Innovation: Mid-Year Update

July 29, 2021

Innovation: Mid-Year Update

July 29, 2021

So far, 2021 remains full steam ahead for Berkadia’s innovation team, which continues to develop and roll out new proprietary tools and resources, as well as support industry innovation via our BeEngaged program. At the start of the year, Berkadia launched Digital Client Solutions, which focuses on technology efforts designed to help our clients make more efficient and effective investment decisions. From improving clients’ ability to assess and evaluate acquisitions to speeding the time it takes to get a loan quote, the platform aims to support the growth and expansion of our production network. We caught up with Eric Flohr, Head of Digital Client Solutions, to hear how the year is shaping up, top priorities for innovation and what he’s most excited about for the remainder of 2021.

The pace of work for the Innovation team didn’t slow down in 2020, though the aim of the work—expediting the work from home transition, pivoting data analysis to COVID-related efforts, etc.—shifted. Now that acquisition activity has picked up again, have innovation priorities shifted?

The resurgence in investment sales transaction volume has certainly been incredible. While the market had some activity in Q2 and Q3 last year it really started to open up in Q4 and activity has continued to accelerate throughout the year. As such, we’re devoting significant efforts to speeding the deal closing process, both on the sales and financing sides. A big focus for us through the end of the year is making it much easier and faster for our borrowers to obtain debt quotes. We’ll be pulling together various pieces of technology to make the data submission process much easier as well as turn quotes around faster.

At the same time, coming out of the pandemic it is clear that stakeholders across the entire commercial real estate transaction lifecycle continue to embrace digital transformation. There’s no going back! We’re working with stakeholders at virtually every step of the process to integrate our systems, increase flexibility, remove friction and time from decision making, and provide a superior experience. I expect these trends to continue and even accelerate moving into 2022.

As you mentioned, in the past 18 months alone we’ve seen tremendous strides in technology adoption in CRE. Where is innovation having the greatest impact? How does this affect Berkadia’s efforts?

While not directly tied to Berkadia’s business model, there is a tremendous amount of investment and impact at the property operations level. Owner/operators have embraced a number of technologies to improve their property level performance, from the increasing sophistication and digitization of entry and access to properties using facial recognition, to remote and digital tours to scale leasing agents, to technologies to optimize spend on marketing, and predictive analytics on capital equipment. All of these investments are helping property/asset managers to optimize efficiency and performance, improve tenant experience and, ultimately, increase their return on investment.

While most of our work is around helping improving processes and outcomes for buyers and sellers in the transaction lifecycle, we have a really cool pilot underway with one of our BeEngaged participants, our borrowers, and several lender partners to help tenants improve their credit scores by making on time monthly rent payments. I am excited to see the impact of such a solution and am invigorated by the yet untapped potential of innovation in the CRE space.

What trends do you expect to impact innovation for the remainder of 2021 and into 2022? Anything that particularly excites you?

Collaboration and integration are the name of the game going forward. There are a number of companies with great functional, or point, solutions. However, the overall impact of these solutions is limited unless they are tied together to streamline the overall property lifecycle. We’ve seen an increasing number of companies wanting to partner with Berkadia to generate such efficiencies and remain interested in partnering with others who have a similar vision. We are in a great position to truly demonstrate the power of Berkadia’s investments to our clients through the rest of 2021 and into 2022. There’s still so much to share!

-Eric Flohr, Head of Digital Client Solutions