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If at some point in the near future — say the 2030s or 2040s — when brokers are a less well-populated part of the commercial real estate landscape, we might blame Lev, the digital financing platform for CRE transactions, as being a catalyst for the change.
On Tuesday, Lev co-founder and CEO Yaakov Zar launched Lev AI, a pair of automated commercial real estate deal-making tools that aim to augment the firm’s Lev Match digital marketplace for sponsors and lenders, which was launched in May 2023.
Lev’s Deal Room AI is an original tool that uses artificial intelligence to automate deal flow materials, while the firm’s Ask AI is an AI-based chat-bot programmed to answer the questions lenders usually pose as they evaluate deals.
“The world of commercial real estate finance is extremely opaque and broker-driven, where there’s a handful of players and transactions that see themselves as essential to getting a deal done,” explained Zar, in an exclusive interview with CO. “But, really, it’s a world of relationships, relationships between borrowers and lenders, and our focus is on creating a platform to help facilitate those relationships.”
Since founding Lev in 2019, Zar has already used machine-learning technology to facilitate lender-sponsor matching and to help lenders and sponsors identify certain aspects of each others’ business. But with the large language model tools released in the last year — most notably Open AI’s ChatGPT — Zar said it was time for his firm to further improve the CRE transaction process.
“When a sponsor is going out to market for financing, they need to put together an offering memorandum, a deal book, and that process is really time consuming,” said Zar, who noted sponsors need to research market trends, organize the data, clean it up and present their findings as a Powerpoint or PDF. “That takes a lot of time and is really, really difficult, especially to bring in the right sources of information.”
Over the last several months, Zar’s 15-person team of engineers developed the firm’s AI deal book generator: an online tool that serves as an all-in-one organizer and generator of deal materials.
Any deal-related documents, from offering memorandums sent by an investment sales broker to underwriting data filed through pages of Excel spreadsheets, can be organized by Lev’s Deal Room AI and turned around into a fully organized presentation within 10 minutes, according to Zar.
Lev’s Ask AI will provide lenders with an easy way to review the deal as they prepare to issue term sheets and get typical questions — like, what is the building’s leasing activity in the last five years — answered almost immediately by Lev’s AI-trained bot. Ask AI will source information from existing deal documents and third-party data sources to provide verified answers for lenders.
“Our focus is to help make it easier for lenders to find critical pieces of information,” said Zar.
Zar noted that Ask AI will always provide the sources of the information generated in any answer, which will protect lenders and differentiate the app from other AI-based learning tools.
“If you ask Chat GPT, ‘How old is President Obama?’ it gives you the answer, but it doesn’t tell you the source, and that’s a really dangerous thing in commercial real estate, especially when you’re a lender and you’re trying to do underwriting and make sure the facts are all correct,” he said.
Zar added that he hopes Deal Room AI and Ask AI will make Lev Match the go-to source for sponsors and lenders to not only find each other in the marketplace, but also to complete their deals without the need of traditional broker services from firms such as JLL (JLL), Cushman & Wakefield (CWK) and CBRE (CBRE).
“Our biggest competition is human brokers who have human relationships, and our focus is to allow sponsors to do the transaction process themselves,” said Zar. “Usually you have to hire a broker to put together this material, or a sponsor puts it together, and in our case the sponsors are able to do it all themselves. They don’t need anyone else.”
Brian Pascus can be reached at bpascus@commercialobserver.com
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