Update on Tokenized Real Estate Activity

The current market capitalization of tokenized real estate is currently estimated to be $210 million[1]. Most of this activity has originated in the United States.  The goal of further democratizing real estate investment opportunities is gaining momentum.  We expect the market capitalization of tokenized real estate assets to grow exponentially in the near term. 

For example, RealT and Red Swan CRE Marketplace are two platforms that are providing the opportunity for individual investors to participate in real estate tokenization platforms in the United States.  As real estate prices continue to increase across all asset classes, the opportunity to invest in fractional real estate ownership provides investors the chance to participate in ways currently not available from the more traditional investment structures.  The most significant barrier being the minimum investment amount required by more traditional single-purpose real estate investment funds.

Why are these platforms being created? Issuers are incurring lower transaction costs which may provide higher returns to investors.  The use of blockchain technology allows real time cap table tracking.  Tokens issued on an open blockchain allow for the distribution of ownership to be visible to anyone.

Issuers are primarily providing for equity ownership in a real estate asset, but we are now also seeing the opportunity to invest in debt as well.  SolidBlock is currently offering London Digital Bond, backed by London properties on the Atlas One Platform to eligible investors.[2]

As we monitor activity in this area, we will look to see how other countries such as, Canada, United Kingdom, Germany and other developed real estate markets adopt this new investment tool.  The regulators in these markets are working to understand these structures and provide the appropriate level of oversight.