Non-fungible tokens, or NFTs, have attracted headlines for the eye-watering sums splashed on digital artworks and virtual land. But behind the hype is a digital key that can help the real estate industry create better experiences, says Yardi’s Bernie Devine.
Many people in the real estate sector are looking to NFTs to support fractional ownership and debt financing says Yardi’s Senior Regional Director, Bernie Devine.
Mars House, a digital home designed by Toronto-based artist Krista Kim, sold for more than half a million dollars in 2021 and a virtual plot of land in online world Decentraland sold, using an NFT, for a record $2.4 million worth of cryptocurrency.
“But I think it’s even more exciting to consider role of NFTs in the future of the workplace,” Devine says.
A ‘non-fungible token’, as the name suggests, is a unique digital item stored on a digital ledger called a blockchain. Ownership of an NFT is easy to certify and transfer, which is why they are being used to tokenise unique items like art, collectibles and real estate.
“But NFTs can be a bridge between the digital and physical worlds. NFTs can be used as tickets or membership cards, giving people access to events, experiences, products or discounts.”
Imagine attaching an NFT to each service in a building? Think treadmills in the office gym, entry to Friday night drinks on the rooftop terrace, discounted movie tickets at concierge or yoga class reservations. “Each unique NFT can connect a smart building to smart contracts to provide smart services,” Devine notes.
While this idea may sound revolutionary, Devine says “it is simply another evolution of the office”.
“After nearly two years of working from home, people still see real value in their office. But they want space with the comforts of home, the convenience of a five-star hotel and the aesthetics of an on-trend café. The office must now earn the commute.”
Devine says people are looking for the same seamless and personalised experience offline that they expect online. “But delivering a wider array of services brings new layers of complexity. Landlords must bill for events, for time-based activities, for specific conditions and for bespoke services. We are moving beyond the monthly rent roll invoice, and an Excel spreadsheet is no longer fit for purpose.”
NFTs can help landlords to package, price and deliver a range of services and provide access to deep lakes of data so property owners can better understand how space is being used.
But it will be some time before people are scanning NFTs to sit down at a desk or grab a cup of coffee at the in-house café – and there are a lot of steps ahead for the property industry.
“We need to reimagine and redefine billing. We need to rethink the lease. We need to write new business processes into our software. Most importantly, we need to start seeing a building as a device.”
But Devine’s call to action is clear. “NFTs may have helped people monetise digital artwork and virtual land within the metaverse. But their role in the real world will help us create better experiences, more valuable assets and stronger relationships.”
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