How data is reshaping commercial property valuations

Banks are reassessing how they value commercial properties, with lenders now implementing ways to dramatically reduce the time it takes to approve financing while maintaining rigorous risk management standards.

This transformation is focusing on the largest portion of a bank's loan book: offices, retail and industrial properties valued under $20 million, where loan-to-value ratios are typically 50-70% (compared to 30% for institutional portfolios). The impact is set to be significant: valuation turnaround times potentially dropping from 15 days to just five hours in certain circumstances. In competitive lending markets, faster approval processes – what the industry calls ‘time to yes’ – directly influence customer retention and acquisition.

"In the same way we've seen the residential sector transform with AI and machine learning, technology is delivering speed and accuracy in a space that is going to scale very quickly. Technology, regulatory acceptance and the commercial case are aligning to allow banks to operate with continuous insight across their assets," says David Torrens, head of commercial valuations – Australia, JLL, a specialist in the 'middle markets' property category.

A major catalyst for this shift is the quality and availability of property data. Banks hold extensive information about properties they've financed for years: tenant histories, cash flows, yields, market movements. The challenge has been that this data has gaps and inconsistencies that limit its usefulness for rapid valuation decisions.

This is where JLL technology and proprietary data are making a material difference. JLL's AI-powered Datasense platform enriches lenders’ property portfolios by verifying, correcting and supplementing missing information such as incomplete addresses, building measurements, zoning and geospatial and asset type classifications. The platform efficiently processes entire loan portfolios saving significant time and cost. For a lender with thousands of commercial properties nationally, this JLL technology transforms fragmented, unstructured and incomplete property data, creating a robust foundation for faster, data-informed valuation decisions.

Middle market properties, often owner-occupied or single-tenanted, are relatively straightforward assets. When banks already possess extensive historical data about these properties, traditional comprehensive reports may not always be necessary.

"The middle markets is one of the most significant and operationally intensive parts of a lender's book. Traditional valuation processes are least efficient here, certainly unsustainable for the speed modern lending demands," Torrens says.

With robust data available, valuers can make quicker, more informed decisions. JLL's point of difference lies in having AI-powered tools that capture and maintain extensive property data, enriched by multiple data feeds and risk analytics. This enables faster decisions that help lenders accelerate their valuation turnaround times.

However, technology is an enabler, not a replacement. Professional valuers remain central to the process, providing critical judgement, market interpretation and oversight that AI cannot replicate. 

“The technology handles data enrichment and pattern recognition, but valuers apply professional expertise to contextualise information, assess complex factors and ensure accuracy. This combination of AI-powered efficiency and professional oversight is what makes the prevailing approach both faster and more robust," Torrens adds.

Detailed valuation reports have historically provided institutional protection when lending decisions face scrutiny. But to mitigate risk while improving speed, leading banks are exploring tiered frameworks that deploy resources proportional to need and risk:

Continuous monitoring: Market data, comparable transactions and professional analysis provide ongoing portfolio visibility. Changes are identified as they happen, not months later during scheduled reviews.

Enhanced desktop valuations: When monitoring flags something such as tenant movement, market shifts or new comparables, targeted assessment can happen in hours rather than weeks, drawing on robust data already held.

Comprehensive inspections: When situations warrant it (properties with significant risk indicators, complex assets or material changes), full physical inspection and detailed documentation occurs.

This approach provides near real-time visibility into portfolio exposure. As market indicators change, lenders can see which assets are affected, prioritise where deeper analysis is needed and make decisions based on current information rather than ageing data.

Matthew Singleton, head of lending & advisory at JLL, predicts that over the next three to five years, lender platforms will increasingly connect with valuation intelligence in real-time rather than through discrete report delivery.

Comprehensive reports will still be required for complex assets, disputed values, litigation support and significant transactions. But where there is significant volume, well-documented assets and substantial existing data (such as in the middle markets), evolution is likely.

"We'll see valuation become operational infrastructure, not something for periodic input – an evolution being driven by the availability of rich, robust data that enables faster decision-making without compromising on rigour. For lenders, this means dramatically improved approval times, better customer experience, cost effectiveness, and risk management that's both faster and more responsive to market conditions," Singleton says.

JLL's middle markets commercial valuation team is working with lenders to develop enhanced valuation approaches that leverage AI-enriched data for faster, more informed decision-making. For more information, get in touch here.