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How blockchain is affecting the commercial real estate sector – The Globe and Mail

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According to a Deloitte report, ‘blockchain technology can potentially transform core commercial real estate operations.’

da-kuk/iStockPhoto / Getty Images

When it comes to investing in commercial property, Aditya Koparde and Shaily Srivastava want to be the new kids on the blockchain.

“We did our MBAs together, and one day when we were having lunch, we wondered how technology might disrupt the real estate investment market,” Ms. Srivastava says.

That lunch nearly three years ago led them to co-found Acreageway, a blockchain-based, real estate investment company that will be open for business in April.

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Mr. Koparde and Ms. Srivastava, the company’s president and chief executive officer, respectively, are aware even people who are sophisticated in finance, investment and property still struggle to understand blockchain and related concepts such as cryptocurrency and bitcoin – and how these might affect the commercial real estate sector.

It’s not as complicated as it seems, Mr. Koparde says. “Technology addresses a few challenges that exist in real estate,” he explains. “One is [that it] provides a digital platform that can let people invest in property in the same way as they do in stocks and funds.”

A new way of raising commercial property finance, investors will, for example, be able to click “buy” on their smartphones to purchase a percentage of a planned new office complex without having to sign a stack of contracts and real estate documents.

Acreageway is just one company seeking to find a niche as the commercial property sector continues to experience a digital transformation.

“The underlying technology of blockchain can be used to improve investment processes, and this is really where it ties into real estate,” says Daniel Fuke, partner at Bay Street law firm Fasken and legal advisor for Acreageway.

According to the Blockchain in Commercial Real Estate report by Deloitte’s U.S. Center for Financial Services, the effect of the technology on property will be wide-ranging: “Blockchain technology can potentially transform core commercial real estate operations such as property transactions like purchase, sale, financing, leasing and management.”

A 2015 World Economic Forum survey of 800 executives and tech experts predicted that by 2025, 10 per cent of all global information about gross domestic product – one-tenth of all financial data – will be stored on blockchain technology.

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It’s important to distinguish between bitcoin, cryptocurrency and blockchain when it comes to commercial real estate investment, Mr. Fuke says. Cryptocurrency is a digital form of money; bitcoin is one of several types of cryptocurrency that are produced by “miners” – computer programmers who collect payments from people around the world and issue them “non-fungible tokens,” or NFTs, that rise and fall in value just like dollars, euros or yen.

“It may be a bit early to get excited about concepts like bitcoin for real estate, but blockchain can make a big difference,” Mr. Fuke says. “It can expand the pool of investors and may therefore increase property values [as more investors come aboard on projects].”

Blockchain is the process that documents all these transactions electronically – no matter how they’re paid for – in a way that’s easy for everyone to see and hard for anyone to tamper with. It’s all recorded and stored digitally, so there’s always a copy somewhere.

As more and more transactions are performed, completed and stored using blockchain and there’s a permanent e-record of everything, mid-level services, such as title searchers, may grow obsolete.

“Some real-estate-related services may go the way of travel agencies,” Ms. Srivastava says.

There may still be niche services, “but blockchain can take out the cost of transferring ownership in property without the involvement of banks, lawyers’ trust accounts and so on,” she explains.

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The idea behind enabling people to buy small shares in commercial real estate is to “tokenize” transactions the same way a bitcoin is a token. Shares of real estate can be bought and sold electronically, and the token is recorded on blockchain rather than a dusty deed.

Along with blockchain, bitcoin eventually may also play a role in the way people invest in commercial property, however, the way you pay is not as significant as the record-keeping yet, says Addison Cameron-Huff, a Toronto lawyer who specializes in cryptocurrency law.

“People will just buy and sell using the local currency,” he says. “It’s easier – international buyers in Toronto will pay in Canadian dollars.”

Nevertheless, cryptocurrency can have some impact on the types of properties that investors covet, Mr. Cameron-Huff says.

“That’s because the production and maintaining of actual bitcoins requires large amounts of energy,” he explains, referring to the reliance on huge computers that solve the algorithms that become increasingly complicated as more people buy and sell their bitcoins.

All that computer power eats electricity, generates heat and must be kept cool. Cryptocurrency producers are seeking properties that have access to cheap electric power, often in remote places.

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“If you have a bitcoin storage site in the Northwest Territories or northern Alberta, you can cool it by just opening the door,” says Mitchell Demeter, president of Netcoins Inc., a Vancouver-based company that works with cryptocurrency investors.

Investors are also looking at using natural gas that is flared off in southern Alberta oil fields to produce energy that can be used in buildings stuffed with crypto-churning computers, says Cale Moodie, CEO of Neptune Digital Assets Corp., a cryptocurrency company based in Vancouver.

“There’s ample excess energy in Alberta that’s otherwise not being used, and in addition to flared-off gas, there’s potential for properties [that service bitcoin] in places with hydro power,” he says.

Mr. Moodie and Acreageway’s founders see the blockchaining of real estate as part of a larger shift in the financing, development and redevelopment of commercial property.

“You need a lot of money to put up a big building. Up to now it’s been hard to get in and out of something you invest in, and with all the paperwork it’s not that transparent or easy to see how much you own of what,” Mr. Koparde says.

Turning bricks and mortar into digitally recorded tokens can put small retail investors just a click away from owning a tiny piece of real estate and help those who finance projects find the funds they need.

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In the end, digitizing real estate finance is a way to move money that builders now have to seek from big banks and institutional lenders such as megapension funds, Mr. Koparde says.

“Our dream is to have a fully licensed digital platform where ordinary people can reap the benefits of real estate investment.”

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Canadian home sales, prices surge to new record in March

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OTTAWA (Reuters) – Canadian home sales rose 5.2% in March from February, setting a new all-time record amid strong demand in markets across the country, the Canadian Real Estate Association said on Thursday.

The industry group said actual sales, not seasonally adjusted, rose 76.2% from a year earlier, while the group’s Home Price Index was up 20.1% from last March and up 3.1% from February.

The actual national average selling price hit a new record at C$716,828 ($572,821) in March, up 31.6% from a year earlier and rising 5.7% from February.

($1 = 1.2514 Canadian dollars)

 

(Reporting by Julie Gordon in Ottawa)

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Hot real estate market sparks warnings to potential buyers as complaints to regulator double

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As home sales in the province continue on a dizzying trajectory, the province’s real estate watchdog and regulator are warning buyers to be wary of what they may be getting into.

The Real Estate Council of B.C. (RECBC) and the Office of the Superintendent of Real Estate said that in the first three months of 2021, they have seen an increase in inquiries and complaints.

Calls to the regulator were up 42 per cent over the previous year, while complaints, such as how offers were made and accepted, were double the number received in the same period in 2020.

“Buying a home is one of life’s biggest financial decisions. There are potential risks at the best of times, but with the added pressure and stress of the current market conditions, those risks are amplified,” Micheal Noseworthy, superintendent of real estate, said in a statement.

 

 

The Real Estate Board of Greater Vancouver says sales in the region have continued at a record-setting pace.

Residential home sales covered by the board totalled 5,708 in March 2021, up 126.1 per cent from March 2020, when the COVID-19 pandemic hit, and up 53.2 per cent from February of this year.

Rural and suburban areas have experienced the biggest spikes.

For the past two weeks, Jay Park has been in the middle of the buying frenzy.

He and his partner are trying to upgrade from their one-bedroom apartment to a two-bedroom condo or townhouse in Vancouver.

“I wish we had done this a month or two ago,” he said.

 

A condo tower under construction is pictured in downtown Vancouver in February 2020. (THE CANADIAN PRESS/Darryl Dyck)

 

Park put an offer on a $1-million condo, $4,000 above asking price.

“To entice the [seller], we put in a subject-free offer, but it wasn’t successful,” he said. “They accepted $110,000 over asking price that was also subject-free.”

The hot market has led to bidding wars. Some would-be buyers have even lined up outside for days to try to get a jump on a property.

Erin Seeley, the CEO of the council, is warning buyers to do their research and be aware of risks before making an offer.

“It’s really important that buyers have engaged with their lender before they’re making offers so they know how to stay within a reasonable budget,” she said.

Seeley said some of the complaints the council has heard from buyers is that they weren’t aware the seller has a right to take an early offer.

“And the seller was really in the driver’s seat about setting the pricing,” she said.

 

Demand continues to outstrip supply for housing in cities like Vancouver. (Rafferty Baker/CBC)

 

Aaron Jasper, a Vancouver realtor, advises clients to avoid cash offers and to include finance clauses even if it may mean they lose a deal.

“There’s a lot of frustration among buyers, feeling pressure to take some risk,” he said.

“You’re better to be delayed perhaps a year getting into the market as opposed to being completely financially ruined.”

Jasper also says realtors are limited in the advice they can give to clients on legal matters, home inspections, potential deficiencies with homes, and financing.

‘Caught up in the craziness’

Other tips from the council include seeking professional advice before making a subject-free offer or proceeding without a home inspection, and speaking to a professional to determine how market conditions may be affecting prices.

Meantime, people like Jay Park say they are still keen to buy. Park has more viewings scheduled and is optimistic.

“It’s a very exciting time for us, but I also don’t want to get caught up in the craziness and make a purchase that’s above our means.”

Source: – CBC.ca

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Black Press Media introduces one of Western Canada’s best real estate platforms helping home buyers Find. Love. Live. that new home

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Need an agent who knows the community?

Or, is it time to look for a new place to live, but you don’t know what’s on the market?

Whatever the real estate need is for residents in the communities of British Columbia, Yukon & Alberta, there’s a new way to do that one-stop shopping – by visiting Today’s Home.

The slogan for the site is “Find. Love. Live.”

“We want people to find their dream home, love it, and live in it,” said group publisher Lisa Farquharson.

Building on the success of Black Press Media’s niche digital platforms – Today’s Home brings the same wealth of knowledge and local expertise to the search for a home, be it buying, selling, or even just daydreaming about what changes you can make in the future.

Search hundreds of listings that local real estate agents have available.

The listings cover properties around the region, from a one-bedroom, one-bath condo for $339,900 to million-dollar acreages throughout the province of BC, Yukon, Central Alberta and beyond.

Click on a listing, and see not only the realtor handling the property sale, but links to his or her other listings and social media feeds. With the click of a mouse, take a virtual tour of the property, find the property’s walking score, and learn about nearby amenities.

There are links available to schedule a showing, or send the agent a comment or question.

Want to share a listing? When you click on the share button, you’ll actually send an attractive digital flyer of the prospective property, not just a link.

There’s even a button to help determine how much you have to spend, courtesy of the convenient mortgage calculator.

Plus, scroll down the page on Today’s Home and find a list of expert local real estate professionals who can answer questions or help with that home sale, Farquharson explained.

Today’s Home offers the advantage of the massive reach that Black Press Media has built throughout Western Canada with its network of community newspapers and online products. That allows the public to tailor real estate searches based on location, price, and other key factors while allowing real estate professionals to gain unprecedented audience reach with their listings.

Today’s Home will dovetail into the media company’s existing print real estate publications.

“Black Press Media has real estate solutions in print and now we can add in the digital component,” Farquharson said.

Watch for expansion of the Today’s Home platform in the near future, she added. That will come as Black Press Media adds a new component – the development community. Developers will be able to reach a huge audience when their projects are ready for presentation.

For information on Today’s Home, contact group publisher Lisa Farquharson at 604-994-1020 or via email.

Happy house hunting!

Source: – Aldergrove Star

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