Towards Open Data: Addressing Data Sharing Issues Across the CRE Industry with Blockchain
Problem: crucial CRE data is kept behind closed doors
CRE is known for its reluctance to share industry information. Although the common aim is to achieve greater transparency — because it helps investors to make good decisions — companies are still hesitant to share their data for fear it would backfire.
Brokers appreciate the benefit of open data as in return this would enable them to access much of the vast amount of other industry information. The more data the greater the competitive edge, and this has never been as important as in the current increasingly digitized, accessible and transparent world.
However, when CRE firms shared data with data service providers in the past, this often led to their data being commoditized and sold to other market players, leading to a reluctance to share it. The need to share data is very strong, but the need to keep the data proprietary is even stronger.
How will blockchain address these issues?
Blockchain and Smart Contracts will launch the next wave of innovation in CRE by making the industry data and benchmarks available for all without compromising their accuracy, security
This will open new horizons for both brokers and investors, many of whom were (and still are) operating under the narrow geographical constraints of nearby metropolitan areas without access to nationwide market data and lease comparables.
Blockchain and Smart Contracts will empower brokers and investors to compile a diversified portfolio — both nationwide and internationally — and access a variety of crucial information about lease rates and an overall area index. Ultimately, this will contribute to better location decisions.
A new frontier of innovation: beyond just data transparency
Data democratization and transparency is not necessarily the ultimate aim. In a broader sense the aim might be to empower and revolutionize open data, because it is not enough for brokers and investors to achieve the competitive edge they strive for. The ability and skills to curate, analyze and interpret available data accurately is definitely the goal.
Hence, in a world of open data towards which the CRE industry is gradually heading, each agent or broker will become a data provider. Simply owning the data, however, is not what is expected by clients and investors. Ultimately, each party involved is looking for the correct and meaningful interpretation of that data.
Or, in the words of Dan Spiegel, Executive Vice President of U.S. Operations for Colliers International,
“The commercial transaction process is made efficient by commonly available data. The disruptive shift [in the CRE industry — AgentMile] is the emphasis placed on the interpretation of data to make better and more informed decisions. In the end, it’s not about transparency actually. It’s about analysis.”
That is yet another area that blockchain and Smart Contracts have the potential to transform. By applying AI algorithms to the CRE data stored on the blockchain, it will not only automate the most mundane data analysis tasks but also produce much more accurate and credible outcomes.
