For over 20 years our company has been providing services and solutions to the commercial real estate industry. It’s a very large industry. Depending on which stats you read, the U.S. commercial real estate industry is valued at over $15 Trillion dollars and growing by almost $70 Billion a year. That is the size of the U.S. stock market.
The commercial real estate industry is also very complicated. It consists of developers, investors, advisors, managers, brokers and lenders. These parties form partnerships, joint ventures, REITs, TICs and dozens of ownership structures. And all these interested parties can be involved in a single property and they all have one thing in common – they have a copy of the same lease document. At least it should be the same document.
All industries have challenges trying to map out a good document management strategy, but the commercial real estate industry has to be one of the trickiest. It’s not only the critical lease documents, but loan documents, budgets, deeds, surveys and many other types that are needed to operate, own, finance and invest in commercial real estate. On top of the many documents, the aforementioned web of interested parties needs to access and securely share those documents – yes, challenging.
On top of that, real estate never goes away, which creates a long-term requirement to maintain some documents. Buildings do get demolished, but generally new ones are built. Buildings may start as a warehouse, but end up as luxury condos. Some of the documents associated with those buildings will exist for the life of the property, despite how many different entities have owned it.
Going back to that lease document that was mentioned earlier, much of the $15 Trillion in value is dependent on that one type of document. If all entities and users aren’t looking at the same version of that document, the consequences of misinformation can be substantial. The ability to certify a document as final, such as a recorded document, can therefore be very beneficial.
Block chain technology could possibly be helpful here in conjunction with cloud based access and security. The lease document is routed through a process of signing and at the end, it is certified. Once it is certified, then any user with access to that document, today or long into the future, would have comfort to rely on its contents. The old method of document recording certifies, but doesn’t protect privacy.
We have seen workflow be a fantastic method of ensuring a complete and clean set of documents at the end of a lease process. The complete, approved set of documents and information is published to the searchable archive as final, essentially certified. If one more step is added, that the document obtains a private block chain ID (“certified”), then all future interested parties know they can rely on it. One for all and all for one.