Blockchain technology in commercial real estate transactions

Publication Date02 September 2019
Date02 September 2019
Pages570-579
DOIhttps://doi.org/10.1108/JPIF-06-2019-0085
AuthorHugo Pieter Wouda,Raymond Opdenakker
SubjectProperty management & built environment,Real estate & property,Property valuation & finance
Blockchain technology
in commercial
real estate transactions
Hugo Pieter Wouda
Department of Architecture Building and Planning,
Eindhoven University of Technology, Eindhoven, The Netherlands and
Deloitte, Amsterdam, The Netherlands, and
Raymond Opdenakker
Department of Industrial Engineering and Innovation Sciences,
Eindhoven University of Technology, Eindhoven, The Netherlands
Abstract
Purpose The transaction process of an office building is known to be time consuming and inefficient, in
part due to the lack of market transparency. The purpose of this paper is to focus on the development of a
blockchain application that can improve the transaction process of office buildings in the Netherlands.
Design/methodology/approach Conducting design science research, the current transaction process of
an office building and status quo of blockchain technology in real estate is investigated. Subsequently,
multiple parties are interviewed to define major pain points within the process. The interview findings are
used to design a blockchain solution which overcomes the aforementioned pain points. After designing, the
interviewees are asked again to pragmatically validate the proposed model.
Findings One of the major painpoints identified concerning thetransaction process of an office building is
that it is difficult to define the characteristics of a property, due to lack of data structure and quality. The
proposed application improves the wayspecific assets are understood by structuringphysical and contractual
information in oneplace and guarantees the quality of thedata by using the blockchain mechanisms.
Practical implications A blockchain application is proposed, which can improve the transaction process
of an office building.
Originality/value Recent studies indicate that blockchain technology could lead to improvements in
efficiency, transparency and therefore trust within the transaction process. Therefore, the proposed
application is of value for the future of real estate data management and the transaction process.
Keywords Innovation, Commercial real estate, Blockchain technology, Transaction process,
Information system, Design science research
Paper type Research paper
Introduction
Technology advances are transforming sectors across the globe, including the commercial
real estate (CRE) sector. Parties acting in the CRE sector are evaluating their processes and
institutions like banks, acting as trusted third party, are evaluating how to position in the
future (Deloitte, 2017, 2018). The potential of technologies, such as artificial intelligence, big
data and blockchain, is not only to streamline existing markets, but also to redistribute
markets and create new ones (The Goldman Sachs Group, 2016).
Real estateis a unique, complexand the largest asset classin the world. History shows that
real estate plays an important role in economies worldwide, is known to resist change, and
seemingly allergic in adopting new technology (Spielman, 2016). The importance of real estate
Journal of Property Investment &
Finance
Vol. 37 No. 6, 2019
pp. 570-579
Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-06-2019-0085
Received 30 June 2019
Accepted 19 July 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
© Hugo Pieter Wouda and Raymond Opdenakker. Published by Emerald Publishing Limited. This
article is published under the Creative Commons Attribution (CC BY 4.0) licence. Any one may reproduce,
distribute, translate and create derivative works of this article ( for both commercial & non-commercial
purposes), subject to full attribution to the original publication and authors. The full terms of this licence
may be seen at http://creativecommons.org/licences/by/4.0/legalcode
570
JPIF
37,6

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