In the ever-evolving landscape of commercial real estate (CRE), investors continuously face the challenge of navigating through fragmented and scattered data, often hindering their investment decisions. With industries managing smaller transactions having access to superior tech systems than the multi-million dollar CRE sector, the need for innovation and streamlined data access has never been more pressing. Enter GPARENCY, a revolutionary platform aimed at addressing these shortcomings. We had the privilege of sitting down with its Founder and CEO, Ira Zlotowitz, to discuss the platform's unique offerings, the current state of the CRE market, and his insights on the shifting dynamics of the investment and lending environment:
Q: Is the average CRE investor getting the sort of comprehensive information they should have about their investments - and if not, why not?
Despite today's tech-driven landscape, investors have to grapple with a relentless data maze, scattered across numerous websites, as they struggle to meet their due diligence and data requirements. It's remarkable that industries handling $100 transactions have more advanced systems than the commercial real estate (CRE) sector, where millions of dollars are at stake. GPARENCY was specifically designed to address this glaring issue. The information has always existed, but it was scattered and challenging to access—until now.
Q: What is GPARENCY bringing to the information landscape for LPs that wasn’t previously available, and why is this important for LPs?
GPs have historically had limited options, but LPs have faced even fewer. One of the most groundbreaking advancements we've introduced is granting LPs access to the same powerful pipeline features that were once exclusively available to GPs. This includes real-time calculations, alerts about returns, and investment status updates. Our innovative platform enables LPs to manage all their holdings in a centralized location, displayed on an interactive map. Imagine having comprehensive visual representations of your investments, complete with up-to-date information and payout schedules, all at your fingertips!
Q: As someone who runs a listing site, you have a prime view into today’s dealmaking landscape. Are any CRE sectors performing in a way that you believe bucks the current conventional thinking?
Our unique approach connects you directly with the listing brokers for our 150,000+ listings, encouraging direct communication so you have the most informed perspective on the market. Additionally, we provide you with tools to conveniently store notes and pertinent documents, allowing you to construct your own property comparisons directly on the listings for future reference. In the past 30-90 days, we’ve seen a large percentage of brokers across all market sectors and property types proactively adjusting pricing to more accurately reflect the impact of elevated interest rates and capitalization rates.
Q: It’s been a turbulent time in commercial real estate, with high rates and much uncertainty in the economy. With all the uncertainty, what is the biggest mistake you see investors making?
One misstep specific is assuming you can purchase a deal now and expect rates to eventually drop for a refinancing opportunity down the road. I believe we’re seeing a new norm, and we have to decide whether a deal is good or not based on this new financial landscape. Many investors also underestimate the potential risks of a deal and find they’ve wasted time pursuing it only to have the financing fall through during underwriting. Investors need to be able to understand their numbers faster and more efficiently to point them in the right direction, which is why we launched a free underwriting calculator that gives them the numbers they need in minutes.
Q: Given the state of the economy, what is the most important thing investors need to know about the state of lending right now?
The state of lending is dynamic, with interest rates, lending criteria, and risk appetites of lenders constantly shifting—that means an investor doesn’t need occasional updates, but daily updates on where the market is holding to gain a competitive edge. Today's lenders are operating under the assumption that the market is not on an upward trajectory. Consequently, when issues arise, persuading lenders to bear those risks in anticipation of a brighter future becomes an increasingly challenging proposition. Staying on top of daily lending interest rates and having connections that are in communication with lenders around the nation mean investors can stay on top of the market and strike while the iron is hot.