growing to the Washington, DC market two years later. A growth pause during the early stages of the coronavirus pandemic came soon after.

“We decided to put the brakes on a major national expansion when COVID first hit, to see how that played out and then kept focusing on the clients we’re working with and the markets that we had,” recalled John Meadows, Bowery’s co-CEO and co-founder.

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The pause didn’t last long. Growth continued in 2020 and even accelerated through 2021, propelled further by the New York-based company’s $35 million Series B funding raise in June 2021.

Two Bowery clients – Goldman Sachs and Capital One – even joined on as investors. Since then, Bowery Valuation added offices in Pennsylvania, New Jersey, South Florida, Austin, Dallas, San Francisco, Seattle and is launching in Los Angeles in April. The company now employs 250 people, with plans to hire more.

“Over the next two to three years, the focus is that national expansion and scaling our platform to really support those [efforts],” Meadows said.

Along those lines, Bowery envisions raising a Series C venture capital round, either later in 2022 or sometime in 2023, Meadows said.

All about workflow

Meadows describes Bowery Valuation as being a “fully vertically-integrated appraisal firm” that uses a proprietary platform internally so its appraisers can produce real estate reports more efficiently, quicker and with higher quality. The platform includes public record integration, exhaustive databasing and a related mobile inspection app that relies on machine learning.

The company straddles the line between fintech, which focuses on technology for the finance and banking industries, and proptech, which refers to technology used in real estate.

Bowery is really “playing within the world of commercial real estate, but working directly with banks,” Meadows explained.

The goal with Bowery’s tech-fueled appraisal process is to make the end of the commercial real estate loan process more efficient and quicker.

“At the end of a commercial real estate loan process [clients] have to get a real estate appraisal from a third party to basically validate that the value that the lender is lending on is accurate, and that’s where we come in,” Meadows said.

The thing is, appraisals as they have traditionally operated can gum up the process. Meadows asserts that Bowery’s approach counters this, addressing potential bottlenecks with better reports and more efficient turnaround times for lending clients, letting borrowers gain access to capital in a more efficient way.

“[Historically] the process… of how appraisals have been created [uses] old appraisal templates.  A [Microsoft] Excel sheet to a Word document – that same technology has existed in our space, really since Word and Excel came out over 30 years ago,” Meadows said.

“We’ve seen no major innovation. So our goal is to create a technology platform… to create reports that are higher quality, [with] higher data accuracy and turn around faster.”

The platform

Bowery’s appraisers use the company’s web- and cloud-based platform at their desks to govern workflow. According to Meadows, it breaks down every step of the appraisal process, enabling the saving of data written by any appraisers within each of Bowery’s office and makes it available to future appraisers moving forward.

“The best data that we can collect is verified data from a property owner,” Meadows said. “It is very accurate data, where a lot of it in our industry is coming from third party sources.”

Meadows described the platform as a TurboTax for appraisers in the sense that it eliminates the busy work for appraisers conducting their analyses.

“The analysis and complexity of that analysis is still done by the appraiser selecting the right comparables determining the accurate value,” Meadows said. “The biggest step changes [are] we’re creating reports from scratch.”

Those reports also contain consistent language across Bowery’s appraisals, and the company surfaces all the data that comes through on reports appraisers write.

Read next: Appraisal options improving under COVID-19

As a result, “there’s higher data accuracy [so] that you’re actually selecting the best comparables, which is really a core basis of how we determine the value of that property and defend it,” Meadows said.

Typically, appraisals can be done within 10 days to two weeks, versus an industry norm of about three to four weeks, he added.

“Our goal is to reduce the time it takes from engagement on our board to end delivery to that client, and then also the time it takes for that client to ingest that report and finalize it,” Meadows said.

“For us, it is a focus on both the speed and the quality, where we get into the hands of our clients faster, but also delivery of a higher quality appraisal, so they can finalize that report and close out their loan.”

Bowery’s founding team is a trio. Meadows is a co-founder along with co-CEO Noah Isaacs and CTO Cesar Devers.