We’re now finding blockchain in Commercial Real Estate, too.
Commercial Real Estate is growing rapidly
Strong yields, the potential for respectable returns, reduced volatility, tax benefits, and a bright future are attractive to investors. In fact, one of the biggest advantages to owning property is that tenants pay you rent. Therefore, these property investments provide a predictable monthly income.
It is no surprise that real estate is still a desirable investment
One of the biggest investors in U.S. Commercial Real Estate is Canada. Just over the last 12 months, the country secured more than $19.63 billion in assets. Canada was one of the top investors in 2017 as well. Even China, Singapore, France and Germany are quickly seizing real estate opportunities in the U.S. Considering increased interest from other countries, improved transparency in deals becomes a necessity.
One way blockchain can help is with smart contracts.
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 can benefit the Commercial Real Estate industry
Blockchain technology can help create transparent deals, since all facets of a deal would be stored publicly. This can include information on former owners, construction, and maintenance issues pertaining to the specific Commercial Real Estate. In addition, the blockchain can create a paper trail that cannot be changed or manipulated.
With blockchain technology, all the information relating to a property will be available in a single location rather than in multiple physical and digital domains. The blockchain will also eliminate the fraud that sometimes exist in the Commercial Real Estate industry since deeds and titles can be counterfeited easily.
The blockchain’s role in the Commercial Real Estate industry is that it can speed up transactions, add transparency, and reduce the chance for fraud. In short, it’s speeding up industry growth.
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