Digital Identities of People and Properties on the Blockchain Will Revolutionize Pre-lease Due Diligence in CRE

Problem: Time-consuming pre-lease due diligence checks and a large number of parties in a CRE transaction
Today, each CRE transaction goes through the hands and systems of numerous third parties. Examples include due diligence and compliance checks that are just one part in the mechanism of a CRE transaction. Due diligence, KYC (Know Your Customer) and AML (Anti-money Laundering) checks and reporting can take months given the state of modern systems and approaches.
Likewise, verifying the property history, previous owners and tenants, compliance records, etc. is done manually and often depends on the physical availability of documents.
Failure to conduct due diligence checks and verify data can lead to tremendous losses. The CRE market in the US alone amounts to $15 trillion. Unsurprisingly, the industry is being threatened by all the new types of fraudulent activity that appear each year.
Here are just a few examples of the widespread problems that CRE professionals are struggling to address:
- money laundering;
- fraudulent deed conveyancing;
- fake financial reporting;
- concealing failed compliance checks and avoiding oversight;
- misappropriation of funds;
- bid rigging;
- misleading documentation;
- inflated expenses;
- manipulative information, etc.

How will blockchain address these issues?
As the incorruptible public distributed ledger, the blockchain automatically eliminates most of these activities and makes it harder for fraudsters to come up with new ones. Since digital records (i.e., blocks) are incorruptible and can never be modified, brokerages that have adopted blockchain will be able to achieve the transparency and efficiency they have been struggling to build with cumbersome systems and approaches.
More specifically, the blockchain-powered CRE platforms will allow digital identities of people and properties, so that due diligence can be performed upfront with near-perfect accuracy.
Finally, digital identities on the blockchain will consolidate property/owner/tenant profiles and all associated data. This will not only accelerate due diligence checks but will also help to avoid human error.