The Ritter & Randolph, LLC Blog

Blockchain Technology (Tentatively) Enters Real Estate Industry

Aryeh M. Younger, Esq.Real estate professionals will soon be in for a surprise as tech experts begin to apply blockchain technology to record land documents. Blockchain, the technology underpinning Bitcoin and other digital currencies, is a revolutionary system for transmitting and storing data. The technology is hailed by its proponents as being a game-changer in data security—it has covered the pages of the financial press, as investors and CEOs scramble to find unique applications for the nascent technology.

Sweden has already begun to test the application of blockchain in its real estate industry. A recent Wall Street Journal article details Sweden’s attempt at recording land transfers using the blockchain, which the country’s experts claim will make land transfers more efficient and protected. Forged real estate documents, one of the many title defects covered by title insurance, still pose a threat to real estate purchasers across the globe. Proponents of blockchain land recording technology argue that their methods will put an end to fraud.

Despite the enthusiasm emanating from Sweden, title experts in the U.S. remain skeptical about applying blockchain to land recording. According to Zachary Kammerdeiner and Ashley Sadler of Connecticut Attorneys Title Insurance Company (CATIC), “[b]lockchain technology holds infinite possibilities that could help make current processes in our industry and society more efficient; however, it will never be able to do what title insurance professionals do each day: provide peace of mind and protect property rights.”

Title professionals such as Kammerdeiner and Sadler argue that the blockchain will not be able to prevent title defects, because the information recorded using blockchain is only as good as the information inputted. Therefore, as safe and efficient as the blockchain may be, it will ultimately remain susceptible to the same problems that currently plague local recorders’ offices.

The hype around blockchain technology has finally made its way to the real estate industry. At least one major county in the U.S., Cook County in Illinois, has attempted to apply the technology to its land recording system. But regardless of blockchain’s successes in land recording, there is little doubt that any major changes will take a long time. Many of our current methods of land recordation date back centuries, and many states have yet to adapt their laws to the modern era. Additionally, because land recording takes place at the local level, there is perhaps only a small likelihood of achieving uniform acceptance of blockchain across the country. Of all the industries facing possible disruption from blockchain, a look at history may lead us to predict that real estate will trail the pack.

Shopping Malls Around U.S. Face Further Vacancies

Aryeh M. Younger, Esq.

A recent study published by Reis Inc., a real estate data firm, confirms an ongoing trend in U.S. commercial real estate. Shopping malls are continuing to lose tenants, as American consumers increasingly turn online to purchase items traditionally sold in brick-and-mortar stores.

According to an article in the Wall Street Journal, the Reis Inc. study claims that shopping mall vacancies are at a six-year high. The study is based on an analysis of 77 metropolitan areas in the U.S.

The flight of brick-and-mortar tenants has a number of experts and politicians pointing the finger at online retailer Amazon.com. Just recently, President Donald Trump accused the online giant of paying too little in taxes while “putting many thousands of retailers out of business!” However, the president is not alone in raising alarm over Amazon’s impact on brick-and-mortar stores. Lawmakers in states across the country are beginning to explore possible ways for Amazon to pay more taxes, hoping that such maneuvers will increase the competitiveness of non-online stores.

In addition to the Reis Inc. study, other news has demonstrated a growing problem for shopping malls. Brookfield Property Partners LP, a company that owns and operates thousands of shopping malls around the world, announced that it has reached a deal to acquire GGP Inc. at only $23.50 a share. GGP, Inc. is a publicly traded company with shopping malls around the country. Market experts were surprised to learn how little Brookfield negotiated to acquire the company, a further indication of the fact that brick-and-mortar retailers face a serious crisis. GGP Inc. is also the owner of Cincinnati’s Kenwood Towne Centre.

The fate of U.S. shopping malls, both big and small, may rest with lawmakers who already seem eager to curtail Amazon’s growth. If they successfully slow the rise in online shopping, perhaps shopping malls around the country will be due for a comeback.