Blockchain in office building transactions

Technology advances, such as blockchain, are transforming markets across the globe, including the commercial real estate sector. Due to the commercial real estate markets’ fundamental characteristics – heterogeneity and immobility – real estate transactions face the joint challenges of time consuming process, information ineciencies and corresponding high transaction costs. Although recent studies have theoretically examined the possibilities of applying blockchain technology, applications remain unclear. The characteristics of blockchain technology could lead to improvements in eciency, transparency and therefore trust. Therefore, this research focuses on a blockchain solution for a field problem – the cumbersome transaction process – which is in line with design science research. Hence, this method is applied in developing a design proposition. In summary, organizations currently work in a decentralized fashion which causes various pain points and challenges. To support this, semi-structured interviews were conducted to identify and map pain points to specific phases and tasks in the transaction process. For mapping pain points the transaction process is visualized by means of Business Process Model and Notation. The obtained data is analyzed according to the Grounded Theory. From empirical findings it could be stated that major pain points are related to data structure and data quality. To resolve these pain points a blockchain application is proposed and pragmatically validated. Object related information, such as contracts, can be logged on a blockchain based on its consensus mechanism and cryptographic encrypting method. Original files are stored on the servers of the involved parties and a validated framework – consisting of essential information, such as coding, validation date, involved parties – is uploaded in the blockchain and visualized by means of UML and a clickable user interface. Validated record-keeping is the first step towards creating digital real estate transactions and resolving the pain points in the process. Hence, this design science research proposes an infrastructure for a blockchain-based application to improve the current way real estate is transacted by introducing a more comprehensive, better quality and more complete asset information overview, which streamlines the transaction process, may payoff for all involved parties and could potentially increase the size of managed global real estate.