Knotel is Using Blockchain to Create Real Estate's First "Trust Machine"
[{"id": "dxurzxv", "text": "I hope this works. These old school subscription based databases (MLS, CoStar) really have antiquated models, and don\u2019t allow for a tenant or property owners to inform themselves. ", "replies": [{"id": "dyrnebf", "text": "I don't see any way building owners would share their data. This idea is fundamentally flawed. It puts them at a huge disadvantage by disclosing all their internal data? It would be like asking a fortune 500 company to share all of it's contracts with it's suppliers so that a new supplier can better inform themselves when they are negotiating with that company. Sure it's great for that new supplier, but it will never happen.", "replies": [], "depth": 2}], "depth": 1}, {"id": "dxuxw2h", "text": "&gt; \u201cThe blockchain is a technology that helps you move truth around,\u201d he said. \u201cSomething like one to two percent of real estate asset value gets taken by old school, offline entities like accountants, auditors, insurers and title companies. It is hopelessly stuck in a pre-internet schema.\u201d While a few percentage points doesn\u2019t seem like a lot it could represent around $9 billion dollars in New York City alone.\n\nSorry, but this sounds like straight up bullshit. How exactly will blockchain replace the people that are valuing buildings? It's based on lots of market trends, and subjective things like the quality and ability to improve a building, the strength of it's tenants, potential renewals, capital improvements, building expansion, amenities, buildout costs, zoning, property tax trends, etc. etc. etc. All that costs a few percent. How exactly does blockchain replace that expertise? With an algorithm? Zillow sucks at doing that for residential, which is a much much simpler product.", "replies": [], "depth": 1}, {"id": "dxvh200", "text": "I don't understand this article. Isn't blockchain just an online ledger such as used for accounting? How will this increase trust?", "replies": [{"id": "dxw6054", "text": "It is important to remember that is isn\u2019t just the ledger, but the ability to build in a verification process. If a ledger can be changed, there is no trust. If Knotel is able to create a database of property data that is verified by the property owners than it would become the trusted source for RE data.", "replies": [{"id": "dxw9z1n", "text": "&gt; If Knotel is able to create a database of property data that is verified by the property owners than it would become the trusted source for RE data.\n\nWhat verification? That the process just exists or a due diligence on the property such as needed repairs? Thanks for bearing with me on this.", "replies": [{"id": "dxwk3ka", "text": "Blockchain\u2019s security comes from the fact that all the information is stored at multiple locations. This means that if one location has data that doesn\u2019t match the others, it gets rejected as false. Knotel could create something similar with property data. If there is a discrepancy in lease rates between two entities that try to post them then it would use a consensus to determine which is true.", "replies": [{"id": "dxwkmax", "text": "Please pardon my mental slowness but what property data? When I invest in a property, I check it out personally such as cost to rehab and after-repaired value. I don't rely on someone telling me these numbers. If it's an income property, I verify financial data myself by getting income &amp; expense statements directly from the owner. If all blockchain does is make sure that all data is uniform, wouldn't it also make sure that bad data is uniform? I don't see how blockchain will help me trust that the data is valid and not just uniformly distributed bad data.", "replies": [{"id": "dxwl5sw", "text": "By doing that you are trusting the landlords/brokers who are giving you that info. What are they (possibly strategically) not telling you? It is also important to remember that this isn\u2019t only for buyers/sellers but also for those looking to lease space. They often don\u2019t have time to get info for every perspective property. The Knotel coin would have a running account of all of the lease terms in a building that would tell a lot more than an income and expense statement.", "replies": [{"id": "dxwmqqg", "text": "I get audited financial statements from the property owner accountants for long-term income properties and for quick flips I go to the properties myself to assess after-repaired values and rehab estimates. Can blockchain make this easier for me? You're correct in that I do not fully trust info given by property sellers or brokers.", "replies": [], "depth": 7}, {"id": "dy273le", "text": "Do you have experience in commercial real estate because that's now how it works. As a property developer and owner, I'm not going to tell you this information. Why would I? ", "replies": [{"id": "dy2gck5", "text": "That is the hardest part of Knotel\u2019s plan, in my mind, because proprietary data is viewed as an asset. They are trying to incentivize people to give their data so they can have access to others. I have experience in CRE and I also don\u2019t publish my info but I have talked to execs at big property firms that would rather have control of the listing data for their buildings than let companies like CoStar possibly misrepresent their buildings and reap all of the profit from their data.", "replies": [{"id": "dyrn7u3", "text": "&gt;They are trying to incentivize people to give their data so they can have access to others. \n\nYeah, so is CoStar, and if you share transaction data with them voluntarily, all they do is sell it back to you and also share it with your competitors. They have a lot of resources and a near monopoly and there is still no incentive to share data with them.", "replies": [], "depth": 9}], "depth": 8}], "depth": 7}, {"id": "dyrn3hu", "text": "But who would have access to that. Companies hold their lease terms very confidential and have no obligation or interest in adding those lease terms to the public record for potential future tenants.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "dyrmz0r", "text": "A lease rate alone is almost meaningless. Is it net, gross or mg? What are the increases? What are the options? Who's paying what for the buildout? What were existing conditions? What about ancillaries like signage or parking? Without the entire lease document, the lease rate is of very little value. If all blockchain is doing is saving a full copy of the lease in publicly verifiable domain, that is great, but is of very limited utility, since both parties to a lease will have saved copies of it any way. And there still could be amendments etc. that were not recorded into the blockchain. It's only as good as the data in.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "dyrmoyc", "text": "&gt;that is verified by the property owners\n\nWhat incentive do property owners have to do this? Most CRE owners have no interest in sharing their info", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]