When it comes to the future outlook for commercial real estate, one thing is certain—technology will be even more widely adopted come 2017—particularly by those looking to automate the transaction process (take the VTS and Hightower $300M merger, for example).
Blockchain technology is anticipated to be one of the biggest disruptors to hit the market next year, with more than 56% of institutional investors expecting real estate players to adopt this tech for future property transactions, according to a recent study from real estate investment firm BrickVest.
Blockchain—which is the tech on which bitcoin currency is based—is an electronic ledger that keeps a running list of transactional records to share with a secure network. The tech is being embraced by financial players both big and small in a wide variety of industries, and is recognized as a way to manage transaction data securely and in real time without having a gatekeeper or central authority keeping track of things.
Trimont Real Estate Advisors managing director Max Ellerhorst told Bisnow he foresees blockchain tech to completely transform the way financial firms store data. "All of the firms that have their own databases and data models who are trying to monetize their version of the same thing, I think it's going to get disrupted," Max said. "I think there's going to be a public ubiquitous version of a platform that we have to opt into, making it much harder for us to compete against one another for our version of the data."
Banks, just like smaller financial institutions, are seeing the advantages of this technology as well—some, including Goldman Sachs, Bank of America and Morgan Stanley, even going so far as to submit applications to patent blockchain solutions, Max said. The technology has emerged as a transparent, more accurate way to digitally track assets, speed up transactions and minimize fraud—and the perks are far outweighing the challenges, such as the high barriers to entry and major costs.
"That's another reason [blockchain is an advantage for us. As a servicer, we're a regulated entity—not necessarily like a bank, but we get rated and audited too, so the more certainty and automation I can put into our process makes us a better provider, and banks want it for the same reason," Max said. "[Still,] making a blockchain has big costs because the computing power is so high. There is an anecdote that says bitcoin uses the same amount of electricity as Ireland to run—there really is a lot of infrastructure of power in it." Read more at: https://www.bisnow.com/nationa...
About Trimont Real Estate Advisors
Trimont Real Estate Advisors (trimontrea.com) is a real estate financial services provider with over $110 billion of client assets under management, providing services to commercial lenders and investors since 1988. Trimont is the leading provider of asset management, servicing, due diligence and advisory solutions to commercial real estate clients around the world. The firm has approximately 230 employees among six offices in Atlanta, Dallas, Los Angeles, New York, London and Amsterdam. From these offices, Trimont has managed approximately $225 billion of invested capital for clients on more than 17,500 assets with $500 billion of property value. Trimont has provided services to its clients in 61 countries.
Trimont is a highly rated primary, special, and construction servicer, with particular expertise in repositioning and development deals. Trimont is rated by Standard & Poor's as a Commercial Mortgage Special Servicer (Strong) a Construction Loan Servicer (Strong), and Commercial Primary Servicer (Above Average). It is rated by Fitch as a Primary Servicer (CPS2+) and a Special Servicer (CSS2), and by Kroll Bond Ratings, Inc.