NYC is the best real estate market worldwide, having crossed the $1.0 trillion dollar mark in total value of property in 2017 according to the Department of Finance.
Nonetheless, real estate as an industry sector has been slow in adopting new technology as compared to FinTech for example. With the realization of the technology opportunity at hand, PropTech is quickly developing into a powerful economic magnet attracting ideas from both private, public and educational sectors.
Startups are increasingly recognizing this special moment in time, propelling NYC to become a breeding ground for new PropTech companies in which to originate, operate, and establish themselves, some of whom go on to calling NYC “home” and establishing their headquarters here such as wework, Compass and StreetEasy to name a few.
The New York City Economic Development Corporation (NYCEDC), is helping to further NYC’s reputation as a most favorable place for technology companies, and thanks to their efforts, New York City (specifically Silicon Alley) has become the second most dynamic ecosystem for tech, trailing only Silicon Valley.
Another key factor in NYC’s PropTech dominance is the high concentration of universities with specialized programs in real estate and technology. Columbia University is the gold standard, and its Center for Urban Real Estate (CURE) and MetaProp NYC teamed up to successfully create the world’s first pre-accelerator for PropTech companies.
NYC Real Estate Tech Week has become the “Davos of PropTech” attracting industry leaders, entrepreneurs, strategists and influencers from around the world to cross-pollenate ideas and propel businesses during a week-long series of events.’ *1
Unto itself – technology can disrupt and bring forth myriad advantages to any industry.
What’s fascinating to me about this particular moment in time is that technology is disrupting itself by reconfiguring the very foundational relationships it makes between the data, how the data is organized and by whom the data is accessed. Referred to as the blockchain, in its simplest definition, it’s “a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network”. *2
Its capacity to harness the power of the internet, to crunch big data and generate predictive/prescriptive analytics and actionable strategies for any business is profound.
Absent politics, there’s a simple message in R.E.M.’s refrain that resonates for me: “it’s the end of the world as we know it (and I feel fine).”
As with any disruption of an old model, the new one comes with its own set of pros and cons.
Simply to surface some of the “pros” without going too deeply into any specific one (can be developed in a subsequent article), consider such advances in the transactional, collaborative multi-party experience:
- improve loan origination and execution
- increase ownership transparency
- enhance transaction security and integrity
- facilitate fulfillment and settlement flows
- governance through smart contracts
- land-registry systems
- mortgage-valuation sharing
- improved storage of real-estate documents
- new property searches
- compare financing options
The “cons” that come to mind are more nuanced:
- currently no international terminology standards for understanding contracts
- sustainability impacts – high energy requirements to support big data analytics
- uncertainty about government regulations if/how applied to some/all blockchain transactions (now and in the future)
- the chains of the blockchain can become slow and unwieldy as they grow in size and as the number of computers accessing and writing to the network grows
- parties with vested interests in the old model are powerful and organized, and have the connections and ability to lobby and protect their interests
- need to protect against a distributed denial-of-service (DDoS) attack
- programming language may require further development of logic tools and AI algorithms so that blockchain that can more adeptly process nuanced transactions (such as: multi-party amendments to correct a field failure) as compared to simple binary transactions (such as: money transfer complete? Yes/No)
- capital raising via ICO (Initial Coin Offering) by companies building questionable blockchain solutions that may have been unnecessary or technically unfeasible
Personally, I’m a big proponent of the blockchain. I see benefits to disintermediating transactions through the use of a distributed ledger, resulting in reducing complexity, decreasing costs and increasing transparency. In our company, TygaTrax, we continue to explore its application to the new item tracking products we’ve developed.
It is my hope that as we continue to share information as a community, more and more of us will feel fine!
In closing and back to R.E.M.: it’s the end of the world as we know it AND I feel fine”. It is my hope that you do too!
Article written for and originally published in the NYREJ by Nadine Cino LEED AP, a Subject Expert on Blockchain and a Thought Leader for SustainAble Action. Nadine is also the CEO and co-Inventor of both TygaTrax and TygaBox.
Nadine@tygabox.com | @nadinecino | 212-398-3809 | tygabox.com | tygatrax.com
*1 http://www.metaprop.org/blog/2017/8/24/why-new-york-city-is-the-center-of-the-proptech-universe For more information on NYC Real Estate Tech Week and the MIPIM PropTech Summit visit realestatetechweek.nyc and www.mipim-proptech.com/en.html.