This interview is part of our new Blockchain In Real Estate series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and real estate.
In this interview we speak with Miguel Linera Alperi, co-founder and CEO of AREX, to understand how his company is using blockchain to transform the real estate business, and what the future of the industry holds.
1. What's the story behind AREX. Why and how did you begin?
ML: AREX started in London back in the summer of 2017. Concretely it was at a dinner that we started discussing the potential applications of Blockchain in the Real Estate market. Soon enough, we entered a Proptech competition in Spain and won first prize in the disruptive idea category. Our winning idea was to create an enhanced exchange for single real estate properties. We set out a structure to trade in these assets just as you would any equity stock in financial markets, plus all the benefits of distributed ledger technology.
We took the prize money and, without a minute's hesitation, invested all of it into building AREX Real Estate Technologies.
2. Please describe your use case and how AREX uses blockchain:
ML: Our initial idea was to digitalize single real estate properties and issue tokens (shares). However, after some research and working with real estate players, we realized that what the sector needed was to reinvent the transaction itself before digitalizing the asset. The deal process itself, we found, was the actual pain point.
AREX helps their clients to make real estate deals, safer, cheaper and faster. We are combining the immutability of blockchain with digital identities for both deal participants and the properties themselves. Flawless record-keeping enables dealmakers to act on accurate information and make better decisions. We remove procedural uncertainty and strain from the equation, so the deal works for you and not the other way around.
We provide an environment where the necessary participants can play their allotted parts seamlessly and with legal validity. Each participant has all the information they need to do their part (and no more). Depending on the jurisdiction, this can include notaries and registrars as well as government bodies.
Once the transaction is over, we store all deal insights into the digital IDs to inform and facilitate subsequent transactions.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
ML: One use case we are especially excited about is non-performing assets. The plethora of information coupled to non-performing assets has meant much slower deal cycles as well as an elevated risk in dealing with such properties. Just think of all the red tape involved over a long timespan of trying to execute contracts and multiple hypothecations across various entities and owners.
With comprehensive digital identities for the properties, with its full history, we can both cheapen and speed up any deal involving non-performing assets.
4. What other blockchain use cases in real estate are you excited?
ML: We are very excited about the possibility of leapfrogging traditional registrars in developing economies to guarantee and enforce property rights.
In our minds, the way this would work is that your property is validated by the entire network, which also includes those involved in you acquiring such property. The knock-on implications of this kind of decentralization would not only be significant for real estate players but also life-changing for the general population.
5. Where will AREX be in 5 years?
ML: Great question. One thing is sure; we will still be working hard on advancing both Proptech and Dealtech. We will be bigger and more ambitious looking to help solve the fundamental issue of distrust and inefficiencies both within and outside the real estate sector.