INVESTMENTS

Lev Lending Launches to Vertically Integrate Commercial Real Estate Financing

Lev | February 09, 2022

Lev_Lending_Launches
Lev has launched Lev Lending, the world's first end-to-end digital lending platform for commercial real estate (CRE), to transform the industry's notoriously complex lending process into a surprisingly beautiful digital experience.

Lev Lending is the new direct lending arm of Lev, the CRE financing platform that originated nearly $1 billion in loans via its marketplace in 2021. Lev brings speed and transparency to CRE financing by streamlining the application process with automation and deal management tools for borrowers and brokers, along with powerful financing and closing technologies. Borrowers are automatically matched with the right lender through an intuitive interface.

Lev Lending utilizes Lev's proprietary AI tech and deep industry expertise to rewire the entire CRE financing process from quote to close. The platform will initially specialize in permanent, non-recourse loans on single-tenant net lease (NNN) properties. In its soft launch period, Lev Lending closed multiple million-dollar loans on retail properties such as Dollar General and KFC in as little as 30 days–or as much as 3x faster than traditional lenders.

Over the last decade, most industries have been simplified by technology. Finally, these changes are coming to CRE lending, We're building a platform that not only makes life easier for current investors to get financing, but also simplifies the experience for the lender. It's a win-win for all industry players."

Yaakov Zar, founder and CEO of Lev.

Lev's technology infrastructure allows the company to scale its business nationally and support all asset types. By automating manual tasks, it has changed the way originators, executors and brokers provide support to their clients. As a result of this differentiated experience, the company grew 10x in 2021–its second year in business.

Our goal is to become the nexus of all CRE transactions. Today's commercial borrowers are demanding fast, digital experiences that mirror consumer processes. They want a Rocket Mortgage for their commercial properties. Whether you're a borrower using our marketplace for the best deal, or you're a natural fit for NNN via Lev Lending, we're here with a fast, beautifully-engineered lending experience."

Zar.
 
About Lev
Lev is the commercial real estate financing platform offering fast, transparent access to capital from the world's leading financial institutions. Having closed $1 billion in CRE mortgages in 2021, Lev has grown 10x year-over-year thanks to its proprietary approach to CRE financing, including the industry's only API. Founded in 2019, Lev has raised $40 million from StepStone Group, First American Title, NFX, Canaan Partners, JLL Spark, Animo Ventures and Ludlow Ventures, among others.

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REAL ESTATE TECHNOLOGY

In Just 8 Months, YourHomeHub Powered by MooveGuru Has Already Sold Out 26 States and 28 Regional Territories. And It's Just Getting Started

YourHomeHub | June 01, 2022

In October 2021, a likely source emerged with the first ever property tech franchise—MooveGuru. Through its automated data capture and delivery platforms, MooveGuru has been perfecting the consumer experience during the moving process. In January, the robust platform announced extended support for consumers with services throughout the homeownership lifecycle with a franchise model aimed at real estate service providers in brokerage, title and mortgage. Franchises have been selling faster than homes in red-hot housing markets. To date, MooveGuru has sold 28 regional proptech franchise territories, selling out 26 states in the process. No doubt, our experience and trust in the real estate community and a focused approach in identifying them as a target franchise audience has played a role in the rapid success of initial franchise sales. While a lot of franchises take the approach that anyone can be their own boss, with our organization we've emphasized the value of additional revenue streams for real estate professionals and it's paying off. We've created a buzz the real estate community can't get enough of. It's why we've sold more than half of the states in the U.S. in less than a year." Scott Oakley, CEO of MooveGuru The MooveGuru franchise enables franchisees to deliver a home ownership portal called YourHomeHub that allows homeowners to gain access to preferred local services at a discount. The success comes from being local. YourHomeHub, is the first consumer portal that is "Everything Home," meaning it allows homeowners to manage both the financial details and physical elements of their home. Consumers can monitor extensive information about their home and local market conditions, store important documents, generate accurate estimates for home repairs and find a local contractor for over 1,000 different home service categories. Each YourHomeHub is sponsored by local real estate brands, driving top of mind marketing and revenue from consumer purchases. The platform, provided by real estate professionals, gives a powerful homeowner resource to their customers. "We have expanded our franchise coverage area to 26 states in eight months—this is unprecedented in the franchise industry," said Kathleen Kuhn, President of MooveGuru, who brings more than three decades in the home services franchise industry to the organization. "While there are still opportunities in some major markets, the window is closing for those looking to be regional territory owners." Opportunities are still available for ownership in key markets such as Nevada, New Jersey and Illinois. Franchise owners' trend towards real estate brokerages who have experience with operating affiliate companies, followed by mortgage and title companies. Mortgage brokers typically partner with their top real estate agents for co-branding and split the opportunity fifty-fifty for RESPA compliance. Title companies are offering the service on all their title closings. The franchise pays 10-20 percent of net subscription to franchise owners. The more subscriptions to YourHomeHub and the more leads generated for service pros, the more the franchise owner makes. Recent regional owners include owners in real estate brands such as RE/MAX, Keller Williams, EXP, ERA and also include owners in mortgage and title. About MooveGuru MooveGuru Inc. is based in Roswell, GA. In 2016 the company launched a free mover engagement program to real estate agents and brokers with the idea of connecting home buyers and sellers to convenience and savings on moving services. Using just-in-time delivery through artificial intelligence algorithms, MooveGuru Inc. ensures consumers receive agent-branded savings and convenience from national and local retailers and utility connections as they step through the relocation process. Today, more than 2,000 brokerages, 316,000 agents, and millions of homeowners are connected to the MooveGuru and YourHomeHub platforms.

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REAL ESTATE TECHNOLOGY

National Association of Realtors: Why Industrial Spaces Lead Commercial Real Estate in Bouncing Back From COVID

National Association of Realtors (NAR) | March 28, 2022

Commercial real estate took a hit during the COVID-19 pandemic, as did many industries. But the market is starting to bounce back this year, largely due to increased investments in industrial properties. According to research by the National Association of Realtors (NAR), commercial real estate transactions of less than $2.5 million fell by 1% in the beginning of 2021 and the value of commercial real estate properties fell by 6% compared to 2020. Still, there is hope for the future as certain types of commercial properties are driving sales and seeing positive growth from the year before. Here's a closer look at how industrial spaces are helping commercial real estate bounce back from COVID-19. Spend on industrial properties and land increased Sales for all types of commercial real estate decreased in 2021, with the exception of three categories: land (+3%), industrial warehouses (+2%), and industrial flex spaces (+1%). That means, while businesses were shying away from commercial real estate lending for apartment buildings, offices, retail shops, and hotels, they were still spending money on industrial properties and land on which they could build their own structures. Prices rose for industrial properties, land, and apartments The number of commercial real estate transactions may have dropped, but sales prices increased by 2% on average. Specifically, prices for land increased by 6%, industrial flex spaces and warehouses by 5%, and certain types of apartment buildings by 5%. Meanwhile, sales prices declined for retail shops, offices, and hotels. Industrial and residential construction projects grew Commercial development projects are also on the rise for industrial and residential properties. Construction activity is up 1% from last year with a whopping 12% jump in construction for industrial warehouses, a 6% increase for industrial flex spaces, and a 6% growth for certain types of apartment buildings. Vacant malls, for example, are being converted into new types of commercial spaces, such as mixed-use buildings for residential, retail, and office purposes, as well as industrial buildings for distribution and fulfillment processes. Construction activity for retail spaces, offices, and hotels, on the other hand, dropped. Survey respondents noted certain obstacles to reaching their construction goals, including accessing materials, obtaining permits, and hiring workers. Office real estate activity shrunk due to remote work Office spaces, in particular, saw a decrease in real estate activity, largely due to an increase in remote work during the pandemic. Even though some people are heading back to the office, vacancy in these spaces continued to increase, reaching 16.4% from 13% in 2021. What's more, 70% of survey respondents said their companies are moving into smaller offices. Vacancy in industrial properties, however, declined to 4.9%. 2022 promises more growth This year may continue to be rocky for the commercial real estate market, with industrial and land investments pulling their weight. Specifically, businesses predict a 5% increase in land sales, a 3% increase in industrial warehouse sales, and a 1% increase in sales of certain types of apartments. By 2022, however, commercial real estate activity is expected to recover across all categories as more businesses reopen, travel resumes, and people return to the office. Still, sales for land and industrial properties are expected to lead this recovery process, proving their value as part of the commercial real estate market.

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REAL ESTATE TECHNOLOGY

KKR to Acquire Leading Japanese Real Estate Asset Manager from Mitsubishi Corporation and UBS Asset Management in a Strategic Transaction

KKR | March 17, 2022

KKR & Co. Inc., Mitsubishi Corporation and UBS Group and UBS AG announced the signing of a strategic transaction by a subsidiary of KKR, which is acquiring all of the outstanding shares of Mitsubishi Corp.-UBS Realty Inc. from Mitsubishi and UBS Asset Management in an all-cash transaction valued at JPY230 billion (US$2 billion). MC-UBSR is one of the largest real estate asset managers in Japan. Founded in 2000 as a joint venture between Mitsubishi and UBS-AM, MC-UBSR is a pioneer in the Japanese real estate investment trust (J-REIT) segment. Today, it is one of the largest real estate asset managers in Japan with JPY1.7 trillion (US$15 billion) in assets under management.2 The business has approximately 170 dedicated professionals managing two Tokyo Stock Exchange-listed REITs: Japan Metropolitan Fund Investment Corporation (JMF) and Industrial & Infrastructure Fund Investment Corporation (IIF). JMF, with approximately JPY1.3 trillion (US$11 billion) in assets under management as of August 31, 2021, invests in retail, offices, hotels and other assets located in urban areas. IIF, with approximately JPY 0.5 trillion (US$4 billion) in assets under management as of January 31, 2022, focuses on industrial and infrastructure properties in Japan. Both REITs have established environmental, social, governance (ESG) programs and are included in the MSCI Japan ESG Select Leaders Index. Mitsubishi and UBS-AM showed us unwavering support over the years, enabling MC-UBSR to become Japan’s outright top J-REIT manager. We are excited to welcome KKR, which brings significant resources and relationships to MC-UBSR, and is well-placed to work with our experienced team to extend our long and successful track record of delivering strong results for the unitholders of JMF and IIF and take the business to the next level.” Katsuji Okamoto, President & CEO and Representative Director of MC-UBSR “Japan is one of the most important and high-volume real estate markets in the world, and is a market we have been dedicated to investing in with a local team since 2006. MC-UBSR has an excellent track record of serving investors across its REIT offerings and a strong commitment to enhancing its investments through a strategic approach to ESG. We look forward to working with and supporting a team that has served investors so well over the last two decades, and we anticipate that our combined strengths will further enhance MC-UBSR’s ability to deliver for new and existing clients and unitholders,” said Hiro Hirano, CEO of KKR Japan and Co-Head of Asia Pacific Private Equity at KKR. Takuya Kuga, Group CEO-designate, Urban Development Group of Mitsubishi, said, “We are pleased to have supported MC-UBSR’s development and operations over these past 20 years, and are proud to have grown MC-UBSR into Japan’s leading REIT manager. Mitsubishi continuously strives to optimize and strengthen its business portfolio, and will continue to expand its real estate development and asset management businesses in Japan, led by its wholly owned subsidiaries, Mitsubishi Corporation Urban Development, Inc. and Diamond Realty Management Inc, along with accelerating its initiatives in overseas real estate and large-scale urban development/management business. Welcoming a high-caliber real estate and diversified investment firm like KKR is a major endorsement of MC-UBSR, its team and its business, and we look forward to working with KKR and MC-UBSR.” Suni Harford, President of UBS Asset Management, said, “In partnership with Mitsubishi, we are proud to have developed MC-UBSR into a leading real estate platform in Japan. We are confident that KKR is well placed to take this business forward and wish the MC-UBSR team every success for the future. The Japanese market remains a cornerstone of our Real Estate & Private Markets business in Asia Pacific, and we remain focused on serving the needs of our clients and capturing growth opportunities in this strategically important region. Through our rapidly growing real estate investment unit, UBS Japan Advisors, we will continue to advise our clients on Japanese property investments.” UBS’s asset management, wealth management, and investment banking businesses operating in Japan are unaffected by the transaction. About KKR KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. About Mitsubishi Mitsubishi Corporation is a global integrated business enterprise that develops and operates businesses together with its offices and subsidiaries in approximately 90 countries and regions worldwide, as well as a global network of around 1,700 group companies. Mitsubishi has 10 Business Groups that operate across virtually every industry: Natural Gas, Industrial Materials, Petroleum & Chemicals Solution, Mineral Resources, Industrial Infrastructure, Automotive & Mobility, Food Industry, Consumer Industry, Power Solution and Urban Development. Through these 10 Business Groups, Mitsubishi’s current activities have expanded far beyond its traditional trading operations to include project development, production and manufacturing operations, working in collaboration with our trusted partners around the globe. With an unwavering commitment to conducting business with integrity and fairness, Mitsubishi remains fully dedicated to growing its businesses while contributing to a prosperous society. About UBS UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. UBS is the largest truly global wealth manager, and a leading personal and corporate bank in Switzerland, with a large-scale and diversified global asset manager and a focused investment bank. The bank focuses on businesses that have a strong competitive position in their targeted markets, are capital efficient, and have an attractive long-term structural growth or profitability outlook. UBS is present in all major financial centers worldwide. It has offices in more than 50 regions and locations, with about 30% of its employees working in the Americas, 30% in Switzerland, 19% in the rest of Europe, the Middle East and Africa and 21% in Asia Pacific. UBS Group AG employs more than 72,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE). In Japan, the firm offers corporate, institutional, and high net worth private clients a full array of financial products and services through five business entities: UBS Japan Securities Co., Ltd., UBS AG Tokyo Branch, UBS SuMi TRUST Wealth Management Co., Ltd., UBS Asset Management (Japan) Ltd., and UBS Japan Advisors Inc.

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REAL ESTATE INVESTMENT

Heartwood Real Estate Group launches in Austin, Texas

Heartwood | February 24, 2022

Today, Heartwood Real Estate Group is excited to announce its official launch with several innovative projects totaling more than 1,000 residential units in the Austin, Texas area. Heartwood will develop and build a wide variety of assets, ranging from luxury single-family residences and townhome communities to workforce and affordable apartment communities. Heartwood is dedicated to solving Austin's real estate crisis by providing homes for all residents and strengthening the city's well-loved neighborhoods and communities. Heartwood's team is led by president and founder Chris Affinito, who brings more than a decade of experience in a variety of real estate and development sectors, including acquisitions, development, structured finance, valuation, and sales. Dan O'Dea, President of Delphi Affordable Housing Group, serves as Heartwood's advisor and as lead investor through his family office, DAHG Capital Partners, LLC. Dan brings over 40 years of experience in affordable housing development, structured finance, and private equity. Heartwood's initial project, The Reyna, is already under construction. Estimated for completion in 2023, this luxury, boutique townhome community is just a stone's throw from the many funky bars, restaurants, shops and cafes in the vibrant South Congress corridor. Heartwood is also spearheading a new development on Springdale Road in East Austin. Currently in pre-development, this 344-unit mixed-use community will participate in the City of Austin's Affordability Unlocked program, reserving half of its 344 units for families earning 60% or less of the area's median family income (MFI). Austin home prices rose 30% in 2021, while rents rose by 25%, both of which were among the highest rates in the nation. At Heartwood, we're committed to helping residents face the challenges of this housing crisis through our creative and meticulous approach to real estate development." Affinito. Our goal is to make Austin both affordable and beautiful as it grows, with 50% of our developments featuring substantial affordable housing components." co-founder and Director of Operations Mackenzie McCauley. Heartwood leverages close relationships with local consultants and partners, as well as in-depth knowledge of Austin's housing market and development process, to tackle complex projects others tend to overlook. Heartwood aims to help Austin solve its affordability crisis by making a substantial contribution to the city's critically insufficient housing supply.

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