- May 07, 2012
Imagine being able to go onto a website, input your requirements for the loan you would like to obtain and the parameters of your property, and automatically obtain a list of lenders who provide financing that match your criteria. Do such websites exist currently in the commercial real estate industry? Now there is a new Internet service, Koss Resource, that seeks to provide such a service—for free—for the benefit of both users and financing suppliers.
Michael Koss, the founder of the website, which is still in beta testing but will go live on at the ICSC Recon show in May 21-23, predicts that Koss Resource will be a “game changer” in the real estate business, no less. Says Samson Lov, founding partner and CTO, “We believe this is market-disrupting technology that has the potential to revolutionize our industry. Koss Resource will do for commercial real estate what Travelocity did for the travel industry.”
The idea for Koss Resource originated with Koss, who has 40 years’ experience in the mortgage brokerage and real estate investment businesses. “One industry that has not entered the Internet age is the real estate business,” says Koss. “There are no great resources for people to find commercial real estate financing today.” Koss says borrowers normally have to subscribe with a local mortgage broker, or try to find lenders using their own research or networking, and even then, they consider only a few lenders. But Koss argues that expanding the number of lenders considered is worthwhile because even shaving half a point from the fee on a loan can save hundreds of thousands of dollars for an owner of a small property, and millions for a larger property.
Koss Resource lists capital sources for a range of commercial real estate, including specialized, difficult to finance, assets such as skateboard parks, says Koss. Borrowers input data such as the type of financing—debt, mezzanine, construction and equity‑that they need. They select among the specific property types under each category of commercial real estate, such as “raw land” under the category of “land” or “bed and breakfast” under the category of “hotels.” They can specify their property’s occupancy level, Debt Service Coverage ratio and desired type of amortization. The website will then provide the corresponding programs and lenders for the loan, informing them immediately of the number of matches.
Currently, about 400 lenders have uploaded their loan criteria to Koss Resource. By the end of the year, the company expects about 1,000 lenders to participate, and ultimately, the universe of about 4,000 capital providers will be listed, predicts Lov. Lenders can manually update their term sheets on the website, in which case the listing is free. Or, for a small fee, they can become premium lenders, and Koss Resource will write a program that will allow their systems to interface with the website to enable automated updates.
Endeavoring to be a total commercial real estate provider, Koss Resource also offers a commercial real estate documents section that provides free contracts, forms and owner-, property- and lender-protective leases. Additionally, a networking section will aggregate jobs from major commercial real estate job boards, and offer a moderated discussion forum and ratings section similar to Angie’s List or Yelp, according to the company.
Koss Resource currently has 35 employees and will grow to 50 by the end of the year, says the company. Lov, who is Koss’ nephew, says that he and Koss have essentially built an in-house software company to execute Koss’s vision. In addition to acting as the inspiration for the creation of the website, Koss’s experience in the commercial real estate investment and mortgage businesses‑in 1981, he had founded his own mortgage brokerage and banking company, Koss Financial‑helps, no doubt, in solving the myriad of problems that can emerge in developing such a service. The website, which Lov says took 19 months to design, will be very difficult for a competitor without backgrounds in the commercial real estate business to recreate in less than several years, he says. “My vision is for people to go onto the site to find all the tools needed to run their businesses successfully,” says Koss.