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How blockchain could disrupt commercial real estate

On Behalf of | Sep 18, 2018 | Commercial Real Estate |

The use of blockchain could simplify commercial real estate transactions as they would be conducted without the need for a third party. This means that someone in California could agree to buy a property or provide financing for a project by delivering the money directly to the buyer or borrower. The ledger that the information is stored on is digital and encrypted to make such transactions safer for all parties involved.

Furthermore, the SEC and FINRA have both started to research potential security issues and how they could be addressed. They have advised individuals to research the process of investing or transferring property. It is expected that blockchain technology will have a gradual impact on how commercial real estate transactions are conducted. Some in the industry are also convinced that the impact won’t be felt in the near future regardless of how it comes about.

The ability to transfer titles and other property rights may be difficult in the near future because of government regulations. It is thought that blockchain could make it easier for foreign investors or those who don’t have a lot of money to get into real estate investing. This is because the technology will create a lower barrier to entry for these groups, and it will make it easier to raise money in a timely manner.

Purchasing office buildings or retail spaces may be an effective way to earn a return on investment capital. However, a buyer may benefit from performing due diligence prior to making a purchase. This may be done with the help of an attorney. Due diligence may involve looking into a building’s title, how its location is zoned and the security measures taken to ensure that a transaction can be completed safely.