Commercial Investment Real Estate May/June 2017 - Page 12

MARKET FOR ECAST Hercules Unbound Blockchain has the power to transform commercial real estate deals. by Sergey Ponomarenko T 10 May | June 2017 Valley, Calif., are using blockchain in residential real estate transactions, and it’s coming quickly to commercial real estate. Unlike LoopNet, CoStar, or other listing sites, this technol- ogy actually allows the transaction to close without all of the red tape. Artifi cial Intelligence Blockchain technology starts with understanding artifi cial intel- ligence and deep neural networks. Without going into the com- plicated details, the principles are decisions based on previous data outcomes, which over time become reliable. Let’s take a commercial property transaction that did not close, for example. The buyer fi nds a property, obtains the price, and receives all the supporting details. To come to a decision, the buyer engages in discussions and negotiations. During all stages of the process, many reasons for the project not moving forward occur. The deal may have fallen through because of price, title, or underwriting. COMMERCIAL INVESTMENT REAL ESTATE he commercial real estate industry operates with a healthy dose of logistics, red tape, and supporting roles. Many of these factors are put in place to protect invest- ments and make sure projects run in a smooth fi nancial and legal fashion. Underwriters, agents, and every position in-between ensures this smooth process. But these roles all will change over the next fi ve years thanks to a piece of technology from the FinTech industry, blockchain. A distributed database, blockchain maintains a continuously growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block. By design, block- chains are inherently resistant to data modifi cations. For example, once the data is recorded, the data in a block can- not be altered retroactively. As a result, blockchains are an open, distributed ledger, recording transactions between two parties effi ciently and permanently. Many of the tech players in the proptech industry in Silicon