By Chris Engel, Krieg DeVault LLP
Blockchain technology has become a popular topic over the past few years, most recently in connection with the significant price increase of Bitcoin during the COVID-19 pandemic. Although blockchain technology is most commonly associated with Bitcoin and other cryptocurrencies, the technology is poised to disrupt the commercial real estate market as industry professionals continue to learn more about blockchain-based smart contracts which will streamline purchase and lease transactions.
One interesting application of blockchain technology to real estate is the ability to fractionalize the equity ownership of real estate (a process known as "tokenization") which will allow smaller investors the ability to invest in assets which previously would not have been available due to cost. The tokenization of real estate will allow investors to buy and sell real estate interests much quicker and in certain instances may eliminate the need to involve a bank in the purchase process.
To learn more about how blockchain may impact the commercial real estate industry, go here or here.
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