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Blockchain Technology is Coming: Is the World of Real Estate Ready?

As cryptocurrency speculators have ridden the Bitcoin wave up (and down) over the past year, a different group of global professionals has come to realize the potential benefits of this technology: real estate investors, developers, operators, and service providers. Their shared cautious optimism has very little to do with the rise or fall of cryptocurrency prices, but instead comes from the promise of the underlying technology that fuels Bitcoin and its offspring: the Blockchain.

A Blockchain is a type of distributed ledger. This means that every participant has his or her own copy of the ledger and there is no central record of account. Once recorded, ledger transactions cannot be altered and every copy of the ledger is identical across the network. The network and all constituent parts act as a database that records transactions – generating an immutable audit trail for transactional activity. The network can be either completely open or open only to trusted counter parties.

What benefits could Blockchain provide to players in the Real Estate industry? Here are three areas that suffer from efficiency problems where Blockchain technology could be an effective solution:

Real Estate Documentation
Currently, the majority of real estate documentation required and used for transactions (deeds, rental agreements, titles, mortgage documents, etc.) is in paper form and come from various third parties, opening these transactions to the risk of potential forgery and providing opportunities for fraud. System efficiency is low, manual errors happen often, and record keeping is open to theft and human error.

A Blockchain land registry platform would eliminate multiple third party intrusions and mitigate fraud by streamlining participation and authenticating data/documents. The Swedish National Land Survey has created a proof-of-concept to investigate how Blockchain technology may reduce the manual errors while transferring documents.

Leasing and Technology
In owning and managing a commercial or residential property there are a multitude of service and payment transactions that must occur between the lessor, lessee, and other third parties. Cash flow, appreciation, and tax information must be tracked, recorded, and verified, and compliance maintained. Therefore, managing properties and tenants, and enforcing the agreements around lease terms requires a better platform for consensus and reference as well as payments.

Smart contracts on Blockchain can structure secure cash flows and automate payments with real-time reconciliation. Smart contracts can also enable split ownership and distributed rents. The City of Rotterdam has teamed with Deloitte to achieve data driven city management, beginning with a prototype for recording lease contracts on the Blockchain utilizing smart contracts.

Purchase Process
Property research requires a significant amount of time where financials and legal regulations are concerned. A large part of this effort is finding and verifying physical proofs of identity, ownership, etc. Since this is a manual task, the process is time consuming and human error and data loss easily occur. Searching for properties, vetting, and entering into terms of sale is an extensive and unnecessarily complicated effort that can discourage investment.

An MLS built on a Blockchain would enable more accessible and comprehensive listings with better data control and verified historic records through a peer-to-peer network. In addition, by building unique digital identities for each property on a Blockchain, key information such as financials, owner history, vacancies, etc. would be readily accessible on demand. ABN Amro has begun a pilot with IBM to develop a system in which buyers, sellers, brokers, and regulators may share and record real estate transactions while supporting connectivity with regulatory bodies such as the central bank and Land Registry Office.

Although still in the early stages of development and testing, Blockchain technology progress is gaining steam, and real estate professionals will be rewarded for getting on board sooner rather than later.

What should you look for at your company to evaluate if implementing a Blockchain is the right solution?

Shared Data: Blockchain is a technology for shared databases – there is a need for a structured repository of information.
Opportunity for Disintermediation: Blockchain removes the need for trusted intermediaries – no gatekeeper is required to verify transactions and authenticate the source.
Multiple Writers: Blockchain is a technology for databases with multiple writers – multiple entities generating transactions that modify the database.
Absence of Trust: Blockchain is a technology for multiple non-trusting writers – there needs to be a level of mistrust between the entities writing to the database.
Transaction Dependency: Blockchain provides value when there is interaction between the transactions created by the writers, meaning the transactions depend on one another.

Emerging technologies that impacts commercial and corporate real estate such as Blockchain, Immersive/AR, AI, Autonomous Vehicles, Robots and Drones are topics that will be discussed at Realcomm | IBcon 2018, which will be held on June 6-7 (Precon: June 5) at The Cosmopolitan of Las Vegas. For more information, visit Program Details: Realcomm | IBcon

Kevin Shtofman, Real Estate Practice Manager, Deloitte
Kevin Shtofman is a Manager in the Real Estate practice of Deloitte Consulting. He has over 14 years combined experience in providing strategic, financial, accounting, business improvement, and technology services to clients in the Real Estate industry. Kevin’s focus includes providing operational and systems integration services to owners, operators, developers, and construction servicers of real estate. He is a recognized leader in providing strategic planning, business process improvement, systems integration, solution implementation, merger integration, asset management, and program/project management services.

This Week’s Sponsor

ESD is a leader in Improving Society Through the Built Environment. It creates solutions that produce economic, environmental and experiential benefits for its clients, many of whom are the biggest names in the worlds of business, technology — and beyond. The company is in the forefront of developing Intelligent Buildings. For more information, please visit www.esdglobal.com.

Realcomm News

The energy and enthusiasm for this year’s 20th Anniversary event is unprecedented! We hope you will be joining us and hundreds of the best and brightest real estate industry professionals as we celebrate 20 years @ the Intersection of Commercial and Corporate Real Estate, Technology, Automation and Innovation.

This year’s Business Solutions & Intelligent Building Expo will feature 140+ real estate technology companies showcasing the latest industry-specific solutions and services. It will be two days of continuous product demonstrations and networking. If you have even one technology decision to make this year, don’t miss this opportunity to find the latest best-of-breed solutions – under one roof! Click here for a list of Realcomm | IBcon 2018 Solution Providers

UPCOMING REALCOMM WEBINARS

The Cloud, IoT, Sensors and More – The NEXT EVOLUTION of Smart Connected Buildings - 4/4/2019

The concept of smart buildings has been around for decades. What’s different now are the multiple generations of technology we have seen throughout the years. At first ‘building automation’ was proprietary and single-source, next came ’connected’ buildings which introduced us to the internet. Today, next-level thinking includes an expanded use of the cloud, the inclusion of non-traditional smart edge devices found within the Internet of Things (IoT), sensors, as well as integration into ERP’s other single purpose solutions and multiple telecommunication platforms. While the benefits of a smart connected building are great, the path to success is elusive. This webinar will feature the industries’ most accomplished smart building experts.

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Tom Shircliff Intelligent Buildings
Tom Shircliff Co-Founder Tom Shircliff is a co-founder and principal of Intelligent Buildings, a nationally recognized smart real estate professional services company that was
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Tom Shircliff
Co-Founder
Intelligent Buildings
LinkedIn

Tom Shircliff is a co-founder and principal of Intelligent Buildings, a nationally recognized smart real estate professional services company that was started in 2004. Intelligent Buildings provides planning and implementation of next generation strategy for new buildings, existing portfolios and urban communities. Tom is a speaker and collaborator with numerous universities and national laboratories, a gubernatorial appointee for energy strategy and policy and founding Chairman of Envision Charlotte, a Clinton Global Initiative.

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Kathy Farrington Google
Kathy Farrington Technical Program Manager
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Kathy Farrington
Technical Program Manager
Google

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Paul Maximuk Ford Land Energy
Paul Maximuk Energy Manager Paul Maximuk is Energy Manager for Ford Land Energy where he is currently is providing project and program technical guidance to implement global met
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Paul Maximuk
Energy Manager
Ford Land Energy
LinkedIn

Paul Maximuk is Energy Manager for Ford Land Energy where he is currently is providing project and program technical guidance to implement global metering of electric, natural gas, steam, water and compressed air systems. He is an Energy Engineer with over 30 years of experience in the HVAC/BMS field. He is an SME specializing in building management and energy reduction. Paul has focused his efforts in large industrial facilities but also has equal expertise in Class A buildings. Additionally he is a problem solver finding the root cause of why mechanical systems do not operate at their peak efficiency.

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Gordon Echlin Triacta Power Solutions
Gordon Echlin Vice President Marketing and Business Development Gordon Echlin is Vice President Marketing and Business Development for Triacta Power Solutions LP, where he has been a management team member since 20
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Gordon Echlin
Vice President Marketing and Business Development
Triacta Power Solutions

Gordon Echlin is Vice President Marketing and Business Development for Triacta Power Solutions LP, where he has been a management team member since 2009. Prior to Triacta, Gordon was a partner for a boutique venture capital firm, Venture Coaches from 2006 to 2009, and started a telematics company, Netistix Technologies, in 2002.

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Chris Fine Aruba
Chris Fine Senior Strategist, Workplace Innovation As a Senior Strategist for Aruba, a Hewlett Packard Enterprise company, Chris Fine is focused on Aruba’s Smart Digital Workplace initiative. The Smart
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Chris Fine
Senior Strategist, Workplace Innovation
Aruba

As a Senior Strategist for Aruba, a Hewlett Packard Enterprise company, Chris Fine is focused on Aruba’s Smart Digital Workplace initiative. The Smart Digital Workplace combines Aruba’s industry-leading networking technology and a growing ecosystem of partners in technology, real estate, smart furniture, and other specialties, to drive the growth of new experiences for end users and managers in the next gen Smart Office.

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Rick Szcodronski cohesionIB
Rick Szcodronski Chief Technology Officer Rick has more than ten years of experience in technology and intelligent building engineering. Prior to cohesionIB, Rick served as the Senior Practice
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Rick Szcodronski
Chief Technology Officer
cohesionIB

Rick has more than ten years of experience in technology and intelligent building engineering. Prior to cohesionIB, Rick served as the Senior Practice Leader at Environmental Systems Design in the Intelligent Building group. He led the technical design of global intelligent building and smart city projects in cities around the globe. He is passionate about designing digital solutions for the built environment that improve the experiences people have and foster the culture around them.

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Anne Hardy Join
Anne Hardy CSO Anne is a high-tech executive with broad experience, starting from software design, architecture, cybersecurity, to managing teams to release telecomm
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Anne Hardy
CSO
Join

Anne is a high-tech executive with broad experience, starting from software design, architecture, cybersecurity, to managing teams to release telecommunications and enterprise software, building and leading research labs, managing developer relations, and initiating and driving cultural changes. She worked for over 10 years at SAP successively as Director of Security and Trust Research, VP of Platform Research and VP of Developer Advocacy. More recently she co-founded and became the CEO of Workrize PBC.