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Blockchain is Quickly Changing Commercial Real Estate

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CRE blockchain growth

We’re now finding blockchain in in commercial real estate (CRE), too.

Commercial real estate is full of growth

The strong yields, the potential for respectable returns, the reduced volatility, the tax benefits and a bright future are attractive to investors.   In fact, one of the biggest advantages to owing property is that tenants pay you rent.  You pull in monthly, and predictable cash flow from those property investments.

So it’s no surprise its still a hot investment vehicle.

One of the biggest investors in U.S. CRE is Canada.  Just over the last 12 months, it’s secured more than $19.63 billion in assets.  It was one of the top investors in 2017, too.  Even China, Singapore, France and Germany are quickly jumping on the opportunities in the U.S.  As we see further interest overseas, we need to see better transparency in deals along the way, too.

One way blockchain can help is with the smart contract.

According to Block Tribune, “Blockchain can reduce the speed in which the chain of custody regarding CRE properties takes place as a property’s title would be stored on a public ledger. This would remove the need for another central repository, thus reducing transaction, state, city and legal costs. The same principle would apply for leases that would be recorded via blockchain.”

Higher Levels of Trust with Blockchain

It can help create transparent deals, as all facets of a deal would be stored publicly, for example.  That can include information on former owners, construction, and maintenance issues.  In addition, blockchain can help create a paper trail that cannot be changed or manipulated.

With blockchain, every piece of information on a property would be available in the same place rather than in multiple physical and digital domains. Blockchain would also help to eliminate the type of fraud that sometimes exist in the industry as deeds and titles can be counterfeited easily.

Blockchain’s role in commercial real estate can speed up transactions, add transparency, and cut down on the chance for fraud.  In short, it’s speeding up industry growth.

 

 

 

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