The long-awaited guidance document offers flexibility that should encourage participation in the program, boosting commercial real estate in designated areas

How will blockchain impact commercial real estate analysis and brokerage?

The real estate industry can use blockchain or distributed ledger technology to build applications using smart contracts and develop services that bring the benefits of a new technology both to itself and to the mainstream. The main proponents of blockchain for real estate are:

  • more information, available instantaneously;
  • less error, less duplication, less human inefficiency leading to much lower costs;
  • greater transparency (through consensus and distribution) of prices and contracts;
  • potentially reduced transaction times; and
  • greater market liquidity and turnover.

As of today, the main three fields where blockchain dips its toes in Real Estate are:

  1. title transfers,
  2. land registry systems, and
  3. fractional real estate (i.e. asset tokenization)

Let’s look at No.3, tokenization, as it is probably the most disruptive one, and impacts most directly Commercial Real Estate.

Fractional commercial real estate markets will lower the entry barrier and open access to direct CRE investments for anyone with an internet connection.

Blockchain technology and smart contracts are already transforming the way we use the world wide web. As we transit from an internet of information to an internet of value, new and established networks will evolve into decentralized peer-to-peer value exchange markets.

With global commercial real estate valued at roughly 50 trillion USD, fractional CRE is set to become one of the biggest online exchange markets, as tokenization and frictionless trading increase liquidity. This added quality will unlock new value of the underlying asset driving CRE sellers to opt for this route in order to generate higher profits.

The reason tokenization improves liquidity, is because it enables deeper markets. Since tokens are highly divisible and global, the potential number of market participants is substantially higher than what we see today in markets for illiquid assets.

What si Blocksquare?

Blocksquare is a network of fractional commercial real estate properties, where each property is represented by a unique set of tokens i.e. PropTokens. It integrates a decentralized marketplace to buy and sell these PropTokens. A platform allows users to keep track of portfolio performance and communicate with property management. At its core, an application suite enables certified partners worldwide to tokenize CRE properties without tech skill requirements.

Blocksquare is a startup, developing the needed infrastructure for the foreseen fractional commercial real estate market in partnership with Medius Inc. and you are welcome to connect with us through our Telegram community channel.