Commercial real estate is undergoing a rapid transformation. Digital technology has accelerated the adoption of new services and technologies, particularly in the last few years, which have fundamentally shifted how end users perceive and interact with our industry. Our sector has been transformed from a service-oriented to an experience-oriented market that is user-centric and intent on making every user as happy as possible. We also now operate with much greater transparency, so we have to operate in a more cost-effective way to maintain competitiveness in this new digital landscape. Often overlooked, such disruptive changes can be extremely bullish for commercial real estate developers who are able to quickly adapt their business model and transform their properties into integrated experiences where tenants enjoy the convenience of amenities outside their buildings (rooftopping) or inside their buildings through virtual retailing or other innovative use cases.
Disruption 101: How to Manage Disruption in Commercial Real Estate
The real estate market is expected to grow at a rate of 3.6% annually until 2021. Our industry has been impacted by many internal and external factors that are driving change in the way we operate and deliver our services. These include demographics and changing preferences of the end users, technology adoption and the advent of new service models and the increased cost of doing business. This has created significant challenges for all commercial real estate players. Disruption presents an opportunity for long-term investors who can see these transformations as an opportunity to develop solutions and solutions providers who can show how their products and services can address these new challenges. For investors, the key challenge is to identify growth opportunities in an environment of constant change. We need to shift our focus from growth to value creation. This requires a comprehensive analysis of the business environment, consumer needs and expectations, technology adoption, market dynamics and the competitive landscape. The next step is to understand how the business model needs to be transformed to be relevant in the next phase of the business. This will help identify the new growth avenues, growth segments, growth strategy and investment areas.
What’s next for commercial real estate?
With digital disruption, the commercial real estate market is shifting from a service-driven model to an experience-driven model. The market is moving towards a more modern and convenient way of doing business by providing consumers with more convenient and efficient digital solutions. The rise of the Internet of Things (IoT) and the rapid expansion of the digital footprint of the end user have led to an increase in the use of cloud-based services, machine learning, and artificial intelligence. These have led to an evolution in the way infrastructure assets are monetized. New technologies such as blockchain, radio frequency identification (RFID), and Cybersecurity are revolutionizing the way assets are traded.
The promise of blockchain has been promising for years and only recently is gaining substantial traction in the commercial real estate market. It is primarily being used to track and manage real estate assets such as immovable properties, land titles, and financial instruments. As the popularity of cryptocurrencies grew, blockchain was touted as the solution to create a digital ledger that could be decentralized and distributed, creating a tamper-proof record. The digital ledger, once recorded onto the blockchain, cannot be altered. However, there are still challenges related to implementation of blockchain in the commercial real estate market. Most of them are related to the adoption of blockchain technology. The main challenges to overcome are related to scalability, security, and reliability.
Rivetz is an initiative focused on creating a comprehensive ecosystem that will ensure the seamless integration of blockchain technology in the real world. Rivetz’s ecosystem includes hardware and software solutions that will ensure the scalability and security of the underlying technology. The Rivetz platform is designed to provide a trusted execution environment for blockchain applications and smart contracts. Through their Ecosystem of Hardware, Rivetz ensures that the underlying blockchain technology is safe and secure, allowing users to transact on the blockchain with full confidence that the data they are sending or receiving is not tampered with.
Key use cases of blockchain in real estates
Real estate transactions are usually complex and involve several parties. With the introduction of blockchain technology, such transactions can be fully automated, streamlined, and simplified. This can increase efficiency, cut costs, and reduce the risk of fraud. Real estate finance is another area where blockchain can have significant impact. The current system for mortgage documentation has a long history of inefficiencies and inefficicy due to the decentralized nature of information among various parties involved. With the introduction of blockchain technology, this could be fully automated and streamlined. This can have significant impact on the efficiency of the system and the cost of carrying out the process. Agriculture is another area where blockchain can have significant impact. Currently, food supply chains are highly fragmented and plagued by inefficiencies and fraud. With the use of blockchain, such problems can be fully solved, leading to an efficient and transparent system for the supply of food.
A revolution is taking place in how consumers and businesses use technology. However, most organizations are still focused on incremental change that is not focused on the new digital reality but instead on the old way of doing things. It is time to embrace disruption and transform the way you do business. With the rise of new technologies such as blockchain, it is more important than ever to embrace change and transform how you do business. Our industry is undergoing rapid transformation as consumers move away from traditional, service-oriented models toward experience-based models. To remain relevant, we have to operate in a more cost-effective way, and that can be done with the help of technology such as blockchain.