Blockchain : An Application on the Commercial Real Estate Leasing Market

Sammanfattning: The real estate industry is one of the global sectors that have a strong relation to economic growth, where the commercial real estate (CRE) market has a significant impact in financial stability. Commercial real estate has several unique features that characterize the asset. Some of these are the stable cash flow, the stable demand and the low volatility, which contributes to the underlying value. However, the industry is considered to be illiquid due to the lack of transparency in its transactions, such as in commercial leasing, where trust in the commercial leasing processes and between an CRE owner and their tenants has been lacking. Nowadays, there are an increased number of actors involved in these processes, both from the tenant side and the owner side, to decrease the information asymmetries between both sides. This has complicated the market, leading to information loss in the communication pathways. Blockchain is viewed to be a disruptive innovative technology that will revolutionize the real estate industry with several applications, such as tokenization, smart contracts and digital identities. In previous research, blockchain has been studied as a financial approach and how it relates to real estate as a legal instrument and as an application on the transaction market to increase transparency and liquidity. The aim of this thesis is to investigate how blockchain can be applied in the commercial real estate leasing market from an CRE owner perspective. In order to answer the research questions and the research aim, the study took form of a qualitative research, with an inductive approach. The collected data was collected through a literature review and through semi-structured interviews with relevant actors for the research aim. The results illustrate that blockchain can be applied in the leasing processes for commercial real estate owners through tokenization, smart contracts and digital identities. In particular, the ability to store and validate information has been the major argument for implementing the technology as the market is in an acclimatizing position, where traditional analog business processes are shifting towards being increasingly digital.