OptioLend launches new marketplace to become ‘the LendingTree of commercial real estate’ – TechCrunch
The commercial real estate industry faces a number of challenges with so many people working from home (rather than offices) and retailing down a slippery slope as more people shop online.
But downturns create opportunities.
Join OptioLend, a new startup committed to helping individual investors capitalize on commercial real estate opportunities by connecting them with “the best possible” lenders. The Columbus, Ohio-based company launched its market Tuesday after months of private beta.
The new platform uses an AI-based algorithm and a database of more than 9,500 sources of capital to help potential real estate borrowers find debt financing, to find lenders “with the best terms”. In other words, the company’s self-proclaimed mission is to become the Commercial Real Estate Lending Tree. (For the stranger, LendingTree, based in Charlotte, North Carolina, is an online marketplace that cConsumers have multiple quotes from multiple lenders for things like mortgage, student, and personal loans.)
Indeed, Joel Lowery, a former LendingTree executive who built the back end of this company’s platform, helped build the OptioLend portal, which acts as a technical advisor with former IBM data scientists.
Once an investor applies for a loan, OptioLend will identify up to 20 lenders who are best suited for that application based on recent lending and other criteria. Borrowers and brokers can negotiate and close deals within the company’s platform through the largely automated process, the company said. But it is also being launched “with a concierge service from experienced capital advisors” to help users who need help with obtaining credit.
OptioLend raised around $ 1 million in seed capital last year, led by the Schottenstein Family Office with the participation of Loud Capital and MLG Ventures. The Schottenstein family is one of the largest private property owners in the country.
CEO Richard Geisenfeld said there are a multitude of lenders who can lend at that price while there is “a relatively small pool of sources of capital” focused on deals above $ 10 million.
“Capital markets are seeing refis and new loans surge by 50% as markets gradually recover from COVID,” he said. “And with existing loans coming due, we think we’re at the right time to roll out. Properties are being repurposed and are already beginning to be. “
While OptioLend can work with institutions and individual investors, it tends to focus on the latter.
“Institutions have many options, ”said Geisenfeld. “Not individual investors.
Geisenfeld said he came from a family of developers and, as the founder of Capital Commercial Partners, completed transactions worth around $ 1.7 billion in 44 states. He had represented the Schottenstein family for almost 20 years before the concept behind OptioLend came up.
As an experiment prior to founding OptioLend, the family office had contacted more than 50 lenders to fund the purchase of a small triple net portfolio with a single tenant. They were surprised to find that interest rates varied up to a full percentage point.
“Every time we made a deal with them, we heard anecdotally that there were better ones [loan] The prices were out there and they agreed that we need to create some kind of efficiency and automation, ”Geisenfeld told TechCrunch. “So I went to one of my colleagues and asked how we can change the paradigm from the traditional methodology. And that is the problem we want to solve – by increasing an investor’s access to capital ten fold in 10 minutes. “
The startup says it not only helps investors with new loan applications, but can also help them refinance existing assets. The sweet spot is in mid-market transactions – in the $ 1 million to $ 10 million range.
OptioLend will work with commercial real estate and mortgage brokers alike by allowing them to use the platform directly or refer property owners to it. Your referral incentive is to earn up to 50% of the original fees.
David Schottenstein, director of the Schottenstein Family Office, noted in a written statement that in today’s marketplace, borrowers with limited access to capital sources sometimes sign loan terms with interest rates “up to 100 basis points higher than necessary”.
“OptioLend’s ability to quickly do business with multiple lenders helps ensure borrowers get the best possible terms,” he added.