Blockchain Technology Enabling Real Estate Fractionalization Transaction

There is a multitude of people and organizations that are trying to incorporate blockchain technology in different industries. Among these is the housing market, where the nascent innovation aims to increase transaction time and transparency and protect an investor’s assets in a more secure space.

Corbin Page and Mo Shaikh are among those who are trying to hasten this transition. Their current project involves 304 Troutman St in Bushwick, Brooklyn, where the duo aims to develop a platform enabling people to get fractional sales or purchase of a certain residential or commercial real estate property. Page and Shaikh will give eight of the Troutman building owners tokens to allow trading between them or other parties that are interested in the building.

But one of the problems of introducing blockchain to the real estate market is not a lot of people understand the technology behind it. Indeed, Shaikh admitted that they’re still disseminating blockchain information through blog posts, conferences, and marketing campaigns to help people wrap their head around the concept. He added that they had spoken with 20 different groups before finding one that understood the technology and is willing to integrate it with their current system.

Among the benefits of Page and Shaikh’s project is giving people an opportunity to invest relatively small payments in a certain property. This eliminates the need to obtain a large sum of money just to be able to get your foot through the door of the industry where huge investment requirements and “lock-up periods” are hindering the poor and middle-class from entering.

But blockchain professor Aaron Wright sees several pitfalls in the duo’s approach. One such pitfall is the trading volatility of blockchain and the lack of regulation for it. Another disadvantage is that while the fractionalization might bring down real estate cost, it might accelerate neighborhood gentrification. This sentiment came from Jamie Wiseman, one of the very investors involved in the project.

Page countered that fractionalizing real estate properties will, in fact, enable communities to battle gentrification itself. He argued that community groups and organizations helping immigrants may help coordinate endeavors to purchase small portions of houses or apartments, or even commercial properties.

Professor Wright agrees and added that this collective effort will also strengthen the bond between communities. However, he did note that it could take years before adaptation spreads across the nation.