When looking for a Calgary home, buyers often do a heap of research into where they’re buying the home.
They’ll look at the builder, the community, the nearby schools and other amenities – and then they make a choice.
Well, banks are making those same kinds of decisions on new communities – before they’re even built.
There had been a void, however, in the data available to commercial lenders when deciding which ones to back. Calgary-based DelveIn Analytics is filling that information gap.
“It actually it wasn’t our idea that the really fortunate part is we had a commercial lender, who came to us and said, ‘hey, I get all this great data today. But here’s the stuff that I can’t get,” said David Allen, DelveIn co-founder and former president, Calgary Land, with Brookfield Residential.
Allen said it’s easier to get the different data points for established communities. Not so much for greenfield development.
“Really, one of the things that (financiers) desired most was opinion,” he said.
They put together a team of people with finance, economy, real estate and technology skills to do the “data scrubbing” for their own unique insights.
“We focus our analysis and our insights on that new stuff, which is tougher to get,” said co-founder Jason Margo.
The information banks seek
If a bank is looking at a new greenfield development, they’re obviously looking at what risks are there before lending the money. Margo said these are deals that are for between $5 million and $10 million typically – so they want to make sure the bases are covered.
Allen said backers are looking for detail like who the home builders are in an area, who’s the master developer, the area risks and development constraints.
“We’re pulling these data points as well as ground-truthing this stuff from our own in-field surveys,” Allen said.
“Where they had good datasets on transactional data, this is more of the qualitative data around the areas that they’re lending into,” he said.
This qualitative data also takes into account the political climate in a city around growth management.
They call it politics and policy.
“They could see that, ‘hey, maybe this area is held up because of some political constraints on policy or growth management or something,” said Allen.
“It doesn’t mean don’t go do the loan. It just means, here’s a data point that you’re going to want to dive in a little bit deeper on.”
Growth and the Platform Calgary Junction program
Allen’s wealth of development industry experience and Margo’s expertise in financial research and logistic paired well together. And while they’ve enjoyed steady growth to this point, they sought out way to scale up their plans.
“What we really appreciated about the Junction program specifically is that it was really focusing on making you an entrepreneur and focusing you on trying to figure out exactly how you scale,” Margo said.
Allen said it helped them identify blind spots within their model and the development of their system.
Both Margo and Allen believe they have a product that, while being fine-tuned in the Calgary market, is applicable to any North American market experiencing suburban growth.
They see the potential for 1,000 licenses to their data in Canada alone. It doesn’t have to be for big city developments, Allen said. The Airdries and Okotoks of the world are ideal target markets where financial institutions need solid data.
The duo, along with fellow partners Linda Rutledge and Ryan Henderson are ready to take their development insight into these other markets.