Small Businesses, Big Debts: What to Watch
In this issue:
- Small Business Bankruptcies: What to watch for as debts rise
- Free Webinar: Transforming Workflow Efficiency: A Showcase of Approved UAD 3.6 Tools
- AI Advocacy: Appraisal Institute urges HUD to retain second appraisal requirement
- Stacey L. Thoyre, MAI, recognized as the 2025 Bert L. Thornton President’s Award recipient
2025 Wrap Up: Be Featured on AI Social Media!
As 2025 comes to a close, we’d love to see some highlights from your year! Send us a photo or two of an interesting appraisal, a chapter event you attended, or an exciting opportunity you were part of and we will feature it on our social media platforms!
Association Update
To better utilize our real estate assets and reduce operating costs, the Appraisal Institute is moving forward with a sublease of our current office space. This initiative will generate significant savings over the remaining term of our lease while positioning us more efficiently for the future.
As part of this transition, we will be relocating to a smaller, more efficient space within the same building. The new configuration supports improved team collaboration and offers more convenient co-locating options, helping to reduce commuting time for staff in the Chicagoland area.
Importantly, our building address will remain the same, ensuring continuity for members, partners, and stakeholders. Our new office location will be:
200 W. Madison, Suite 2600
Chicago, IL 60606
More details on timing, logistics, and workspace configurations will be shared as the transition progresses.
Insights
Mom-and-Pop Bankruptcies Surge: What Appraisers Should Watch
A recent news report highlights that mom-and-pop business bankruptcies have climbed to record levels as debt burdens rise. The spike has pushed more small businesses into Subchapter V restructurings, where real estate often plays a central role in determining whether a reorganization plan can succeed.
According to Epiq Bankruptcy Analytics, more than 2,200 people and small firms filed for bankruptcy this year under Subchapter V rules.
For appraisers, this trend is creating both increased demand and heightened scrutiny. Subchapter V cases typically require current, defensible valuations under tight timelines, especially when owners seek to retain property while creditors push for relief from the automatic stay.
“Generally, real estate appraisers are hired by the mortgagee to show that the owner has no equity in an attempt to get the court to release the property from bankruptcy protection,” says Reginald Carter, MAI, SRA, of Jacksonville, Florida. “The business usually retains a business valuer to testify that there are intangible equity, but the business needs the real estate as part of the trustee-approved reorganization plan.”
As filings rise, appraisers should expect more assignments involving:
- As-is and as-stabilized valuations for distressed or highly leveraged properties
- Secured-claim valuations for cramdown scenarios
- Analysis of real property’s role in overall business viability
- Cross-examination readiness, as opposing experts frequently challenge assumptions
With Subchapter V cases accelerating, the appraisal profession’s role in bankruptcy decision-making is expanding, becoming more critical than ever.
For those appraisers seeking to engage in this type of appraisal service, Carter offers the following advice: "The modern legal landscape has become highly specialized. Gone are the days when a single general-practice attorney handled every type of legal issue. Whether they handle divorces, estate planning, eminent domain, bankruptcy, tax matters, or real estate litigation, they need appraisers who deliver credible, defensible results."
Your Benefits
Display Your AI Pride with Appraisal Institute Branded Apparel
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Choose from a variety of products:
- Polos
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Lands' End: Quality Guaranteed
In partnering with Lands' End Business Outfitters, you are guaranteed to receive the finest quality products and service.
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Transforming Workflow Efficiency:
A Showcase of Approved UAD 3.6 Tools
December 18 • 11:00 a.m. – 12:00 p.m. CT
Join us for a special Appraisal Institute webinar featuring live demonstrations from approved software providers supporting the new UAD 3.6 rollout. This session offers Appraisal Institute members an opportunity to see leading tools in action, better understand their capabilities, and engage directly with the developers shaping the technology behind modern appraisal workflows.
During this one-hour program, two approved software vendors will each provide a 15-minute demonstration of their platforms, highlighting key features, functionality, and benefits for appraisers adapting to the new requirements. Following the demonstrations, a member practitioner will lead a discussion with the presenters, with 15–20 minutes reserved for audience Q&A.
Whether you’re evaluating solutions, preparing for the transition, or simply looking to stay informed about evolving appraisal technology, this interactive session will help you explore your options and ask questions directly to the providers.
Featured Demonstrations:
- Remington Jones, CEO, SFREP
- Jake Lew, Co-Founder & CEO, AIVRE
Date: December 18
Time: 11:00 a.m. CT (1 hour)
Don’t miss this opportunity to gain firsthand insight into emerging tools that support compliance, efficiency, and professional practice in the new 3.6 environment.
Advocacy Updates
Appraisal Institute Urges HUD to Retain Second Appraisal Requirement
The Appraisal Institute recently submitted comments to the U.S. Department of Housing and Urban Development (HUD) in response to its request for information on the future of reverse mortgage programs. In its letter, the Appraisal Institute emphasized the importance of retaining the second appraisal requirement, calling it a vital safeguard against overvaluation that protects the Mutual Mortgage Insurance Fund, supports accurate collateral valuation for investors, and ultimately safeguards senior homeowners.
The comments noted that many senior-owned properties exhibit deferred maintenance or condition issues that may not be fully captured in a single appraisal. A second appraisal provides an essential check that helps identify outliers, reduces the risk of inaccurate valuations, and ensures that the final value conclusion is both credible and defensible. The Institute stressed that any additional time or cost associated with this safeguard is minimal compared to the risks of removing it.
While acknowledging that HUD could refine the criteria for when a second appraisal is triggered and how appraisal results are reconciled, the Appraisal Institute underscored that the requirement itself remains crucial to maintaining program integrity.
AI Supports New York’s PAREA Adoption and Updated Appraiser Qualification Standards
The Appraisal Institute recently submitted two comment letters to the New York Department of State supporting proposed updates that would modernize the state’s appraiser licensing system, including formal adoption of PAREA and alignment with the 2026 AQB Criteria. AI highlighted the strong performance of its AQB-approved PAREA programs, demonstrated by high pass rates and growing enrollment, and encouraged New York to embrace more flexible education requirements and updated experience timelines. “New York is taking important steps to expand access to the profession and strengthen public trust in real property valuation,” said Scott DiBiasio, AI Director of Government Affairs. “PAREA offers a practical and equitable experience pathway, and the updated qualification standards will help ensure that future appraisers receive strong, relevant training.” AI will continue working with regulators and policymakers as these reforms progress.
Real Estate Horizons
Stay updated and check out links to the latest major real estate industry stories!
More Opportunities to Learn
Search the latest educational offerings! Find National and Chapter-sponsored classroom, synchronous, and online opportunities.
Your Community
The Volunteer of Distinction Program Is Making Its Return
The Volunteer of Distinction program (VoD) is returning at the start of the new year, and we could not be more excited. Recognizing AI members is one of the strongest parts of this community, and we owe it to our members to bring this program back in full force.
Every quarter, we’ll shine a light on AI Professionals who go above and beyond for the Appraisal Institute, the valuation profession, and their local communities. Any Designated Member, Candidate for Designation, Practicing Affiliate, or Affiliate in good standing is eligible to be recognized.
This is your chance to lift up the people who inspire you, support you, or help move the profession forward. Keep your eyes open in early January for the official announcement and details on how to submit nominations.
Let’s bring in the new year celebrating AI members and the profession!
Stacey Thoyre, MAI, Named 2025 Recipient of the Bert L. Thornton President’s Award
We are proud to share that Stacey L. Thoyre, MAI, has been selected as the 2025 recipient of the Bert L. Thornton President’s Award. Stacey’s longstanding service to the Appraisal Institute, including her leadership as Chair of the National Education Committee, her work as an instructor and course developer, and her contributions to sustainability and green building valuation have significantly strengthened our education programs and the profession.
Stacey is also a co-author of The Valuation of Green Commercial Real Estate and a national presenter on sustainability’s role in valuation. Her expertise and dedication have greatly advanced AI’s mission and educational excellence.
During the ceremony held during the 2025 Chapter Leadership Program, AI President Paula K. Konikoff, JD, MAI, AI-GRS, also recognized the Appraisal Institute staff with the President’s Award.
Please join us in congratulating Stacey on this well-deserved honor. Click here to learn more and view past recipients.
Until Next week
Team Appraisal Institute
