How to Look at Vendor Claims About Their Capabilities

The CRE world is full of software vendors claiming to enable wonders of improvements. The challenge for firms is to cut through the often undifferentiated hype. Here’s an example of how to proceed.

Archer RE, a proptech firm, told GlobeSt.com that it had upgraded its technology to “enhance deal sourcing, automate analysis, and team collaboration” for investors, brokers, and lenders who are pushed to do more in less time with fewer resources.

Realistically, these are the types of claims that many companies make so often that they sound like empty word salad. When vendors make the same claims, time to push more to get details. Here are two ways to do this.

The first is to ask for details on exactly what a vendor did for named clients. When GlobeSt.com asked Archer, the firm provided some case studies in which the clients mentioned would have had to review and agree to being featured.

One was Matheson Capital Partners, a multifamily real estate investment firm based in Charleston, South Carolina. In 2022, they started growing rapidly, moving from high-net-worth investors and family and friends to attracting institutional investors. But Matheson’s previous underwriting models “lacked the detail and comprehensiveness to impress institutional investors.”

Matheson used Archer to produce models that would impress the more sophisticated investors from institutions. The underwriting models let Matheson’s team screen more deals and move faster. Results included 73 deals underwritten in the first five months, 30 minutes to reach base-level valuation after receiving financials, and closing a deal to get a property called the Residences at St. George under contract in a “historically challenging market.”

A second was Willow Creek Partners (WCP) a Northern Virginia-based private equity firm that does a lot of work in CRE, had a “time-consuming” underwriting process. “With just one dedicated acquisitions lead, they were able to fully underwrite about 16 deals a month [with the Archer software]. Results included 68 underwritten deals in the first five months of using the software, 28 states added to the target area, and an estimated savings of 440 fewer hours spent in underwriting.

Some things to keep in mind include that any provided case studies will be chosen because they present a uniformly positive outcome and the client is willing to make details known. But rarely are events perfect, so there is likely a more complex picture behind them. That is why a potential client of a vendor should directly contact the case study companies, explain their interest, and ask about some of the complexities.

The other way of getting better insight is harder. You perform research and reach out to your network to find companies not mentioned in case studies and ask about their experiences. Again, your approach is to more fully understand what it is like to work with the company. One possible source of leads is to look for companies the vendor mentions as clients and then contacting them.