As the fixed-income markets begin to make their presence on the Internet, the commercial real estate industry has generally lagged behind. This summer, a new commercial whole loan trading platform will make its debut on the World Wide Web.
FirstLiquidity.com, run by San Diego, Calif.-based parent First Commercial Corp., will be an online mortgage trading exchange, with analytic tools available on the site.
"We're going to have online analytical tools, meaning you don't have to download a spreadsheet and then slice and dice on your on PC with your own analytical tools," said Lance Amano, First Commercial's vice president for e-commerce and project manager for FirstLiquidity.com. "You upload your loans, you can run your analytics right there, find out what your pricing is and what your yield is going to be. And then you can either decide to save it there, or you can send it to us. We'll verify it, and let it go live to the site. So even before it goes live to the site, you can price loans and see what you think you can sell them for."
Using the seven-plus years of experience of buying commercial real estate loans under First Commercial's belt, FirstLiquidity.com hopes to use its parent's broad customer base the company has acquired.
"We're not going out to trade shows and getting 1,000 registered users," Amano said. "We've dealt with 22,000 customers within the last eight years, and we've closed $2 billion in transactions."
With commercial real estate trailing other fixed-income markets in going online, Amano said the market is now ripe to get on board. "The reason why is because it's still done the old-fashioned way," he said. "A bank will call a broker and say I got a $100 million pool to sell, and they'll call 25 to 50 people a day to try to get the word out that things are selling."
The goal of FirstLiquidity.com is to compress the time frame of commercial mortgage transactions, which Amano said can take as long as four weeks.
"We're trying to put buyers and sellers together, and let them get the optimal price for their product by showing it to everybody or expanding the universe of the customer base," Amano said.
The site was previewed at the Mortgage Bankers Association conference in San Diego earlier this month, and the site registered about 250 users. By having a trading platform, the site is set apart from its competitors which are set up similar to bulletin boards, Amano said. The site is expected to be fully operational by the end of the summer.
Honing in on First Commercial's experience in closing loans, Amano added, "We know the ins and outs of what can go wrong and what can go right when you're actually trying to close a loan, so we think there is a market for it and we think people are ready for it.