In November 2021, Ira Zlotowitz, founder and chief executive officer of New York-based commercial real estate mortgage assurance brokerage GPARENCY took on challenging goals to increase CRE backed securitization cost efficiency and improve deal transparency for property owners.
By March 2025, GPARENCY facilitated over $250 million in deals, the largest monthly amount since 2021. In April, GPARENCY facilitated $300 million.
Zlotowitz says that is proof the business model works. His new goal is to consistently close $300 million a month. "There are 340,000 CRE mortgages in America, and I would like to do every single one of them," he said.
Zlotowitz is an acclaimed CRE finance veteran known for his forward thinking leadership, ability to set challenging goals and achieve them. Career highlights include driving to $5 billion the book of business at his company, Eastern Union, and before that masterminding Meridian's rise from $300 million to over $2 billion. Thousands of industry observers, bankers, private investors, property owners and peers follow him on Linkedin.
To bring his GPARENCY vision to life he introduced a set of revolutionary industry changes. Securitizations typically close when the volume of CRE loans originated reaches a predetermined pool quota of at least $1 billion, following conventional industry practice. Contracts typically do not issue immediately after origination to avoid small securities. Zlotowitz's goal is to change that, with the benefit of increasing efficiency and reducing risk in between securitizations.
Another novel approach is the broker service fee. GPARENCY charges a fixed, $4,500 rate per deal regardless of the transaction size, upending the commission-based model. By comparison, for a $300 million deal for instance, brokers may charge anywhere from $30,000 to over $200,000 commissions. Zlotowitz recently spoke to Asset Securitization Report about how GPARENCY's securitization strategy is improving CRE financing efficiency one capital stack at a time.
ASR: How do all these measures designed to increase securitization efficiency, including the flat fee, affect investors?
Zlotowitz: People look at what I do and call me the Netflix of commercial real estate finance. The problem I am solving is to increase securitization efficiency and transaction transparency.
We track over 3,400 lenders across the country. Most importantly, we are the only mortgage broker that would shop a deal for a fixed fee, no commissions, no ulterior motive. I structured it this way so all the offers are on the table for us to analyze and advise the client.
There is no Bloomberg terminal to track the CRE space. We built a proprietary app powered by Google Search. Anyone with an Android or Apple phone can connect with me via Linkedin and request to use GPARENCY's app. It features property data, current interest rates for all CRE asset classes, and a free calculator that finds the best possible pricing on a deal.
The securitization market is very fragmented in all commercial real estate. There are so many banks that even the largest mortgage broker would not do more than $30 billion, $40 billion, $50 billion in a random year. If I start doing or controlling all these deals, I can talk to my business partners and say: We'll only take office deals.
Right now small banks and private lenders would have to rely on table funding securitizations to generate liquidity. Deals traditionally are pooled because the entity that holds the $1 billion check does not want to do the $100 million to $500 million deals, they are only interested if you bundle them together.
I am using efficiency to motivate smaller size businesses to close deals at the same time and simultaneously bring all these deals to the billion-dollar investor so they can securitize right away.
Play the cards right and that is the long-term result. Bringing all those securitizations to the market in real time is great for everybody.
Why can't originations of $1 billion immediately close into a securitization? That's my goal.
ASR: More specifically, what is your strategic goal, how do you manage securitization risks?
Zlotowitz: I came up with a strategy that eliminates table funding securitization risk, a significant downside to commercial mortgage-backed security investing. My vision is to ensure we close about the same amount into securitization every month. The time between table funding and securitization is typically a minimum of a couple of weeks.
We tell lenders: In the month of September we will close a securitization. Everything will go straight into securitization so they do not have to wait until they fill up a securitization pool quota -- which solves the table funding securitization risk. That is the change I want to bring about.
Right now, to step into securitization a deal has to be bundled, usually into a $1 billion or more securitization. Why can't originations of $1 billion immediately close into a securitization? That's my goal. If I keep growing and do more deals, I am taking less steps and less risk in between each securitization.
There is no big shop doing $200 billion. My dream, God willing, is to do up to $200 billion per year one day.
ASR: Is this strategy good for everyone, lenders, investment banks, ABS investors?
Zlotowitz: If you're a CRE lender you're trying to get more deal flow to come to you. Why are there so many banks in America? Because there's no centralized deal flow for origination.
If I was doing $10 billion in securitization, I would not have to go to 40 different banks to get it done. I just have to go to two or three that compete with each other. That's it. All business can be done that way. Right now, all the other CRE lenders exist because there is fragmentation in retail originations.
That is the change I am hoping for and I do not know any investors who do not agree. But of course, there's always someone who doesn't like change.
I want to be involved in every CRE loan in America. The future though is tied to artificial intelligence. Soon $4,500 [in fees] per deal will be expensive. There is no big shop doing $200 billion. My dream, God willing, is to do up to $200 billion per year one day.
ASR: You already are considering AI as a factor in the big CRE financing picture. How can it change the relationship between market players and how securitizations are done?
Zlotowitz: Remember that AI is just automation. It's data and automation at everyone's fingertips. The smarter the borrowers the more they will be using it. Today's borrowers go to the bank simply because they need the data, not because they need someone to help them, which is the type of work done by an attorney.
My premise is, I am a professional, pay me like a professional. It doesn't have to be commission based. In general, there may be less sales taking place.
ASR: Is that because deal structuring is never going away?
Zlotowitz: Yes. While humans cannot be replaced, less people will be needed. Not because AI is replacing them, but because employees who stay become more productive and efficient when they use AI.
