{"id":1004350286,"date":"2019-09-05T04:29:54","date_gmt":"2019-09-05T12:29:54","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004350286"},"modified":"2019-09-05T22:49:30","modified_gmt":"2019-09-06T06:49:30","slug":"cre-execs-weigh-in-on-smart-contracts","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cre-execs-weigh-in-on-smart-contracts\/","title":{"rendered":"CRE Execs Weigh In on Smart Contracts"},"content":{"rendered":"
\"Infographic<\/a>

Infographic courtesy of Savoy Stewart <\/em><\/p><\/div>\n

Commercial real estate professionals see various advantages to the use of smart contracts in this industry, including greater speed and efficiency of executing transactions, according to a new survey by Savoy Stewart, of London. On the other hand, several barriers are seen as impeding the adoption of smart contracts, such as a lack of knowledge and concerns over regulation and taxation of smart contract transactions.<\/p>\n

Enabled by blockchain technology, a smart contract is essentially computer code that can both self-execute and self-enforce the terms and conditions of a legal agreement. And because of blockchain\u2019s decentralized nature, a smart contract can bypass expensive middlemen, such as financial institutions and lawyers.<\/p>\n

In CRE transactions involving multiple intermediaries such as brokers, banks and lawyers, a smart contract can take over some or all these functions. As a result, 66 percent of survey participants believe this will enable a transaction to be more efficient. And with a decreased role\u2014or none\u2014for middlemen, 63 percent of respondents said they expect that both buyer and seller could save substantial money. Savoy Stewart surveyed 544 commercial real estate professionals\u2014238 in the U.S. and 306 in the U.K. The inquiry found that 71 percent of the respondents view increased speed as the biggest benefit of using smart contracts because they run as software, so they don\u2019t require documents to be processed manually. <\/p>\n

As to the main perceived barriers preventing much wider use of smart contracts, 74 percent of those surveyed cited a lack of knowledge about such contracts. Interestingly, 58 percent believe that data privacy compliance might be a challenging issue. Because details stored on a smart contract stay forever, this could breach certain data privacy regulations.<\/p>\n

An evolving technology<\/h2>\n
\"Infographic<\/a>

Infographic courtesy of Savoy Stewart <\/em><\/p><\/div>\n

\u201cSmart contracts are only in their infancy, but they have huge potential to make a real game-changing impact in the commercial real estate industry,\u201d<\/em> Savoy Stewart Managing Director Darren Best commented in the survey. \u201cAs the understanding of their functionality as well as applications to different commercial real estate processes\/procedures improves, they could over time gradually phase out standard paper-based contracts.\u201d<\/em><\/p>\n

Kris Ferranti and Christiana Modesti of Shearman & Sterling explained that CRE equity tokenization<\/a> is a potential way of enhancing CRE\u2019s liquidity vis-a-vis other asset classes. They cautioned, however, that certain covenants and obligations typically found in the governing documents of the issuing entity cannot with any practical effect be encoded on a blockchain and enforced through smart contract technology. The reason, Ferranti and Modesti disclosed, is that while the technology can monitor compliance of objective conditions constituting a breach of covenants and obligations, it can\u2019t yet do so with respect to subjective conditions.<\/p>\n","protected":false},"excerpt":{"rendered":"

A new survey by Savoy Stewart of more than 500 commercial real estate professionals outlines both proptech\u2019s advantages and barriers to its wider adoption. <\/p>\n","protected":false},"author":882,"featured_media":1004350316,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,23891,21742],"tags":[46886,45758],"class_list":["post-1004350286","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-national","category-latest","tag-savoy-stewart","tag-shearman-sterling"],"acf":[],"yoast_head":"\nCRE Execs Weigh In on Smart Contracts - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/cre-execs-weigh-in-on-smart-contracts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CRE Execs Weigh In on Smart Contracts\" \/>\n<meta property=\"og:description\" content=\"A new survey by Savoy Stewart of more than 500 commercial real estate professionals outlines both proptech\u2019s advantages and barriers to its wider adoption.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/cre-execs-weigh-in-on-smart-contracts\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-05T12:29:54+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-09-06T06:49:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/09\/Image-via-pixabay.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-execs-weigh-in-on-smart-contracts\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/cre-execs-weigh-in-on-smart-contracts\/\",\"name\":\"CRE Execs Weigh In on Smart Contracts - 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