An Israeli start-up is hoping to bring order to one of the most lucrative businesses in the world and one of the most disorganized — the commercial real estate market.
And what’s more, said Ely Razin, CEO of CrediFi, which provides the first source of hard data about the industry, his Jerusalem-based start-up consists largely of immigrants from the US and other English-speaking countries,
“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.”
CrediFi is an idea that has long been needed, said Razin.
“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?”
Razin is very familiar with those other sources of data. A former top executive at Thompson Reuters, he was recruited two years ago to help develop CrediFi. “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.”
Thus, the market was wide open for CrediFi, which has as its goal helping investors make sense of the market they are investing in. “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.
That information fills a major void in the market. As incredible as it sounds, said Razin, most commercial real estate deals today are done based on word of mouth.
“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 aims to change that with up-to-date information about everything an investor needs to know – who owns a property, what bank and/or investor is financing a deal, how much other similar properties in the same area sold for, whether the bonds companies issue to finance transactions are safe, what the zoning issues are, whether the tenants of properties are doing well enough to pay the rent, and other details an investor should know before entering into any deal.
“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.”
The point is not to predict where prices are going, but to give investors the tools 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.”