The real estate investment industry is an inherently dynamic landscape in which companies must constantly adapt to frequently fluctuating market trends and shifting client demands to survive. In an increasingly crowded sector, gaining a competitive edge over the competition to attract more business is a top priority for many lenders. However, this is easier said than done.
One company that stands out from the pack is Churchill Real Estate, a tech-enabled investment management company focusing on investments in the transitional real estate debt market. Originate Report had the privilege of catching up with Travis Masters, Managing Partner at Churchill, to get an in-depth look at how the organization integrates cutting-edge technologies to simplify processes and provide next-level customer service to its rapidly growing client base.
Diversified Capital = Reliable Lending
Efficient and predictable access to adequate financial resources is essential for sustainable lending—a component of the business that Churchill prioritizes to ensure they can continue to grow and scale their operations. “Churchill’s differentiator is our diverse capital and investor base that provides us with a wide range of products from direct lending, whole loan note buying, and A/B structures,” notes Masters. “Our lender finance strategy additionally provides warehouse and term financing on a senior basis that adds an extra dimension to our operations.”
Churchill implements an innovative lending approach premised on ideally located, downside-protected real estate assets and strategic transactions with risk-mitigated capital structures. The team exhaustively analyzes each potential transaction, weighing many factors such as basis, risk-return parameters, and sponsorship. The vertically integrated nature of Churchill enables the company to efficiently consider all investment perspectives across the life cycle of a given transaction—including identifying lucrative opportunities, initial acquisition, re-positioning/development, stabilization, and disposition. Thanks to Churchill’s extensive industry experience in development and asset management, they realize the value of adopting a proactive, hands-on approach in all deals with the end-goal of innovatively unlocking value and fueling asset-level expertise. The results are undeniably effective. “Company growth in 2022 has been tremendous with billions of RTL loans funded this year and we are already expanding our Charlotte office because of this growth,” says Masters.
Harnessing the Tech Edge
In today’s digital era, tapping into technology-enabled adaptations to solve problems and streamline workflows is the standard operating procedure in virtually every industry—the lending space is certainly no different. What makes Churchill unique, however, is their aggressive integration of emergent technologies, such as the blockchain, to provide true value to their customers. “Historically, we have focused our technology development on the investor experience and investor services. Our technology platform covers our entire business from onboarding and underwriting to performance monitoring and investor reporting,” observes Masters. “These have proven extremely productive. We are working on releasing new platform applications to our entire loan and lender finance partners early next year to further increase the quality of the end-product delivered to our clients. We rolled out a seller portal to improve efficiencies when transacting with Churchill on whole loan sales, which allows loan sellers to upload loans, view their pipeline, and monitor the status of their loans.”
Churchill additionally realized that new blockchain-enabled applications could leverage to effectively address critical sticking points that wholesale lenders experience daily and greatly enhance the efficiency of lender-to-lender due diligence, disposition, and settlement of loans. “We invested in a blockchain company and are deploying blockchain-backed applications for our securitizations and our investors, including tokenization of mortgage assets and ledger recording of performance data,” explains Masters.
Churchill generated a record-setting origination volume of $1.25 billion in the first quarter of 2022 alone. The added scalability attributable to the incorporation of a private blockchain-enabled ecosystem will further augment Churchill’s ability to expand their operations within the business purpose lending space and take on even more volume.