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An asset manager in New York City is testing the limits of blockchain technology by selling equities in St. Regis Aspen (Colo.) Through an agreement with the Indiegogo crowdfunding site. The company, Elevated Returns, plans to allow investors to purchase stakes in the luxury hotel it owns, using blockchains to deposit digital tokens that reflect equity in the property.
If everything goes according to plan, this will be the first equity -stake sale to make use of blockchain. Stephane De Baets, founder and president of Elevated Returns, had the idea of working with Indiegogo to sell hotel shares via blockchain, after planning to use the St. Regis Aspen as the first single-asset equity-sale real estate on sale the United States have fallen. Although the Securities and Exchange Commission has signed the sale of the equity package, which would have seen 49% of the total assets of the ceded resort, representing 1.7 million shares each valued at $ 20, high yields have left the plan without much ceremony .
the intermediaries charged were equal to those of an important listing and we also examined our distribution and realized that we were placing the shares on profitable investors, "said De Baets." It was basically a private placement disguised as a & Public offering. The worst of both worlds. "
De Baets and his team returned to the drawing board and spent between six and eight months transferring the St. Regis Aspen assets to the blockchain. it is the first step in a process that will not only test the blockchain's capabilities and make it a vital vehicle for real estate transactions, but it will also set the High Returns on its path to the future.
we are using this transaction as a reference point for our next 100 transactions, "he said. "This is the first tokenization of complete properties.The meaning of the offer is very incisive.We are not doing it because we want to monetize or sell the hotels we own, we are doing it to demonstrate the concept."
Prove It [19659010] Blockchain technology is essentially a decentralized and encrypted public or private ledger. By using blockchain, users are able to track and record transactions in a way that can not be changed or changed retroactively. Technology is often associated with cryptocurrency like bitcoin, which in many cases is traded online but rarely used for individual transactions.
Instead of using a consolidated cryptocurrency, high yield plans reduce the valuation of the St. Regis Aspen into distinctive tokens created specifically for this transaction. However, high returns accept both US dollars and bitcoins in exchange for these tokens. Users interested in Indiegogo will be able to purchase these tokens, which will represent equity in the hotel.
De Baets argues that this system is superior to existing models because of its greater flexibility and accessibility for lower level investors seeking to become equity actors.
"To have an exposure to the real estate industry as an investor today, or you're extremely wealthy, you're associated with a sovereign wealth fund or buy a stake and you're getting exposure to a range of portfolios," he said De Baets. . "It can also take a long time to monetize these investments, Tokenization offers you a tool to offer you the basic benefits of ownership, as well as the ability to sell and trade these items."
No Warm Up
Currently only investors Accredited will be able to buy digital shares in the St Regis Aspen, something that De Baets said is part of the proof-of-concept experiment in which Elevated Returns is running. Sean Hennessey, clinical assistant professor at the Jonathan M. Tisch Center for Hospitality & Tourism, said that the question is not whether or not you could buy portions of a hotel via blockchain, but whether buying portions of a hotel was something that the market era
"At the beginning of the year it was said that the Plaza Hotel in New York would be bought through a bitcoin offer, but it fell during the planning stages," said Hennessey. "I do not see the market ready to conduct major transactions in this way only through blockchain, or through partial unit sales via cryptocurrency, we could get there one day, though."
De Baets agrees at least partially. He said that blockchain is still three to five years to be accepted as a tool to buy and sell hotels, but his company is willing to run the risk of reaching stakeholders at ground level. High yields are only 18% of the St. Regis asphalt at this time, and De Baets said that if the experiment pays the company has billions of dollars in hospitality goods, it is ready to take votes in the coming months.
"As always when you're the first in, there's no warming," De Baets said. "This tokenization links people directly with the product – this is a key transformational behavior – the trend is here to stay, and people should look at this space because investor behavior will change from now to the next five years."
