Christian Simanek – HouseToken

“Sharing Real Estate value and Co-Investing are definitely reflecting the values and needs of a new generation of real estate investors. Blockchain technology is key to make all that happen.” — Christian Simanek

FIBREE had the pleasure to interview another entrepreneur in the field of Blockchain & Real Estate: With 20+ years of professional experience in the real estate industry, lately as a pan-European Executive Director at Swiss bank UBS’ real estate investment division, Christian Simanek has co-founded HouseToken (housetoken.io). Holding a PhD in law and also a diploma in real estate economy, Christian has been thrilled by the huge opportunities how blockchain technology can simplify legal frameworks and revolutionize the real estate investment market by giving true and direct access to retail investors. During his 14 years career at UBS, Christian has seen a very clear trend of real estate investors demanding a personal say in important investment decisions as well as full transparency from their investment- and asset managers. This trend has been started by institutional investors, such as pension funds, insurance companies and foundations, led to numerous segregated mandates and club deals and also went ahead to change real estate investment strategies in the wealth management business. Christian believes that this will also elevate the expectations of everyday investors and that blockchain technology will strongly support to fulfill them. He and his co-founders at HouseToken want to enable everybody to directly invest into properties – even with very small shares and a broad diversification. Beyond that Christian is active as a social entrepreneur by using the power of the Sharing Economy that also had inspired HouseToken’s mission of helping people to share real estate value very easily.

Q: Could you tell us a little bit about your background?

I have been working in the real estate industry for many years and for various companies. My last commitment was a long one. I have been working almost 14 years for Swiss bank UBS’ real estate division, called “UBS Real Estate & Private Markets”. I have been Executive Director in the Asset Management and also the Head of Leasing in Europe.  Before joining UBS I worked in the real estate investment business of Talanx, one of the biggest insurance companies in Germany. I was also with JLL, working as a broker and consultant for a few years. My academic background: I’m a lawyer and I also studied real estate economy.

Q: How did you get involved in blockchain and real estate?

The first step was to get involved in digitization of real estate. I’m really interested in digitization and new technologies. Working for the real estate industry for so many years, people like me are looking always for new ideas and challenges and love to work with startups. I had the pleasure to setup various projects with PropTechs to improve processes in the asset and portfolio management, in leasing and marketing but also for tenant relationship and retention. This is also related to my role as a member of the board of advisors at BuiltWorld, formerly called the “Real Estate Innovation Network”. We are supporting big corporations and investors in the real estate industry by matching them with the right startups and helping both to create value together. It’s for mutual benefit and to inspire the entire industry.

I’m very close to those people and I love to feel that cool energy and being engaged in new innovative and digital projects. Because of that I once joined a “blockchain meets real estate” symposium in Berlin three years ago. If you’re sitting together with roughly 20 blockchain experts who are really young, innovative people and 20 senior people from the real estate industry – then a very interesting discussions has started. We all have been working on different use cases. But if you have a huge hammer, everything looks like a nail. This is the beauty of blockchain but also the trap. You have to be very careful to find the right use cases that are really creating value – or even being disruptive.

This was also that wonderful day when I met Arnab Naskar who is co-founder of STOKR (stokr.io), a digital marketplace built on the blockchain to create independent access to a new age of capital markets. Arnab became one of my partners at HouseToken in the meantime.

Could you tell us about one specific use case that you have discussed?

Yes, we discussed for example one very interesting use case how blockchain could improve the procedure of bank guarantees in real estate. Normally for every lease, especially commercial leases, there is a bank guarantee in place. Blockchain technology and especially smart contracts could replace that and that would reduce lots of time and costs.

I am also part of BuiltWorld’s “Smart Leases” project group. We are aiming for lease contracts that are completely digital. We should not do a lease in written first and just scanning it and also typing data into someone’s IT system afterwards. Leases should be done digitally from the very beginning and also secured by blockchain technology.

How will smart contracts in your opinion change the real estate industry?

Smart contracts will change the long-term agreements in real estate, especially the very important ones.  I am thinking of the agreements between real estate investors and their asset managers, but also between asset- and property- and facility managers. The most important ones are of course leases as they are key for the value of its property.

If all those contracts would be digitized from the beginning, all important processes could be built around them, also having smart contracts in place. The level of fees or even of part of the rents and service charges could be linked to the KPIs based on transparent and secured real time data. I guess in the future both most important client groups in real estate –  tenants and investors – will expect that transparency and fairness in the business and will choose those partners who can fulfil that. The same goes for valuations and sustainability in real estate. All that needs to rely on transparent and secure real time data.

In real estate you can still find many players who are making lots of money without creating any value, neither for tenants nor for investors. Blockchain technology can cut part of those many middlemen out or shrink their influence significantly.

A last statement for Fibree

What I would love to see from Fibree is not only to connect people, companies and organizations from the blockchain community, but also to really foster collaboration between them. A lot of these small teams still feel a heavy competition. But once blockchain technology will start to evolve real estate, the market will become huge for everybody. At this moment collaborations among all the players are much more useful than having a competitive mindset. Therefore it’s super important that Fibree is bundling the power and being the ambassador for blockchain in real estate – even globally. I would recommend starting a kind of matching between your members and to reward e. g. joined projects between them in order to foster open minded collaboration.