Commercial real estate loans are getting a major upgrade: Are you missing out?
This isn’t surprising given we now, more than ever, value our time above almost everything else. And often times, these digital solutions actually cost us less as well because operating costs are lower than brick and mortar. Although real estate has been late to the game, that is starting to shift.
The first decade of real estate tech was focused on access to information and data. Zillow, Trulia, Loopnet, Redfin and others rose to the occasion to create easier and cheaper access to data that was historically kept close to the chest by brokers and agents in an attempt to concentrate power. However, these early pioneers did little in terms of automating real estate transactions. Over the last few years, companies like Opendoor (brokerage), blend labs (residential mortgage), doorstead (property management), have started to shift residential real estate transactions that were once offline and riddled with inefficiency and too many middle men into elegant digital experiences that save users time, money and a lot of energy.
Commercial real estate has been a bit more stubborn and only recently have transactions in commercial real estate started to move online. With early innovators like Crexi (CRE brokerage) and Bowery Valuation (appraisals), digital is starting to eat away at how things were historically done – via email and phone call.
This wave is what we at District are most excited about. At District, we’re reengineering commercial mortgage lending to increase speed, scale and transparency for borrowers and capital markets brokers. Our DREAMS Portal (District Real Estate Automated Mortgage System) allows borrowers looking for loans on commercial real estate properties around the country to complete the process digitally. Whether you are working on a multifamily, office, retail, industrial or hotel transaction, we can streamline your loan experience and offer you loans ranging in size from $5 million to $20 million.
Technology in lending is not new. We’ve seen it in pretty much every vertical through companies like LendingClub (consumer loans), FundingCircle (small business loans), SoFi (student loans), and Better Mortgage (residential mortgage). However, commercial real estate is the last leg of lending to experience automation. This isn’t surprising given a typical CRE loan can be 10+ times larger than most other loan types. Given the larger loan size, doing things manually has worked up until now. However, as consumers get more accustomed to digital experiences that they can complete on the go or from the comfort of their living room using their laptop or tablet, they expect more. These borrowers understand that their time is valuable and a digital experience helps them save time and as a result saves them money.
They also understand that the current borrower experience is broken, everything is manual, and underwriting is still largely driven by traditional data plugged into an excel model. Data and documents are exchanged via email and through phone calls and often the same document is requested 3 or 4 times during the loan process. Additionally, borrowers and brokers are often times in the dark not knowing where their loan is in the process. At District, our DREAMS Portal streamlines communications, makes data and document collection seamless and automates loan processing and underwriting all while keeping the borrower fully informed of the loan process. We’re well underway towards automating the last leg of lending, CRE.
But we also understand that technology alone isn’t enough. When my Co-Founders and I first started District over a year ago, our vision was not only to build technology to automate the CRE Lending process, but also to provide borrowers with attractive debt financing options for their real estate deals. We understood that technology alone wouldn’t be enough to win over an industry that has become accustomed to doing business a certain way. Rather, we wanted to provide something more tangible in the near time while proving our long-term value and thesis – that a digital experience is far superior and cheaper than an offline one.
Technology is thus only one of the key pillars of District and we’re also building the largest CRE Lending Company for loan sizes below $20 million – the middle market opportunity. To realize this vision, we recently launched a commercial real estate bridge lending business for loans ranging in size from $6 to $20 million. We offer competitive rates, high leverage and a flexible structure. We will pair technology with a personalized touch to streamline the lending experience and help borrowers and brokers do more deals.
District is excited to be part of this industry shift to online CRE transactions. We’re excited to drive towards our mission to redefine the CRE lending industry. We’re big believers that borrowers deserve more and deserve better and we won’t rest until that dream is a reality.
CRE Lending 2.0 is here.
District is a balance sheet lender re-engineering the commercial real estate mortgage process. By developing innovative technology, District is able to increase the speed and accuracy of deploying capital while increasing transparency into the lending process. As a national firm, we specialize in short- to mid-term bridge debt on all product types with competitive rates and leverage.
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