Opportunities for Commercial Real Estate Lending Careers

Commercial real estate lending has been functionally unchanged for decades. As of 2019, 43% of US banks still used COBOL; programming that was invented and implemented before the internet even existed. Commercial real estate lending is dragging this dinosaur programming around and simply can’t keep up with modern ways of doing business. COBOL isn’t even compatible with modern technology. It also hinders quality customer care as today’s customers are looking for a more digital experience. 

Most borrowers are looking for exceptional customer service, which, today, means access to digital tools. Digital adoption is the number one reason why, while commercial real estate was nearly at a standstill at the height of the COVID pandemic, residential real estate lending was charging forward without a hitch. Using online or digital tools for real estate lending is a growing necessity as consumers demand this accessibility, and commercial lenders need to hire employees with the expertise to help them navigate this new territory. Today, 92% of residential borrowers begin their process by researching lenders online, and 74% use an online portal to communicate with their lender. Forty-three percent actually complete their entire application online. Commercial lenders aren’t any match for this kind of convenience with their out-of-date processes. 

It currently takes an average of 3 months to close a commercial real estate loan. This is simply too long for modern standards. First the borrower finds the property they want; the broker calls individual banks to make a deal on a loan; then the lender decides whether or not they want to get involved, and then comes the months-long process of due diligence. At the end of the day, the process is long and arduous and the borrower rarely gets exactly what they want. This is not only just bad for business, but third party lenders are seizing the opportunity to push banks completely out of the deal. 

Relying on legacy technology isn’t doing lenders any favors. Banks need to do away with these old, manual processes and invest in digital ones. This means making budgetary room for experienced IT staff to implement new banking tools. Lenders also need staff who will know how to operate these new technologies to keep the new processes running smoothly. Digital banking technology can help process loan applications without increasing defaults. It can be as simple as lenders entering criteria such as asset types, geographic regions, and dollar amounts and then letting the program do the work. Brokers enter loan details and borrower preferences, like dollar amount, occupancy, and preferences, and the advanced algorithms match brokers and lenders to make the perfect deal. 

Digital adoption, along with having the in-house expertise necessary, can bring endless benefits. All the necessary information is centrally located and can be instantly updated as needed, and the bidding and negotiation processes work much more efficiently through digital processes, rather than making individual phone calls. In the end, the lenders and brokers are working much faster to make the exact deal that the borrower is wanting to make. Everyone gets what they’re looking for and commercial real estate lenders are back in the modern era.

Due to the effects of the COVID pandemic, cracks in the foundations have been highlighted even more and job roles are going to be evolving at a quicker pace than previously anticipated. In order for commercial real estate lending to thrive once more, it’s going to require a multi-generational workforce and a wider variety of skill sets. 

The roles of leasing manager, valuation adviser, and accounting specialist are quickly going to require a more modern skill set. Some tasks which were previously manual, are rapidly moving to automation. Commercial lending job seekers will need to have a skill set that will enable them to focus on analyses, insight generation, and tenant engagement. 

Leasing managers, valuation advisers, and accounting specialists will more than likely spend the majority of their time using new banking technologies to conduct analyses and tenant engagement. Using predictive analytics and automated invoicing will free up time to enhance the focus on client or tenant engagement. 

CRE appraisers will also need the skills to use technologies such as geospatial platforms, machine learning, AI, and mobile apps to save time and money, and to develop more well-rounded valuations. 

As these roles shift into modern processes, the requirements for job seekers is also shifting. Job seekers will at least need to have completed technology or analytics coursework, like a BA or certification in big data or real estate analytics. Of course, some of the “old” jobs skills are a must as well. 

Job seekers will still need to excel in the tried and true skills such as relationship building, problem solving, critical thinking, presentation, and communication. 

Adam Hansen