The tech industry has been innovating traditional industries for a long time making traditional industries more efficient and more productive. Industries such as transportation, retail, and healthcare are all adapting to new technologies and are enjoying a steady stream of startups looking to dominate their respective traditional sectors.
We have seen this with how Uber transformed personal transportation or how Amazon innovated consumer shopping. In the airlines and flights industry, we have Kayak, and when you are looking for a hotel, you have booking.com and many others. Now it’s time for Commercial Real Estate to be innovated and streamlined in a way that makes sense for both borrowers and lenders, investors and institutions.
One startup that has been revolutionizing this space is LoanBase which has built a tech-based marketplace that connects borrowers, lenders, and brokers in the investment properties and commercial real estate arena.
LoanBase’s innovative platform is unlocking capital across the commercial lending space, such as for residential loans, fix and flip, multi-family, DSCR, retail, office, industrial, and land.
Led by Co-Founder & CEO Ari Shpanya, LoanBase has built an advanced real-time data room that allows borrowers to instantly connect with hundreds of lenders in order to secure the best loan available for them. LoanBase reports to provide up to a 50% cost reduction for borrowers compared to traditional services and an 81% in acceptance rate for loans submitted through their platform.
Time Saving and Full Transparency
LoanBase claims to reduce the unnecessary long 3-month loan application process to an average of 15 days, as well as help borrowers see all potential lenders on the platform (in one centralized place). This helps remove any biased financial consulting. LoanBase also provides an in-house capital advisor for every borrower.
In a recent interview for Newsbreak, CEO Ari Sphanya said: “Lenders have the ability to update their program terms and rates through their LoanBase lender portal. Our loan officers maintain a high level of data integrity by contacting lenders on a bi-weekly basis to confirm that the terms we are showing are up to date. This ensures borrowers a seamless experience with reliable data. Bear in mind that all these rates and terms are indicative rates, so each deal would eventually be different, but the initial shopping and zeroing in on the top 10 lenders now takes seconds, not months, as with traditional commercial mortgage brokers.”
When asked about the surge in loan volumes from the start of 2022, Shpanya said:” As a fast-growing startup, LoanBase is experiencing an increase well above the industry average in the number of loans we are handling. Yet, our automation allows us to scale without impacting the borrower experience or the time to close.”
Trends That Are Currently Driving Commercial Real Estate
Based on Dan Rosenbloom’s Forbes article, some of the trends that we should be paying close attention to in commercial real estate are:
- Significant capital and available debt will contribute to another year of growth.
- Secondary markets will outgrow the country’s major cities.
- The housing hot streak will (most likely) with a volume reaching $179 billion through Q3 2021.
- Offices will change, but they won’t shutter.
- Real estate will welcome more quants to the mix.
- Proptechs got popular. Time to consolidate.
- Construction costs will rise, benefiting existing assets; “Over the past year, a combination of labor shortages, supply chain disruption, and economic growth pushed inflation to its highest rate in decades. In commercial real estate, the impact was largely felt in new construction, where materials drove project costs up significantly.
I expect this inflationary pressure will continue to impact construction costs. As a result, replacement costs should continue to rise, and existing assets will likely benefit from demand shifting in their favor,” wrote Dan Rosenbloom.