Lev CEO Discusses Lev Lending, CRE Industry

Lev recently launched its own end-to-end CRE lending platform, Lev Lending.

, a digital commercial real estate lending (CRE) proptech, has been making a lot of noise since the new year. On January 5, the company announced a partnership with the investment management provider and earlier this week launched a comprehensive end-to-end CRE lending platform named “Lev Lending”.

The company also completed a $30 million Series A led by in July and a $10 million seed round in March last year.

Yaakov Zar, Founder and CEO of Lev, sat down with FinLedger to talk about the launch of Lev Lending, the company’s journey so far, and where he envisions going from here.

Q: First of all, could you describe Lev and the services you offer?

A: I’ll start with Lev’s story and what we’re doing with the loan. The background is that Lev is focused on building technology to help automate commercial real estate transactions. My background is in enterprise software. I started a business formerly called Dispatch that built tools for home service businesses like plumbers, electricians, appliance repair businesses, and started that business in 2013.

We sold this business and I was living in Boston. My wife and I wanted to buy an apartment and I learned a lot about the residential mortgage experience. I learned a lot about how it works and had a really frustrating experience. I wanted to start an online residential mortgage company, but by then I had gained a solid background in commercial real estate and commercial real estate financing. I realized, wow, commercial real estate financing is way more broken than residential real estate.

In the residential sector, there are companies like and , etc. who really gave borrowers a really enjoyable online experience. But in commercial real estate it’s the same processes they’ve been using since 1990. Maybe with emails instead of faxes but that means it’s really hard to find the right lender and very hard to browse the loan and term sheet. to treat. Closing processes are extremely manual.

We started this activity at the end of 2019, with a focus on the digitization of commercial real estate financing, and we built the Lev marketplace. We create tools that help us understand a transaction when a client comes to us with an asset. We understand everything about this asset and we are developing technology to find the best lender for this transaction, based on machine learning technology that we are building around lender profiles and being able to understand the assets they like to lend on.

Then we help the borrower to complete the loan online with our borrower portal. We made about $1 billion in loans through this platform in 2021. Last year, and along the way, we kind of realized there was a lot more to the experience that we didn’t no control with this market. We didn’t feel like lenders were evolving at the pace we were hoping for, and we decided there was an opportunity here for us to create a truly comprehensive end-to-end lending experience for our borrowers.

We launched Lev Lending this year, and the goal is to create a truly beautiful, clear, seamless, and fast experience for our customers through the use of the same technologies we have developed over the past two years. We’re really, really excited about it.

Yaakov Zar, CEO and Founder of Lev.

Q: I know the company already had an API offering. What is the difference in strategy between an API and a full product platform like Lev Lending?

A: The goal of our API is to enable technology partners to offer real-time quotes to their customers, within their own experiences. Our first API partnership was with , and you may be familiar with one of their products called Investment Management. This product helps commercial real estate owners manage their relationships with their investors and create a portfolio of all the investments they have. What we offer them is a fully integrated quoting engine, directly connected to their platform, so that their clients can view and obtain quotes on the assets they manage in AppFolio, all in real time.

This eventually moves on to our full due diligence and loan closing experience. But we can offer those quotes in real time through the API, with a fully integrated experience for customers if that’s what our partners want.

Q: In your opinion, what are the real differentiators and differentiators when it comes to approaching commercial real estate (CRE) versus single-family or multi-family residential?

A: The difference is kind of in the infrastructure. Residential loans are for an owner-occupied single family home or a one to four family home. If it is an apartment building with five or more units, it automatically falls into the commercial category.

The complexity is the real reason, in my opinion, that this automation hasn’t arrived at the commercial, the strengths are very different. The lending infrastructure is very different in residential, something like 90% of loans are underwritten according to agency guidelines. So basically the government is very heavily regulating the residential mortgage market. They set the standards for digitizing residential mortgages.

In commercial mortgages, so few loans are government insured. Each lender has their own processes, which vary widely, and have created this lag in technological innovation. We try to fill that by creating great tools.

Q: What do you think now that Lev Lending has officially launched? What do you see moving forward and what are your goals for it?

A: We think we’ll do about $1 billion in loans with Lev Lending this year. We have a bunch of partnerships with investment sales brokers and funding brokers and then many different industry players that are going to help us get that volume. We also have an in-house origination team that helps us grow, and we’re really excited to bring these great experiences to our customers.

Q: You raised a $30M Series A last year, what were your biggest takeaways for deploying it, and are you still deploying it? Are you looking for more funding this year?

A: We have invested heavily in our products and technology. This has been our number one goal all year. We still have most of that money in the bank. We’ve had a lot of interest in fundraising, and obviously we’re exploring that if necessary, but we still have a long way to go with our current resources.

Q: Overview for Lev, what are your big challenges that you are looking forward to tackling and moving forward? Do you see an innovation that you are eager to present or get involved?

A: We are truly excited to create great experiences for our customers. This has always been our goal. We always think, ‘What would I want as a borrower getting a mortgage? How can we build the infrastructure to make it transparent? »

As a borrower, that’s a classic example, but you have to think about what it is when ordering an Uber or food delivery. There are a lot of complex processes going on in the back, but I don’t care as a consumer. You don’t care what they had to do to make it happen, you just care that it works. We want to provide the same type of delicious integrated experience to our customers. We believe this is another step towards that, and we want to help other lenders do the same. This has always been our goal.

Q: While I have you on the phone, I’m just looking at the proptech market in general. Are there other companies you are passionate about or products you consider important?

A: I think there’s a lot of cool stuff happening in proptech, I think there’s a lot of great data products coming out and we’re partnering with some of them. There are also a lot of property management software out there that are really cool, but from our perspective the most exciting thing here is really the whole fintech part of commercial real estate. This is where we focused our attention.

Q: When it comes to data, there has been an explosion of companies aggregating and integrating it. When looking for data that Lev works on, what sets them apart?

A: There are many data providers out there, and many of them are starting to converge on the same accurate or inaccurate data, depending on your perspective. We’ve had to do a lot ourselves to make sure the information we have is accurate and complete, and we always will to make sure we’re providing the best experience for our partners. We think that’s kind of inherent in an issue as big as commercial real estate data. We haven’t seen much differentiation between the different data products, but we’re looking forward to the evolution in the industry.

If you are or know a proptech founder or builder, please feel free to contact me at [email protected]

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