Despite being one of the most lucrative businesses in the world, data gathering for commercial real estate is still being done manually. But that is about to change, hopes Israel-based startup CrediFi, David Shamah of Times of Israel reports.
CrediFi hopes to bring order to the disorganized part of the system of commercial real estate by being the first source of hard data about the industry, with most of the company's employees being immigrants from the US and other English speaking countries, Ely Razin, CEO of the Jerusalem-based startup shares.
"Israel is usually known for its strong tech skills, and as a big data company, we have our share of data geeks," Razin told The Times of Israel. "But to make this work as an Israeli company, we needed a lot of people who were experts in the commercial real estate, and we were able to find them among Western immigrants to Israel."
According to Razin, the industry has long needed what CrediFi offers.
"The commercial real estate market is worth trillions, but until this year there has not been a central depository of objective information about buildings, investors, landowners, and other essential, basic information an investor needs to make a good deal. That kind of data has long been around for the stock market and other investment markets - why not for commercial real estate?"
Being a former top executive at Thompson Reuters before he was tapped to develop CrediFi two years ago, Razin has vast knowledge of those other sources of data. "The idea was puzzling to me, because it was hard to imagine that there was no automated source of information about this market - but an extensive study we conducted indicated that that was indeed the case."
Findings from their study revealed the wide open market for CrediFi, which aims to help investors make educated decisions for their investments. "We automatically gather information from a large number of sources, digest it and then present it to clients, who use it to make decisions on what properties to buy," said Razin.
Quite incredibly, Razin points out how word of mouth actually plays an important role in most commercial real estate deals.
"Even among the biggest investors, who spend tens of millions on buildings, projects, malls, and other real estate, one of the most common ways for them to find a deal is the 'some guy' system, as in 'some guy' told them that there was a good property at a certain location. It's in an industry that has until now been based on manual data gathering methods to compile, digest, and share crucial data for vital investment decisions."
CrediFi hopes to change this culture by offering up-to-date information for investors, from the who's-who, bank/investors in current deals, to zoning issues, and renters' payment capacities.
"Because the data is so scattered, we have to work on a painstaking city-by-city basis to get all the information about properties, from municipal and other government resources, banks, the SEC and other federal agencies, from contracts and mortgage documents, and from information we cull from the web, social media, and many other sources," said Razin. "It's very much a big data play, taking into account a wide variety of data, from local real estate news to world events. All that can affect the price of real estate, and we scan, digest, and present the information to clients in an actionable form."
What CrediFi offers on the table isn't a forecast of how the numbers will be, but to provide investors with the data they need to make intelligent choices.
"Our big data solution gets that information and presents it in a way investors can actually use," said Razin. "To date we've covered data about more than $2 trillion in loans, and have data on 1.5 million properties, with dozens of top investors as our customers. Data gathering and analysis in this area has turned out to be a real Israeli specialty, given the talent and capabilities we have here. With a start like this we believe our chances for success are great."
