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CushWake Blockchain Report: Preparing for CRE Industry Disruption Ahead
Blockchain, the $945 million-dollar technology underlying cryptocurrencies, is expected to have a lasting impact on the commercial real estate sector around the globe. Cushman & Wakefield’s latest research, “Blockchain, Bitcoin and Real Estate – Part 2 of the Tech Disruptor Series,” takes a deeper dive into the industries and verticals most likely to transition to blockchain technology in the coming years, and how these innovations will, in turn, impact commercial real estate.
While blockchain is forecast to turn into a billion-dollar industry in the next few years, growing to $9.7 billion by 2021, the report indicates that adoption in the CRE markets is limited. To date, a handful of single-family sales have taken place using cryptocurrency. Though, venture capital expenditure in blockchain technology has exploded. CB Insights estimates $1 billion in funding was raised in 2017.
Cushman & Wakefield’s Revathi Greenwood says, “As of today, blockchain and cryptocurrency adoption in our [CRE] industry is in its early stages, but as with any technology that possesses the potential to essentially redefine how transactions occur in the real estate space, we are paying close attention to it.”
She also notes, “As operational hurdles are addressed, convergence with other technologies grows and questions over scalability are answered, we expect blockchain to influence and impact commercial real estate across several verticals.”
Blockchain technology, also known as distributed ledgers, provides a transparency that many real estate processes lack or do not have access to. At the heart of this technology’s value is transparency and efficiency, which lends itself to a variety of real estate applications from title insurance, due diligence, smart contracts and their supply chain management processes.
Cushman & Wakefield’s Jeff Lessard points out that blockchain technology should result in faster transaction processes, specifically cross border transactions. “This improved efficiency will have numerous financial benefits, including reduction in friction costs of commercial real estate transactions, like fees tied to document preparation and review,” he says.
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