BOSTON—Consumers often speak glowingly about new innovation, but business leaders know the value comes in its application. The much talked about blockchain technology not only creates a secure ledger for commercial real estate properties, but it also can standardize data and create interoperability between uncommunicative real estate parties or platforms. GlobeSt.com spoke to Kevin Maggiacomo, CEO and President of SVN International Corp. (SVN), a Boston-based full-service CRE advisory firm, to get his take on the new tech and how CRE companies can turn the blockchain buzz into bona fide benefits.
“If you ask any real estate agent today what challenges they face with technology, it’s that they don’t communicate with each other,” said Maggiacomo. “They operate in silos with near zero interoperability between systems, like property data and lead management. The blockchain changes all of that and connects disparate applications together, allowing agents to focus on closing deals – and not on application management. Further, the majority of the brokerage community is accustomed to working within a system where there is no data transparency or standardization. Blockchain provides for that standardization and with it comes the potential for smart contracts and the streamlining of the transaction process.”
While CRE is not known for being forward-thinking, SVN is making the leap with the goal of moving all of its data to a secure blockchain database hosted by Imbrex.io. “We understand that many in the CRE industry are claiming that blockchain is nothing more than a hammer looking for a nail right now,” says Maggiacomo, “but at some point, our institutional clients are going to demand it. Most innovations stem from a client demand, and we want to make sure our Advisors and business systems are future-proofed.”
Why would CRE clients insist on blockchain? Maggiacomo believes it revolves around clients’ increasing demands for transparency. “With smart contracts, being able to transact transparently, where each side can clearly identify the next action item, control document flow, and process funds is a massive benefit. Data security will also drive adoption, but the final frontier will be the incorporation of artificial intelligence to find like-kind properties, potential buyers and even run alternative scenarios.”
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As to fears that this will eliminate brokers, Maggiacomo has been consistent in his belief that the only brokers who will lose jobs will be those who don’t take an advisory approach and/or don’t embrace technology. “Whether it’s the blockchain, augmented reality or smart buildings, there will soon be an abundance of information available in the market.” At a recent SVN Annual Conference, Maggiacomo spoke about how technology has disrupted numerous industries from stock trading to hospitality and the taxi industry. “These industries, like CRE, operated under artificial scarcity,” he says. “However, when data became ubiquitous the game changed. You either adapt your mind and skillset or hope you can hang onto your existing clients. But, I’ve never found hope to be a great business strategy.”