Certainly, some advances have been made in the residential sector, where agents are interested in selling more properties to private outfits – ImmoScout24 , Rightmove and idealista are just some platforms. But Rightmove, for example, was started 20 years ago. For residential homeowners it has also become standard to search and compare mortgage offers online via multiple search engines and tech platforms.
However, little progress has been made to help institutional and professional investors and lenders to finance commercial properties efficiently. A group of capital markets fintech companies are providing general tools to financial institutions such as banks, hedge funds, mutual funds or other institutional investors. These range from alternative trading systems to financial modelling and analysis software, but most of these are not suited to commercial real estate debt. This is where Finloop provides an all-in-one digital solution. The platform targets the full value cycle of real estate finance and is a complete digital toolkit for securing, managing and closing CRE loans.
Finloop focuses on delivering three key features:
Security: Often the sale and financing of properties is a private process. When British Land and Oxford Properties announced the sale of the Cheesegrater – 22 Leadenhall Street, London – for £1.15bn to Chinese buyer CC Land, very few market professionals, let alone the public, had even known the building was up for sale. Security and privacy are important factors for large investors also when it comes to financing and negotiating with lenders.
On a personal level everyone uses online banking tools and payment systems, which have proven secure. Something similar can be delivered through a digital commercial real estate debt platform, using the right technology to comply with the highest regulatory standards, with the user having full control over access rights.
Seamless communication and integration: The software provides the missing link to the more opaque real estate lending market. Currently financing terms are as good as the contacts of the transaction manager, originator etc. The large UK clearing banks have introduced automated online tools to approve small financing requests, but having a personal conversation about a specific project in order to achieve better terms is difficult. The financing of a large commercial property is a collaboration between many parties, such as bankers, borrowers, lawyers and valuers.
On Finloop, all communication tools are offered on one digital platform, making all emails, chats and document reviews traceable. This does not mean eliminating the human factor but rather allowing all parties to communicate in real time to provide their input and files, with the possibility to find communications years later.
Efficiency and scalability: Finloop offers real-time communication and collaboration between all parties to increase the efficiency of lending teams and opens new horizons in how to improve borrower-investor-lender communication. By reducing the time per transaction and reducing valuable meeting and travel time, in a world where travelling can be difficult, everyone can become more efficient with the support of technology. This extends to closing, managing and servicing existing loans, allowing business to growth more efficiently at the same as reducing the carbon footprint of the financial service industry and helping meet ESG requirements.
It is clear that digitisation is coming to the real estate sector and established companies should not only adapt to new challenges and disruptive competitors; they must also ask themselves what role they want to play in the new world, and what they are able to contribute. However secure most companies still feel, the next revolution could be just around the corner and the ongoing pandemic experience has shown how current processes and systems can be devalued very rapidly. It is therefore time to take an active role in shaping the future.
