The Beginner’s Guide To CRE Tech: How Blockchain Could Transform Industrial Real Estate
By creating a more efficient documentation and record-keeping process to track the transport of goods, this cutting-edge tech could reshape how logistics and industrial supply chains function and get goods to consumers faster.
Blockchain is the system on which bitcoin — the digital currency that continues to hit record-breaking values — is built. The digital ledger tracks all aspects of a deal, sharing a secure and transparent list of transactional records across a network of individuals and companies. For example, blockchain tech could allow real estate investors to transfer property titles digitally and securely from one party to the next.
“In the whole supply chain process, if you see there are going to be multiple users and organizations front to end, each user will have a different role it plays in the process [and] each organization has a different platform it uses for recording data. This will provide one platform [and] one system for all these users,” JLL Vice President of Industrial Research Americas Mehtab Randhawa said. “So far we’ve seen blockchain users in multiple industries from real estate to retailers to global food chains starting to implement [the tech] into their systems.”
Streamlined Record-Keeping In Real Time
Roughly 80% of C-suite executives in the logistics sphere believe the future of the industry is the digitization of supply chains, according to an MHI survey.
With blockchain’s record-keeping digital database, all of the parties involved in a supply chain, from manufacturers and distributors to suppliers, receive and can track all of the same data in real time.
"Everyone wants to know what’s going on with their products and goods. This platform can provide a long list of benefits,” Randhawa said.
That includes transparency across multiple parties, traceability of products by all parties involved, reduction of fraud and the ability to manage large amounts of data.
It also speeds up the logistics process, which Randhawa said is a major focus today.
“Faster delivery times is what customers need now,” Randhawa said. “If implemented, [blockchain is] going to improve the processes we're seeing now and be able to get the product to the consumer at a much faster rate than what we’re seeing right now."
Companies are testing this technology, with retail trailblazers like Wal-Mart Stores Inc. leading the wave of first adopters, according to JLL. Wal-Mart is tracking the distribution of pork units in China and fruits and vegetables in Latin America using blockchain databases.
“This can result in lower prices, fresher product and, overall, a more efficient logistics system,” JLL reports.
Despite all of the benefits, there are challenges hindering widespread adoption.
“This is still an emerging technology ... there is gong to be a phase of adoption [and] it’s going to take a while until we see all industrial get on board,” Randhawa said.
The industry is still trying to understand blockchain, how it works and how to implement the technology in their business models. That lack of knowledge, coupled with the cost of implementing the tech across all parties within a supply chain, will slow blockchain's acceptance. Besides, everyone has to get on the same page for it to really work.
“If we try to bring on one platform there is going to be time and investment involved in that — plus the factor that each organization would traditionally have their own legacy systems they’ve been using [for] years and years. This new tech is bringing all of them together on one common platform,” she said.