For an industry as old as real estate, some things never change. Land, buildings, buying, selling and repairing. The same elements have been around for hundreds if not thousands of years.
But some things do change. Today, much more information is collected, stored and used when dealing with real estate properties. And people care about that information.
They also care that it changes over time. Prices change, values change. And with the passing of years, it’s harder and harder to keep track of everything that has changed over time.
Elea Labs believes that this is why there is a real need to create a new way of looking at property – a new view, that encompasses everything about it.
From A to Z.
In other words, this becomes a Property DNA®, a “living, breathing” data set, organised at the property level (not in some government database along with thousands of other properties) and accessible through a digital interface.
Here are a few (of the many) reasons why this is necessary.
One of the major pain points in the real estate industry is the due diligence process. Most properties undergo a due diligence – legal, financial and also technical when they are bought or sold.
While the average property may not change ownership very frequently – the point of sale is not the only time when a due diligence is required. Real estate funds are normally required by law to re-evaluate their portfolios on a regular basis, at least once per year, and insurance and mortgage issuers may also require more frequent surveys of a real estate asset, even privately-held ones.
Not suprisingly, the due dilgence process is most often long, tedious and inefficient. This is not only because there is mass of information that must be collected and analysed (much of which changes during the period of time between a due diligence), but also because the parties engaged in the process may change – asset managers, property management service providers and so on.
A single view creates immense value for all participants in the due diligence process.
The Property DNA® helps re-align the organisational structure inherent in the due diligence process. It provides a way to link information to the asset itself, permanently, and make it a party in the process – an active participant in the due diligence process – instead of just a subject of scrutiny.
Now, instead of documentation sitting permanently in the hard drive of a property manager or in his/her software system, the relevant information is linked to the property itself, where it can be accessed at the appropriate time by all those who need it.
Naturally, this significantly reduces the wasted time in communication and passing of information between parties in the process. If we look into the future, a smart contract may be employed to automate all or part of the verification and execution of the necessary.
We have already mentioned that insurance is one part of the property industry that requires frequent due diligence and data analysis.
This is complex and burdensome enough – without the fraud factor. For insurance companies, the validity of data and (digital) paper trail is of great importance.
Verified costs for properties and insurance claims can supported by the Property DNA
The Property DNA® uses cryptographic technology to provide a transparent chain of record for the data which is provided from multiple sources. While this hashing of documents in and of itself does not guarantee 100% eliminate fraud in the underlying documentation, it does may tracing errors and manipulation much easier and with an ever-growing set of information, fraud becomes much harder and harder to commit.
It is a well-known fact that business is moving faster and faster. “Time-to-market” is no longer measured in years or event months, but in weeks and sometimes even days.
While the real estate market may not accelerate at exactly the same speed as consumer goods or SaaS tools, an uncertain global economy and the memory of the recent financial crisis sparked by a housing crisis in 2008, increases the importance of moving assets quickly and remaining flexible to react to market conditions.
With Elea’s Property DNA®, asset and portfolio managers, as well as private owners of large or multi-tenant properties can significantly increase their “time-to-sale” and even their “time-to-rent.”
A due diligence becomes a matter of a few days, if not hours; marketing is taken care of in a few clicks – and in the case of fractionalised ownership through tokenised investments, we can imagine an investor buying shares in a building or group of buildings over an open exchange, with full confidence in a matter of minutes.
Elea Labs believes that blockchain technology is a fundamental part of what enable the benefits of the Property DNA®.
The immutability of the blockchain helps support the creation of a “chain-of-record” for each property and in particular the subsets of required data for various facets of the due diligence process.
By tying each property to a unique smart contract, the Property DNA® can allow external systems (given access through a blockchain-based permission layer) to serve as oracles and enable automated actions.
And this is just the beginning.
Just like each Property DNA® must start from a specific point in time as its data set is filled up, so the vision of the Property DNA® goes beyond the simple gathering and verification of documents and data.
True digitalisation in real estate starts with simple data organisation and stretches forward into the many possibilities of connected buildings, tokenised invesment, automated payments and crowd-funded loans and maintenance.