For commercial real estate lenders, the process of uncovering, organizing, and interpreting data on a property's mortgage or debt history has always been a time-consuming and error-prone endeavor. Over the last several years, however, the industry has witnessed the emergence of CRE technology capable of quickly surfacing and aggregating property data points—including debt history and lender information—from a variety of disparate sources.
The unprecedented speed with which lenders are now able to access previously hard-to-find information has already begun to transform the way lenders conduct—and attempt to grow—their businesses. Freed from the burden of tedious discovery work, lenders have been empowered to rapidly identify and form relationships with leads, generate new business, research their competitors, and ultimately, close deals. Below, we'll dive into four of the primary ways in which CRE data platforms will continue to transform the way lenders approach their work.
Opportunity No. 1: Identify High-Potential Leads
Until recently, the ways in which CRE lenders were able to gather property information were extremely limited. Lenders could visit their county clerk's office and dig through microfiche debt records or disorganized registry of deeds databases; they could work with a title company to pull a list of outstanding deeds of trust on a property; or, more recently, they could use an online database to generate and download a property report—usually for between $30 and $50 a pop. Needless to say, this state of affairs was hardly conducive to efficient, large-scale research.
What's more, once a property's debt information was pulled, lenders were left to calculate the property's remaining balance based only on the recorded interest rate and the assumption that the current owner had paid the mortgage every month since its origination. At best, the results were an approximation.
However, thanks to the mass digitization and consolidation of CRE property data, this inefficient status quo has finally started to evolve. Today, lenders can leverage CRE data platforms to quickly search for specific properties (or groups of properties) based on dozens of criteria, including asset class, mortgage size, lien information, previous and/or ongoing lender involvement, and debt characteristics like mortgage origination and/or maturity date. This improved precision enables lenders to dedicate their time and energy to contacting only those property owners who are likely to be in need of their services. Opportunity No. 2: Quickly Generate Meaningful New Business
Reaching out to property owners in need of mortgage refinancing is not only time-consuming—it's also time-sensitive. Fortunately, in addition to consolidating property information, CRE data platforms provide lenders with one-click access to owners' contact information.
This spares lenders the hassle of tracking down elusive (and often outdated) ownership information, freeing them up to spend more time developing—and closing—actual deals. Many of these platforms can also be used to build and export comprehensive lead lists that facilitate the execution of highly-targeted marketing campaigns.
Opportunity No. 3: Better Understand the Competition
As a lender, it's always a good idea to be aware of what the competition is up to in your particular market niche. The ability to quickly identify all properties associated with a competitor is one of the most powerful means of getting—and staying—a step ahead.
Sophisticated CRE data platforms can consolidate information about what the competition is doing, so lenders can stay informed without having to manually conduct competitive research.
Opportunity No. 4: Better Understand the CRE Lending Landscape at Large
It's important to pay close attention not only to specific properties in which you may be interested, but to the debt characteristics of similar properties across the industry at large. If numerous properties in the area have fast-approaching mortgage maturity dates, that might indicate an upcoming market downturn.
Making these connections is nearly impossible when you're working with individual data points, but emerging CRE tech can help lenders connect the dots and achieve a more panoramic view of the entire CRE lending landscape. These insights allow you to make meaningful, informed decisions and drive your business to greater future success.
Rich Sarkis is CEO of Reonomy. The views expressed here are the author's own and not that of ALM's Real Estate Media Group.
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