SecondStreetIndex.com is an Internet-based company that provides services for the commercial real estate industry:
- indexes of price trends in the four major commercial sectors (apartment, retail, office, and industrial)
- automated valuations
- referrals to local appraisers
Indexes track historic price trends in the general market for the average-quality building in each of the four commercial property sectors. The indexes are intended for use by appraisers, analysts, brokers, building owners, and real estate professionals.
Automated valuations are provided through the use of the SecondStreetIndex.com Automated Valuation Model, or AVM.
SecondStreetIndex.com provides referrals to local appraisers with expertise in valuation. Appraisers typically inspect properties in the field and apply multiple methods of valuation, testing the results for reasonableness and reaching a value conclusion. An appraiser may make use of a SecondStreetIndex.com Automated Valuation Report as part of an appraisal. SecondStreetIndex.com provides referrals to state-licensed appraisers and to appraisers with the MAI and SRA designations of The Appraisal Institute.
SecondStreetIndex.com provides valuations through the use of an automated valuation model (AVM) for commercial, or income-producing, real estate. For the calculation of the value of a given property, the model makes use of information input by the user, or operator. It also makes use of data and formulas that are housed in the system. SecondStreetIndex.com provides an Automated Valuation Report that details the analysis of value, with payment for reports through a credit card system.
Information input by the operator is maintained in confidence in the archives of SecondStreetIndex.com. The information input by the operator is accessible to the operator to update the valuation of a property at a later date. The inputs made by an operator, the Final Value Outputs shown to the operator, and Automated Valuation Reports made for an operator are not divulged to others.
Information input by large numbers of operators may be aggregated, or grouped, by SecondStreetIndex.com to produce average data concerning rent, vacancy, and expense levels for a given region or a property type. Aggregated data of this kind may appear in an Automated Valuation Report.
A SecondStreetIndex.com Automated Valuation Report is intended primarily for the analysis of income-producing properties with simple income streams. It is less well suited to the analysis of properties that are leased at rates that differ from market rates or for properties at which rent levels are likely to vary widely in future years (as in the case of rental properties scheduled to experience substantial step rent increases). It is not suited to the valuation of properties that are usually non-income-producing, like development land, schools, and single-family houses.
SecondStreetIndex.com makes use of the inputs made by the operator for the description of the property that is implemented in the value calculation. The accuracy of the description of the property, including financial inputs made by the operator, is the responsibility of the operator.
The Final Value Output applies only to that part of the property that produces the income stream. If a property includes other substantial sources of value (i.e., surplus land that is not rented but that may be sold or developed), the value of these is not included in the Final Value Output.
The Final Value Output that is provided in an Automated Valuation Report is effective on the date that the report is made (rather than on earlier or future dates). Valuations are provided for properties in the U.S., nationwide. Values are expressed in U.S. dollars.
The Final Value Outputs and Automated Valuation Reports are not reviewed by personnel at SecondStreetIndex.com before they are presented to the operator. They are the product solely of the operator's inputs, of aggregate data housed in the system, and of automated methods of analysis. Personnel at SecondStreetIndex.com test the system for accuracy. They do not review individual valuations. If a Final Value Output or Automated Valuation Report is to be used in financial decision-making, SecondStreetIndex.com recommends that the output or report be reviewed by an appraiser or other qualified real estate professional familiar with the method of analysis, so that the results may be tested for reasonableness.
The inputs made by the operator (the party accessing SecondStreetIndex.com on the Internet), as well as the value calculations and reports made by SecondStreetIndex.com from the operator's inputs, are kept in confidence by SecondStreetIndex.com. They can be accessed only by the operator and by staff at SecondStreetIndex.com. They are accessed by the operator by means of the file name and password maintained by the operator.
SecondStreetIndex.com aggregates, or groups, information from large numbers of operators to produce ranges and averages applicable to properties within a given property type. (That is, SecondStreetIndex.com may group inputs from a large number of operators. Grouped data may be used to produce a range of costs, for instance, of property insurance for small multi-family buildings in Greater Wichita.)
Adjudication of any disputes is in the court system of the state in which SecondStreetIndex.com maintains its home office.