Six reasons why blockchain makes sense for commercial real estate: Deloitte

Solutions built around blockchain technology offer several advantages up front, including a censorship-resistant, irreversible distributed ledger. Deloitte’s study revealed blockchain’s position as a perfect fit for real estate use cases around leasing and sales.

Blockchain innovations often surpass traditional systems by not only digitizing information, but also introducing a near real-time trustless environment, among other features. Big Four accounting firm Deloitte uncovered six opportunities for blockchain to disrupt the commercial real estate (CRE) industry.

The infographic above highlights six key pain points for CRE owners when leasing and selling properties and maintaining complex transaction data. With this in mind, Deloitte noted six opportunities for blockchain to serve the industry, which include improving processes around property searches and allowing people to make better decisions around leasing and buying.

Due to paperless processes, Deloitte envisions blockchain to speed up property and payment evaluations and make cash flow management more efficient. In addition, the technology’s inherent qualities also offer cheaper ways to manage property history, while enabling efficient processing of financing and payments.

The study reveals that blockchain technology is well positioned to take over more than 50% of the leasing and sales process, excluding steps that require physical intervention such as property inspections and loan negotiations. Deloitte noted:

“Blockchain appears to be most applicable to dynamically configurable or co-sharing spaces, which have a relatively higher number of tenants and shorter leases.”

While Deloitte’s report confirms blockchain’s potential to drive transparency, efficiency and cost savings for commercial real estate owners, companies and CRE owners are advised to follow a three-step approach—educate, collaborate or create, facilitate—to determine the best path forward for blockchain implementation .

Related: Non-fungible tokens don’t live on the blockchain, experts say

While non-fungible tokens (NFTs) have been touted as blockchain-based technologies, experts dispute the idea.

In a conversation with Cointelegraph, Jonathan Victor, the Web3 storage manager at Protocol Labs, revealed that the main chains are very limited in size, which in turn makes it expensive to store data on the blockchain. As a result, NFT ecosystems often opt for off-chain storage solutions.

Alex Salnikov, the co-founder of Rarible, confirmed the above claim when he told Cointelegraph:

“It’s important to understand that the NFT residing in a user’s wallet only points to the file it represents – the file itself, also known as an NFT’s metadata, is usually stored elsewhere.”

Despite the disclosure, both experts noted that storage for NFTs can still be considered decentralized.