Consorto Senior Business Relations Manager Mario Krivokapic says the commercial property sector often lacks uniform data – and this is what European CRE investors really want.
Sellers and brokers often reach Stage One of the deal process – providing basic details to European commercial property investors. But most deals fail to progress further due to the lack of key details that are vital for investors, Mario says.
Why investors hate brochures
“European brokers and sellers’ representatives usually first send out either a brochure or PDF – some kind of document about the deal.
“But we talk to a lot of investors and they tell us they hate that. And the reason is because the format and data that is put in the brochure is always different. If you have 10 different guys that are sending you deals, you will get 10 different formats.
“Why do they do this? Sometimes brokers want to hide information, as they don’t want to disclose everything that you can include this in the deal. This is understandable. But investors need a level of basic information on which to make decisions.”
One broker contacted Consorto saying they had a five-star hotel in the center of Paris for sale. If Consorto secured 5% buyer fees, they would send through more information.
“But that was impossible. Investors want to know what is the hotel. What is the data? How many rooms? What kind of a five-star hotel is it? What is the exact location, because Greater Paris is more than 800 square kilometers?
This kind of situation happens more often than you would think, Mario says. “The big professional brokerages each have their way of structuring brochures and data, but it’s not uniform. It is not in one simple way.
What European CRE investors really want
“In the end, investors do not care much about pictures, at least not at Stage One. They want to know what type of asset it is and they want the data so they can make a decision whether or not to go to Stage Two – the deep dive into the information and the beginning of due diligence.
“One of the investors we are currently working with said, ‘Out of 40-50 deals that I receive in a span of two months, only one goes on to Stage Two. Everything else is deleted!
“Why is this? Because the data is incorrect. Or to be precise, there is no relevant data. The improper format is a consequence of poor data presentation. Without some important pieces of data, how can investors evaluate and at least to go to Stage Two?
“Investors are paying a lot of money to their analysts to scrutinise these deals, and what they are being sent is useless.”
Consorto works differently
Consorto – the European commercial real estate marketplace – employs a different way of working.
“From the very beginning, we decided to have a uniform way of presenting the data. So if an investor receives our fact sheet on – say – a logistics warehouse in Oslo, or a hotel on the Spanish Riviera, they receive the exact same data structure with all the relevant information.
“Of course, that information depends on people putting it in. But we encourage sellers to put in as much information as possible. These are then guarded by Non-Disclosure Agreements.
“When we send investors a fact sheet, they know what to expect. They know the format. They know that we’ve done everything we can to obtain as much information as possible. We are not wasting their time.
“The problem with the European commercial real estate market is that it is not uniform. Anyone can pitch deals. Anyone can send anything, although the UK and Germany is a bit more structured with more regulation. But if you look at entire Europe, it is kind of a ‘wild west’ situation.
“I don’t think that sellers and brokers fully grasp that investors are the ones who are in control because they have the money and in the end, if you don’t have investors, if you don’t have buyers, then nothing is moving.”