Commercial property

Fixed fee broker finds CRE

Lew Sichelman

The so-called disruptors have, well, disrupted the housing market. The field is now riddled with discount brokers. Agents aren’t even necessary for owners of 40 major markets who want to avoid the hassle of open houses and back-and-forth sales by selling their places to iBuyers, i.e. instant, institutional buyers. or internet.

Other companies will buy the house you want but can’t afford, then rent it to you until you have enough money to take over the business. And still other outfits will face buyers for their down payments and closing costs, taking a share of the action in return.

Launched just six months ago, Gparency has closed six loans, the largest of which was $20 million, and worked on a number of others, including a $26 million multi-family loan in Chicago; a $40 million industrial property transaction in Lancaster, Pennsylvania; a $21 million deal for a student housing project in Stillwater, Okla.; and a $3 million loan for a retail portfolio in Wheeling, W.Va.

Although founder Ira Zlotowitz describes his completely remote, Zoom-based business as a “100% brokerage,” it’s commission-free. Instead, it assesses the lending process in phases, starting with an annual fee that grants general partners access to Gparency’s database.

“It all starts with a membership instead of a commission,” he explained during the shareholder webinar. “We are a mortgage broker; we just charge differently.

As a Member, General Partners also have access to one of the Company’s Brokers, which the Company calls “Concierges”, who will provide information on rates and terms and make presentations to lenders for any type of transaction.

Beyond the annual subscription, for an additional fee, partners can connect with a broker who will negotiate, underwrite and negotiate a transaction on your behalf, or have them close the transaction through to closing.

“If someone is comfortable doing the business themselves, that’s what we’re aiming for,” Zlotowitz said.

He says the fixed fee program makes sense, if only because more and more general partners are already choosing to go directly to lenders to avoid the commission charged by traditional brokers. Gparency research shows that only 20% of all commercial borrowers still exclusively use brokers. And even less experienced borrowers choose to use only some of the broker’s services to save money, he added.

Zlotowitz doesn’t think he has any competition with his flat-rate model, at least not yet. But, eventually, he thinks everyone will join us. “We are leading a revolution,” he said. “Over time, that’s how people will find commercial real estate.”