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Tech-based platforms are changing CRE investing

On Behalf of | Oct 18, 2016 | Commercial Real Estate |

Real estate investing is a booming industry in California and throughout the U.S., and many investors are looking to put their money into commercial properties rather than residential. While in the recent past, most commercial real estate transactions were handled in person, modern technology is changing the industry, allowing for investors and sponsors alike to make more informed choices.

The increase in online investing channels is primarily due to the enactment in 2012 of the federal Jumpstart Our Business Startups Act, or JOBS Act, which lifted several restrictions regarding the ways real estate investors and sponsors could communicate. The JOBS Act opened up the industry like never before. Technology-driven investment platforms have become so ubiquitous, in fact, that online investing channels handled an estimated $2.5 billion in transactions worldwide in 2015. That number is expected to grow to more than $3.5 billion by the end of 2016.

Many industry insiders welcome the changes, which may help simplify the process of investing in commercial properties. Modern tech-based platforms are essentially all-encompassing tools that can help investors gather extensive amounts of information about particular properties and neighborhoods, communicate more efficiently and update reporting templates simply and in real time.

Sources indicate that millennials utilize online investment channels about 10 times more than investors and sponsors in other age brackets, giving young entrepreneurs an edge over many seasoned investors. Those who wish to increase their profit margin and efficiency when buying or selling commercial real estate, such as office buildings, warehouses and retail centers, may wish to integrate tech-driven platforms into their business model. Building long-term relationships has always been a key element of commercial real estate investing, and modern channels can help strengthen business partnerships since they ensure transparency and streamline the exchange of information.