Problem: a complicated decision-making process that is further obscured by the lack of data
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.
We have already seen that a lot of sensitive information (such as lease rates, sales comparables, rental values, etc.) is kept secret by CRE brokerages. This makes it more difficult to compile reliable forecasts and budgets and to project future market trends. Additionally, data analysis is predominantly time-consuming and manual.
How will Blockchain and Smart Contracts address these issues?
Combining artificial intelligence and blockchain technology to produce better and more reliable data analysis. This will be achieved by applying AI algorithms to the data collected and stored on the blockchain.
Because the CRE industry is so complex, CRE professionals have to rely on mathematical models to make a final decision on whether a location is good or bad. Blockchain and Smart Contracts will make these models much more accurate and helpful by recognizing real-time patterns and by producing meaningful outcomes based on real-life data.
For example, CRE professionals and investors can obtain a real-time breakdown of projected revenues based on the current rental values and patterns, detect fraudulent activities before they occur as well as dealing with compliance issues early on.
Therefore, instead of relying on dated information (or facing the lack of credible commercial lease comparable data), brokers can obtain outstanding insight into prices and past performances.
Ultimately, CRE professionals will no longer waste any time on data collection and compilation. There would also be added benefits for the CRE ecosystem if a platform encompassing AI and blockchain stores and analyzes the data, while brokers and investors would be able to analyze the bigger picture, the context of upcoming trends and ways to better capitalize on them better than in the past.