Thursday, August 2, 2018

3 Ways Blockchain Is Impacting CRE

1. Smarter and more transparent transactions

One of the biggest impacts that blockchain could have on the commercial real estate sector would be expedited deals, thanks to a faster and smarter process of contract management. Like the name implies, smart contracts are when every portion of a lease or sales agreement is automated and when payments are received in real time, even beyond normal business hours. These smart contracts offer numerous benefits, providing additional peace of mind with built-in transaction instructions and increased transparency to all parties. Further, blockchain helps to reduce the risk of payment disputes  and speeds up pre-leasing due diligence and the background check process.
Blockchain would make it possible to essentially cut out the intervention from a middle man, allowing users to create and edit contracts immediately and in real time, all around the world.

2. Liquidity

For those investors who are trying to cultivate a diversified portfolio, it can be difficult to liquidize assets. Blockchain technology has the ability to make this process easier and more seamless; if all investments are properly registered in the ledger, exchanging shares among investors instantly becomes more simplified.
Blockchain enabled trading platforms for illiquid real estate holdings have the potential to breathe new life and viability into previously restricted aftermarkets, by increasing liquidity and ease of access for investors. This can possibly reshape the face of a traditionally dislocated network of real estate brokers, investors and sponsors as we know it, transforming it into a more dynamic and fluid marketplace.

3. Land titles

Another way that blockchain technology is impacting CRE is its innovative use in recording land titles. With most of this information kept offline, this area has always been notoriously challenging to access. But blockchain stands to change this drastically, cutting the historically lengthy process of recording and/or transferring titles – with the additional benefit of increased transparency.
It would be an understatement to say that we have just begun to scratch the surface of blockchain technology and all that is has to offer commercial real estate, among other industries. When expanded to other applications and uses, the sky’s the limit for what blockchain can do. Of course, as with any emerging technology, blockchain has its critics, with questions and concerns being raised over the technology’s reliability and security. However, with continued and more widespread use, these issues are expected to resolve, and the technology will help lead the way in streamlining the traditionally cumbersome commercial real estate industry.

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