Looking to the next decade of real estate financing, a number of
factors are on the minds of lenders and borrowers including the rise
in the volume of debt finance and the impact that technology may play.
the commercial real estate finance sector becomes more fragmented and complex
in the UK and Europe, I believe debt advisers will play an even more
significant role here, as they currently do in the US. In the future, advisers
will be selected for their brainpower, commercial and technical ability,
breadth of relationships, and ability to advise on complex situations and
One of the main insights from our discussion was that the debt
adviser is going to play an ever-important role in the sector as funding
becomes more fragmented and new lending capital emerges. Attendees also debated
the role that technology will play in the future of the property finance
sector, and the importance of traditional relationship banking vs. the new-age
software algorithm driven approach to bring deals together.
Our recent roundtable at Spire Ventures, which also brought in technology experts, highlighted the impact that technological advances could make in coming years.
While traditionalists defended the role of relationships in finding borrowers’ the finance they require, proptech challengers highlighted the role of technology to deliver a more efficient experience for borrowers and lenders alike. The consensus reached was that a hybrid approach that is both technology-enabled and relationship-driven would be the future of the CRE debt sector. Attendees agreed that there is a tremendous amount of change yet to come to the sector, and it’s definitely a sector to keep an eye on. Ultimately, however, even with the best technology in the world, you can’t AI away good old-fashioned commercial instinct.
Faisal Butt, founder of private equity boutique Spire Ventures and venture capital firm Pi Labs