Welcome to the ‘Commercial Bulletin’ with Emma Callahan, a Q&A focused on changemakers and leaders in the commercial real estate space.
The objective of these interviews are to gain deeper insight into the current state of the industry and the emerging trends that are shaping its future. From the impact of new technology on property management to the changing demands of tenants in the modern market, our Commercial Bulletin gives you an inside look at the complex world of commercial real estate.
This week we have been in touch with Anthony Romano, CEO at CREtelligent.
CREtelligent opened its doors over six-years-ago as eScreenLogic, a Commercial Real Estate (CRE) environmental due diligence firm focused on environmental assessments for real estate transactions. The company and market demand have grown quickly for a “one-stop” for CRE due diligence and the launching of the industry’s most innovative order management and workflow platform called RADIUS. The company and platform now offer the full suite of CRE due diligence including environmental assessments, property condition assessments, ALTA Land surveys, Zoning Compliance Reports, Valuation Services, flood zone determinations, carbon footprint reports, and more.
Tell me a little bit more about your organization, a brief introduction.
In 2005, I led the rebranding of a Sacramento based company to what is now known today as CoreLogic. We sold CoreLogic in 2007 to First American. Whilst there, I was the EVP of Global Mortgage Solutions. First American, a $8M title business, were very acquisitive, and had several parts of the business focused on non-title offerings. A few years later, in 2010, First American spun out in an IPO many of the non-title related business. I stayed as an executive at CoreLogic post IPO then returned to First American in 2014 as Chief Revenue Officer. Most of my focus was on residential and capital markets solutions. I became incredibly interested in the dislocation and fragmentation of the CRE space. The solutions were antiquated, and due diligence solutions were outdated. This had me very intrigued. In 2019, I took the CEO role at CREtelligent which at that point was a very small company. We have now grown it to close to $20 million in revenue and 70 plus people, and it’s been a fascinating journey.
What are some of the challenges you have faced within the Commercial Real Estate sector?
What the business (CREtelligent) does is really focusing on revolutionising CRE property due diligence. Our solution encompasses before, during and after a transaction. We launched a technology platform called Radius. Radius, essentially, is an order management and workflow solution that allows brokers, banks, REITs, owner/operators, law firms, insurance companies, when working on CRE transactions, to identify their property, order status, delivery, and archive, any product solution or service we have. Some of the data reports have complex scoring and there are a lot of traditional compulsory services. Think of phase one as an environmental assessment, survey and appraisal, these are done during the transaction to underwrite a deal. Post transaction, we are involved with a module on the platform for asset monitoring. Essentially, we will monitor portfolios of any asset classes/property types for ongoing risk, risk mitigation and risk management using their solutions. If you look back at the technology prior to this, it was a challenge. The processes were very manual i.e phone calls and emails, using Dropbox and having to work with dozens of vendors. CREtelligent has shortened the transaction cycle time, reduced costs and improved the experience, for everyone involved in the process.
Since positioning your career in Proptech, how have you seen the space grow?
The term Proptech may have been around a while but it’s really within the last few years that it has come to the forefront. Of course, coming from the residential side where, as I mentioned, I think most of the capital was deployed on tech solutions for mortgage transactions, I was in a different space. Now you have venture capital and private equity that are interested in the commercial space and saw a real opportunity in different verticals such as climate, leasing/property management, deal management, and ESG and have invested. I believe with commercial, it will be evolution and not revolution, as it relates to the adoption and implementation of these technologies, and the larger deals have different complexities.
As for how we differentiate, if you look at tech-enabled services, the human element is a very critical part. In regards to our business model, we have a frictionless transaction solution, however with high tech, you also need it to be high touch. We have a world class customer success team that assists on deals, bundles and report interpretation. This is something I see continuing on in the space which is matching technology with talented humans that help make sure transactions get done the right way for our clients.
What does the coming year hold for your company? What are your expansion plans?
Currently in the market you have several innovative technology companies in the CRE/Proptech space, that have raised funds and are started on their journey. With the current economic climate, there are big burn rates and low revenue, and unfortunately, several organizations are in quite a bit of trouble. As a leadership team we have done several strategic acquisitions. In our past, combined with our leadership team’s history, we have done roughly $500 million of acquisitions. Our focus is on organic growth. As we move forward, I believe our roadmap is driving different extensions of our platform, new features, and elevating the idea of revolutionizing. As discussed, property due diligence in the commercial space is about modernising the CRE transaction and making it as seamless as possible. Looking at the time, energy and cost that it takes to get a transaction done, there is still is so much that can be done to reduce the cost and friction in the process. From this, there are several ways to expand. Right now, we have improved how that transaction gets done and how all the counterparties communicate. Our roadmap for the future will be focussing on different areas of the deal.
What have been your learnings when it comes to attracting and hiring the right talent?
The space has enough complexity to it that it helps to have individuals that have deep domain expertise, and a real fluency in the space, whether that’s the broader real estate finance business, capital markets, brokerage, or being involved in financing or getting a transaction done, and diligence, etc. It is great to have people with different lenses that come from outside the vertical, but we found the most success in our business with candidates that have lived and breathed in the space. For us, finding the right people is job one followed very closely by building the right culture and ethos which has not been the easiest with the pandemic. Culture is always a challenge, for any business as they move forward and scale. How do you create a culture and get everybody in alignment while still growing. Getting this right is one of the most important things to focus on in your talent strategy.
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