Employees of InsideValuation Partners LLC are more likely to work on folding tables than desks as the fast-growing company scrambles to keep up with explosive growth.
Revenues at the Reno company have doubled since July, and tripled within the last year. InsideValuation probably will add another five people to its home office staff of 15 within the next few weeks, says Chief Executive Officer Barry Bates.
The staff hasn't had much time to settle into InsideValuation's new offices in northwest Reno as it handles a tidal wave of requests to estimate the market value of commercial, industrial and investment properties across the nation for banks and investors.
The company specializes in properties valued at no more than $10 million or so, and it's developed a reputation for determining the value of oddball properties such as rock quarries.
InsideValuation contracts with nearly 10,000 real estate brokers and agents in individual markets who take a look at properties and use their local experience to develop an estimate of the price that a property might sell for.
The company, meanwhile, also provides its customers with an analysis that evaluates key economic and demographic data linked to approximately 43,000 Zip codes to measure the level of risk associated with economic and demographic variables.
The finished report, known as a "broker price opinion," is less time-consuming and less expensive than a full-blown real estate appraisal. But it's often good enough for customers such as investors who are conducting their due-diligence before they purchase a package of commercial real estate loans.
The collapse of financial institutions that loaned heavily on commercial real estate projects drives much of InsideValuation's current growth.
Employees were busy early this fall, Bates says, overseeing valuation reports on thousands of properties involved in loans taken over the Federal Deposit Insurance Corp. from failed banks.
Some of the properties presented big headaches to real estate brokers associated with InsideValuation. Just finding the location of an abandoned subdivision can be challenging, Bates says, and estimating the value of a partially completed project in a fast-changing market can be treacherous.
The reports completed by valuators in the field are reviewed by employees in the Reno home office and sent along to the customers who ordered the broker price opinions.
The niche filled by the company nestled between the computer-generated appraisals used by some residential mortgage companies and the expensive, detailed professional appraisals ordered by lenders on big projects has drawn interest from big competitors as well.
Bates says InsideValuation relies on old-fashioned values to keep its competitive position. "We really shine in customer service, in providing lots of tender, loving care," he says.
Adds Faith Murphy, vice president and sales director, "We've worked very hard at perfecting the technology, refining our independent analysis of each report and report and honing our customer service. Our clients appreciate the substantial amount of information contained within the reports and their ease of use."
Even as InsideValuation ramps up quickly to deal with the flood of requests for price opinions on commercial real estate, Bates is aware that the boom will end someday.
"This is not going to last forever," he says. "We're probably looking at 2011, 2012 when this windfall runs out."
The company sees opportunity in providing broker price opinions to originators of residential mortgages as home sales recover.
The challenge: The residential lending business these days is dominated by loans insured by the Federal Housing Administration and the Veterans Administration, and it's difficult for a smallish valuation company to break in with the federal agencies.
Bates had spent 35 years in the mortgage industry before forming InsideValuation in 2006.
He previously worked as a vice president with Truckee-based ClearCapital and held management positions in property valuation and appraisal with Morgan Stanley Mortgage Capital, Countrywide Securities, The Money Store, Ameriquest Mortgage Company and Wells Fargo, where he established the bank's first totally electronic residential appraisal department.
