To read part 1 of this series, check out this post: https://www.coinstaker.com/problems-the-cre-industry-can-address-with-blockchain-technology
★ Problem: crucial CRE data is kept behind closed doors
CRE is known for its reluctance to share industry information. Although the common aim is to achieve greater transparency – because it helps investors to make good decisions – companies are still hesitant to share their data for fear it would backfire.
The need to share the data is very strong, but the need to keep it proprietary is even stronger.
✔ Solution: data sharing on the blockchain
The data stored on the blockchain platform cannot be modified, deleted or commoditized.
This will open new horizons for both brokers and investors, many of whom were (and still are) operating under the narrow geographical constraints of nearby metropolitan areas without access to nationwide market data and lease comparables.
AgentMile will empower brokers and investors to compile a diversified portfolio – both nationwide and internationally – and access a variety of crucial information about lease rates and an overall area index. Ultimately, this will contribute to better location decisions.
★ Problem: a complicated decision-making process
Given the state of existing systems, CRE management teams struggle to make educated decisions quickly. They lack real-time analytics on their performance, industry benchmarks, valuation and cash flow analysis, investment and debt management.
On top of that, a lot of sensitive information (such as lease rates, sales comparables, rental values, etc.) is kept secret by CRE brokerages.
✔ Solution: analyzing data with AI
There’s a better way to have more accurate analysis: AI algorithms can be applied to the data collected and stored on the blockchain.
This opens up amazing opportunities. For example, CRE professionals and investors will get a real-time breakdown of projected revenues based on the current rental values and patterns, detect fraudulent activities before they occur as well as deal with compliance issues early on.
★ Problem: property visualizations are overwhelmingly static
Imagine the task of visualizing a warehouse or a multi-story shopping mall from a few renderings and floor plans to work out whether the building will make money.
For commercial brokers, many challenges arise when they try to provide their clients with a good property walkthrough:
- overwhelmingly, only a static overview can be provided which is very limited;
- investors spend a disproportionate amount of time visiting sites and studying documentation;
- even with complete documentation and/or renovation plans, investors struggle to understand what the property will look like and how it will work once put into use.
✔ Solution: VR walkthroughs
- With VR walkthroughs, it will be easy to picture the full potential of a building as opposed to how it looks at the moment. This is particularly important for branded shops, restaurants, storefronts, etc.
- VR will help brokers engage with a whole new segment of international buyers.
- While traditional renderings provide a static angle, VR empowers investors to tour the entire building. It is also possible to compare different design solutions as VR walkthroughs are very interactive.
★ Problem: a lengthy and complicated leasing cycle with great transaction dependency
Apart from brokers, landlords and tenants, here are some of the other parties involved in a CRE transaction:
- real estate attorneys;
- insurance agents;
- title agents / escrow agents (typically, title agents act as escrow agents);
- contractors (e.g., designers or architects);
- independent auditors;
- third-party reports (e.g., appraisals, land survey, environmental reports, etc.)
- building inspectors, etc.
It’s easy to see then why the CRE experience can be tedious and complicated in the long term.
✔ Solution: Smart Contracts
Smart Contracts will likely become the mechanics behind the CRE leasing life cycle in the years ahead. This means that all payments throughout various leasing stages will be near real-time while most of the paperwork and manual activities will be eliminated.
Even more, Smart Contracts beat traditional systems in at least four areas:
- greater speed;
- lower costs;
- in full view of all parties;
- subject to contract rules.
To find out more and join the next wave of innovation in commercial real estate, visit www.agentmile.com
- AgentMile Announces its ICO - Jun 27, 2018
- Problems the CRE Industry Can Address by using Blockchain Technology [Part 2] - Jun 10, 2018
- Problems the CRE Industry Can Address by using Blockchain Technology [Part 1] - May 30, 2018
- Introduction to AgentMile, a Decentralized CRE Leasing Platform Powered by AI - May 22, 2018
- Giveaway: 1x CB Blockchain Conference Ticket - Mar 17, 2018
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