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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

Commercial and Corporate Real Estate Cyber Risk - Developing a Comprehensive Strategy - 10/25/2018

Hardly a day goes by that we don’t hear about a Cyber breach. The most recent of scale was Equifax, the credit reporting agency in which credit information of 143 million of its clients was breached. While most of the incidents we hear about involve data or financial theft, there is a looming threat…our built infrastructure. This infrastructure includes everything from power plants to dams, but also includes the millions of buildings we use every day to work, shop, learn, recreate, manage our health and more. The threats range from unwanted building access to pirating of video surveillance and everything in between. This webinar will focus on the entire spectrum of Commercial and Corporate Real Estate cyber challenges, solutions and strategies.

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Jim Young Realcomm
Jim Young Co-Founder & CEO Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on techno
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Jim Young
Co-Founder & CEO
Realcomm
LinkedIn

Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.

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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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Sandy Jacolow Meridian Capital
Sandy Jacolow CIO As CIO at Meridian Capital, Sandy Jacolow oversees the firm’s nationwide innovation and technology initiatives that support the company’s brokerage, i
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Sandy Jacolow
CIO
Meridian Capital

As CIO at Meridian Capital, Sandy Jacolow oversees the firm’s nationwide innovation and technology initiatives that support the company’s brokerage, investment sales and retail leasing businesses and growth activities.

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Annette Prater Brookfield Properties
Annette Prater SVP, CIO
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Annette Prater
SVP, CIO
Brookfield Properties

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Ron Victor IoTium
Ron Victor Founder & CEO Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune
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Ron Victor
Founder & CEO
IoTium

Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune 1000 technology companies. To-date he has enabled raising more than $30Million in start-up capital for multiple start-ups in silicon-valley. Ron has founded and led three companies to-date with successful exits. His latest venture is IoTium Inc. – a Silicon Valley start-up that provides a secure, cloud-managed, easy-to-deploy software defined network infrastructure for all IoT verticals.

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Coleman Wolf Environmental Systems Design
Coleman Wolf Security Practice Leader Coleman Wolf has extensive experience developing enterprise-wide access control and alarm monitoring systems, developing business analyses, and conduc
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Coleman Wolf
Security Practice Leader
Environmental Systems Design

Coleman Wolf has extensive experience developing enterprise-wide access control and alarm monitoring systems, developing business analyses, and conducting detailed security surveys and assessments of corporate offices, power generation plants, and facilities related to national critical infrastructure. Coleman has also managed numerous security system installation and upgrade projects. He holds a Master of Science, Computer Information Systems degree from Northwestern University and a Bachelor of Science, Electrical Engineering degree from the University of Michigan. He is also CPP (Certified Protection Professional) and CISSP (Certified Information Systems Security Professional). Coleman also holds the following Professional / Civic Affiliations: ASIS (Member of American Society for Industrial Security), Chairman of the ASIS Information Technology Security Council, and is an active member of the ASIS Security Architecture and Engineering Council.

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Wade Hughes 5Q Partners
Wade Hughes CEO
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Wade Hughes
CEO
5Q Partners
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Don Goldstein AdKahn
Don Goldstein CEO
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Don Goldstein
CEO
AdKahn

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Malcolm Hobbs VP Marketing & Market Development
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Malcolm Hobbs
VP Marketing & Market Development
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