Modernizing the Lender/Developer Relationship with Built
As the real estate market continues its current meteoric run, aided by low interest rates and significant multifamily and single-family demand, commercial projects are becoming more expensive as competition for sites in growing markets continues to heat up. This rush of new entrants in development has created supply constraints and driven material costs higher. Finding projects that yield returns worthy of investment is becoming increasingly more challenging, and risk mitigation tools are imperative for executing an effective, opportunistic business strategy.
Commercial real estate developers have the opportunity to maximize risk-adjusted opportunities where others may shy away. They have the ability to create meaningful spaces that positively impact communities, while maximizing risk-adjusted returns for their investors—it’s a business model that can be incredibly fulfilling and simultaneously brutally risky. While developers certainly get compensated for that risk, it’s not an appetite that everyone can stomach.
Tier 1 and Tier 2 developers are seeking to create cost efficiencies within their organizations to run smoother projects with fewer cost overruns. Development managers want more oversight over their draw submission and approval process, quicker draw turns to ensure their investment waterfalls are achieved on time, and an aggregated system of record to track pro formas, budgets, and manage general contractor schedules and expectations. In a highly competitive environment, commercial real estate development firms are finding ways to stay lean and eliminate costs or risks that could eat into increasingly tighter profit margins. Workflow technology tools that improve efficiency provide a more fluid and digital experience to overworked analysts. These tools that reduce costs associated with unnecessarily convoluted and manual tasks are becoming imperative to the business objectives of some of the nation’s largest developers.
With Built, large-scale commercial developers work in a cloud-based digital ecosystem with their lenders on budget and draw submission, review, and approval. Built’s specific online portals allow the sponsorship entity and the lender to effortlessly track collateral through every stage of the construction process which accelerates the movement of money into projects with less risk. With a fully automated audit trail, Built eliminates manual processes typically done in spreadsheets or stagnant documents and integrates data into a centralized hub to provide a real-time picture of your entire construction portfolio. The result? Faster draw turnaround times. In fact, developers get paid on average 2 days faster with Built.
Built gives project teams the tools they need to quickly submit AIA draw applications at the G702/703 level, without back and forth work done in stagnant documentation or email traffic, freeing them up to participate in more value-add activities to the firm including project underwriting and due diligence.
Built’s Construction Loan Administration suite provides CRE lenders with the tools and insights they need to make smarter investment decisions and generate more business with sophisticated and startup sponsors alike. Too often the Lender/Developer relationship feels like a necessary evil because of complicated, decade-old processes around draw management, reporting, and compliance. Built changes that archaic way of thinking and has created a solution to truly engage in a sustainable partnership between the lender and developer.
Streamline your construction draw management process, create efficiency, eliminate risk, and gain the competitive advantage in a rapidly changing environment. To learn more about how Built’s solution meets the needs of CRE lenders, start a conversation with our team today.