Looking forward in 2016: A CRE Tech Resolution.
“It’s who you know, not what you know” has always been the law of the jungle in commercial real estate, but following this old cliché verbatim might just leave you by yourself…knowing nothing except for how to leave flyers in an office parking lot and hoping to stuff the property owner’s windshield.
In an industry where relationships and connections are the lifeline to deal flow, CRE Tech has finally arrived, bringing with it millions of cold and calculating data points on commercial properties and mortgages. While this is new and scary, those who successfully incorporate the new school of CRE tech will increase their deal flow, whether they’re brokers, lenders or borrowers. If I can go on AirBnB right now to compare and rent an apartment in Topeka for $50 a night, shouldn’t I be able to go online and search for refinancing for my $5,000,000 loan coming due in the same Multi-Family property?
Opening the channels for more capital to find its way from lenders to borrowers is good news for everyone – especially the hungry. The hustlers could put down their phones for a minute and do a little dance in between cold calls knowing that they secured yet another edge against their lazier competitors drifting into dream-like state of complete reliance on existing relationships.
Now a bunch of CRE Tech cowboys (more accurately: nerds) have ruined everything for the lazy. Rather than relying on their traditional relationships, they’re now forced them to either get out of their comfort zones and start securing additional deals (ie looking harder and in new places) or become a melting ice cube.
To the first type of lazy: There is hope! With only moderate amount effort and a few clicks you can get a list of loans coming due, their lending terms, due diligence on the underlying properties and even a phone number of who to call to get the deal.
To the second type of lazy: Personal relationships will continue to be a major source of deal flow and will always have a place in commercial real estate. But when your competitors have technology that gives access to an entire market of individual contacts that need capital or want more lending on their books and you know every deal they’ve ever done, “who you know” isn’t worth as much as it used to be.
“OK, I’m a believer. Where do I start?”
Well, it depends on who you are and what you’re for. Some honorable mentions:
CoStar is the legacy property and leasing data provider. CoStar’s huge database of CRE property data is collected through the company’s call center gathering sales comps data, tenant information and leasing availabilities.
Afraid to dish out money just yet? Try Compstak, a leading data provider whose major innovation is its crowdsourced product CompStak Exchange, where you earn free limited services for the data you upload which makes up its paid version.
Married to the same old developers? Honest Buildings incorporates elements of LinkedIn and Yelp, allowing you to rate and discover contractors, saving massive amounts of time required to vet out developers by getting automatically matched by contractors with experience on similar project and their ratings.
If you’re looking for financial data, there’s CrediFi where I work (and is obviously the best ever) which has a combination of loans (both CMBS and the hard-to-find non securitized variety) and property data on a national level. The CrediFi platform both nationwide CRE data rollups and simultaneous deep-dives into major US markets.
Floored’s use of 3D camera technology to create multi-dimensional scans of residential and commercial property interiors is both a nifty tool for property owners to market their assets and a massive time save for all parties involved.
What do all of these companies have in common? Whether they offer property details, loan data, proprietary risk scoring or virtual tours, these CRE tech companies are about bringing efficiency to the market. Saving time, matching borrowers and lenders, comparisons, insight visualization, you name it.
But most importantly: Don’t be afraid! These companies know you’re confused and are ready to hold your hand through this scary and exciting revolution happening in the CRE industry. It’s still your world, they’re here to make it better.
Looking forward in 2016: A CRE Tech Resolution. Guest Post Michael Lapides.