Trepp LLC and The Rockport Group have teamed up to provide commercial real estate lenders, investors and servicers with a tool to assess their entire exposure to the product, whether it be in the form of on-book senior loans, mezzanine debt, commercial mortgage-backed securities or in equity.
The new venture is called TreppPort and its product is currently available for users. The technology is delivered as software as a service, available to clients over the Web.
Rick Trepp founded both companies, and is still on the board at Trepp although not involved in its day-to-day management. He is the chairman of Rockport.
The problems in the real estate market over the past six to seven years showed the need for this type of product, he said. The combination brings together institutional knowledge and market data.
Trepp has a database of 150,000 loans, but its CEO Annemarie DiCola pointed out TreppPort will eventually add information from other third-party providers as well into the platform. Trepp said this would include things like environment data and other types of risk and market data, things that make sense not only from an origination point of view, but from a surveillance and asset management point of view as well.
There is a full-audit trail as part of the system so it can assist with compliance.
DiCola further explained, “Previously, clients had to build their own internal models and databases or outsource the integration and build. Those options were silo-specific, costly to develop, maintain and keep consistently updated with deal, loan and property information.”
Trepp added that when the problems with the real estate industry took place, because the information resided in silos, “institutions found it very hard to know what their total exposure was.”
There is also a new appreciation by institutions about their own data and what that data could be telling it about its proper management of risk. The problem was the institutions getting their arms around that data, DiCola said.
Add into that increased reporting requirements for investors and regulators (on both the banking and life insurance sides) on commercial portfolios.
TreppPort is described as an end-to-end solution. The product can be used to underwrite and analyze loans. Trepp said originators can see data on how other loans in the same locale are performing and what the trends are, whether the market is strengthening or weakening.
There is a lot of market information inherent in the Trepp database that can be used when originating, he said.
“It is a combination of both looking at the asset on its individual merit but also having the ability to compare it to market data as well. And, because that asset is in a repository with the institution’s other real estate assets, it’s an opportunity to compare that assets on a relative basis to other like assets or dissimilar assets within the same CRE set,” DiCola said.
The platform is available as an additional service for Trepp and Rockport users, plus it can be used by those who don’t subscribe to those offerings.
There is no minimum or maximum size portfolio that is needed to use the system, with Trepp adding that the increased reporting requirements are a greater burden on the smaller lenders.