How Technology Is Revolutionizing CRE Investing

Posted on October 14, 2016

Commercial real estate investing is a growing industry where personal relationships are pivotal—and these relationships are commonly built via face-to-face meetings and document-heavy correspondence. Sponsors and investors have typically exchanged information through low-tech and high-touch channels, without a great reliance upon technology.

As a result, the traditional commercial real estate investment process ends up being long and drawn-out, and because of regulatory restrictions, a sponsor’s network of investors has been limited to the people he or she already knows—friends, family members and business colleagues in particular.

Recently, however, some restrictions have been lifted, and momentum is building toward a tech-driven revolution that promises to provide a much-needed dose of modernization to commercial real estate investing.

A new era
Thanks to the JOBS Act, sponsors are now allowed to market investment opportunities more broadly through general solicitation of accredited investors. This means they can post properties online, thus opening up an immense new audience of potential partners. In fact, according to the SEC, more than 12 million U.S. households qualify as accredited investors.

With access to so many more potential investors, it only makes sense for real estate sponsors to embrace modern technology to reach these individuals, remain organized, boost efficiency and maximize this key opportunity.

As we’re beginning to see, tech is turning commercial real estate investing into a scalable, transparent industry of long-term relationships. Think along the lines of social media: investors can be “linked” with sponsors and monitor investment opportunities—all from the comfort of their smartphones or computers.

Everything is readily available at the click of a mouse. Relationships can be formed online in a matter of minutes, and information that used to take weeks to compile and digest can now be created and consumed within days.

A process like this has never really existed in private real estate investing, and countless investors and sponsors are beginning to reap big rewards from it.

These benefits include:

Demystifying commercial real estate
When it comes to investing in the stock market, you can click around the internet and get a pretty good idea of whether you’re making a smart decision. But when it comes to investing in properties, the only information that is readily available to the average person is much more generalized. Any deep analysis costs money to access, and even that information may not help you make an informed decision.

Tech-driven investment platforms, on the other hand, serve as easy-to-use news hubs for investors, making data, insights and trends highly accessible to all. Over time, sponsors can amass robust profiles of information that help build understanding around commercial real estate, boost transparency to unprecedented levels and empower investors to make smart decisions.

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