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NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT MANAGERS 40 NAREIM able to make some progress, but ultimately were not able to troubleshoot key issues due to the lack of documentation and support. We came to the conclusion that we needed to move on to a new technology on day two in order to meet our goal. On our second day, we started exploring Hyperledger (https://www.hyperledger.org/). We went this direction because Hyperledger is getting a lot of attention in the Blockchain industry and it also has extensive documentation and community support. Hyperledger offers a variety of options for Blockchain and we ultimately decided on the Hyperledger Fabric platform due to the modular design and vast support it provided. By the end of the code jam, our real estate partner could send us an invoice for $500 and we could pay it based on fictitious credits we created. Time did not allow us to connect the Hyperledger platform to our internal accounts. The next step would be to perform a test using live accounts to see how the technology performs this transaction. While we achieved our goal of a transfer across companies, Principal Real Estate Investors plans to continue exploring the uses and benefits of Blockchain. More importantly, we learned a great deal about how the technology works but still have a long way to go to put it into operation. Testing, implementing process controls, and understanding the impact of future regulations will be key things to consider before Blockchain can be fully adopted. INTEGRATING BLOCKCHAIN INTO REAL ESTATE OPERATING PROCESSES Blockchain investment has soared in recent quarters, $107 million of Blockchain venture capital and an additional $36 million was raised through Initial Coin Offerings (ICOs) in Q1 5 . With CohnReznick prioritizing innovation from its Chief Executive Officer down, the firm has Blockchain squarely in its sights, using The CohnReznick Innovation Lab at the firm's global headquarters in New York to explore Blockchain solutions. Bitcoin transactions are passing 275,000 each day, and with several potentially larger deals on the horizon, CohnReznick is analyzing how Blockchain can support business process improvement efforts, and potentially disrupt supply chains in existing market sectors. For example, the collaborative capabilities in the innovation lab allowed CohnReznick to create a virtual global "code jam" to ideate solutions leveraging Blockchain and Internet of Things (IoT) devices for an Asia-Pacific-based client to potentially mitigate food safety issues in the $250 billion global perishable goods distribution market. In the real estate space, the immediate low hanging fruit for Blockchain centers on disintermediation and process improvement to lower costs across the transaction lifecycle by reducing process complexity. Other goals are to streamline due diligence to accelerate leasing transactions, enhancing cash flow, and providing improved data quality for management decision-making across the asset lifecycle. The firm's real estate advisory team is evaluating real estate- specific platforms such as REX; Ethereum, a decentralized platform of apps built on Blockchain, and the InterPlanetary File System (IPFS); and assessing interoperability gaps between the peer-to-peer platform and the traditional real estate technology stack. CohnReznick's Governance Risk, Compliance and Cybersecurity practices are monitoring the global regulatory environment, privacy and security standards, and other potential threats as the industry embraces the technology at greater scale. 1 http://fortune.com/2016/09/28/blockchain-banks-2017/ 2 https://bitcoinmagazine.com/articles/chicago-s-cook-county-to-test- bitcoin-blockchain-based-public-records-1475768860/ 3 https://cointelegraph.com/news/california-startup-uses-blockchain-for- real-estate-deals-from-la-to-dubai-and-moscow 4 http://www.coindesk.com/abn-amro-blockchain-real-estate/ 5 State of Blockchain Q1 Report, Coindesk ARE YOU READY TO IMPLEMENT BLOCKCHAIN TECHNOLOGY? How do you prepare your organization to implement Blockchain technology in the real estate space? The good news is that there are many educational opportunities and groups that can help real estate stakeholders. Here are some good tips and resources to help you get started: • Get involved by joining the International Blockchain Real Estate Association. You can find more information at www.ibtcrea.org or by joining their LinkedIn group. • Follow #blockchain on Twitter for the latest news on Blockchain • Attend a Blockchain hackathon • Seek out conferences that have sessions on Blockchain. Many real estate and Fintech conferences are recognizing the importance of this technology • Find another company that is willing to experiment with you on a proof of concept • Work with a Blockchain consultant or vendor such as IBM (https://www.ibm.com/blockchain) or Symbiont (https://symbiont.io/)