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Sherry claims that the chain of blocks is a great solution to accelerate actions in the sector.SEATTLE – Much has been discussed about how the blockchain, and in particular security tokens, promise to change the real estate sector, especially because security tokens get widespread use and acceptance from traditional markets . Blockchain comes into play during the acquisition phase of obtaining information and approvals, as well as orchestrating all interactions between financial and municipal entities.
"Every little mistake or delay – a high possibility in the base offices of most of the buildings the services, even today, can derail the whole process," says Galen Moore, director of research of New Alchemy market.
Of course, there is skepticism about security tokens but Moore says there are two reasons why tokenization is worth it: liquidity and fractional ownership, both of which offer opportunities to reduce costs and frictions in the process real estate investment. For example, by using a security token offering to raise capital to invest in real estate, it becomes possible for issuers to automate the REIT restrictions applied to industry and improve access to investments.
"Real estate is a very inefficient business with a lot of intermediaries, consultants, contractors and other professionals," Michael Sherry, vice president of New Alchemy and general manager of real estate, tells GlobeSt.com. "Every step requires office work and coordination, and Block Chain is a great way to accelerate action in the industry, as well as reducing friction, timing and costs – the same applies to financial aspects, including debt, equity and documentation, and legal processes. "
For investors who are not accredited, their access to the real estate asset class is strictly limited and many choose to invest in REITs. For investors who are accredited and can more easily participate directly in the real estate market, individual investments are often subject to sales restrictions, such as one-year lockout periods or sporadic liquidity events.
By using an offer of security tokens to raise capital to invest in real estate, it becomes possible for issuers to automate some of these restrictions and improve accessibility for investments. If an issuer designs a security token offer under Regulation A +, for example, unaccredited investors may be able to participate. When multiple processes involved in the issue of a sale are automated, the management fees involved for all participants should decrease, says Moore.
With the collection of securities, real estate capital issuers and investors could benefit by reducing operating costs, such as when preparing tax documents. In addition, depending on the type of security that it represents and the technical implementation of the token, investors in real estate security token offerings may have more choice in the sale of investments, such as directly for fiat, for a cryptocurrency or for a & # 39; another digital resource. [19659003″LeofferteditokendisicurezzaperfacilitarelaproprietàdegliinteressiimmobiliariinclusediverseformedipagamentiricorrentipossonoessereemesseoggiutilizzandoblockchainpubblicicomeEthereumeuntokencomeuntokendiprotocolloERC-20″affermaMoore”Loscopodeitokensarebbequellodimantenereilregistrodeiproprietariperilbenecorrispondenteedifornireaqueiproprietarilapossibilitàdiprovareotrasferirelaloroproprietàeperquestopotrebbenonesserenecessarioaccreditarlo”[19659003] The type of infrastructure and software needed to support sophisticated tokenised real estate platforms are in place today and companies are able to build complex tokens and related ecosystems taking into account compliance. However, to realize all the improvements to the real estate market that the tokenization could allow, there is still a great deal of planning and determinations of the industrial body made by regulators that have to be completed.
It is likely that it will take a long time before a widely accessible platform for investors can be launched for the purchase, grouping and trading of real estate securities called tokens, but the value creation of such a system should be immediately recognizable. As in the early 1900s, when technological and financial innovations allowed many investors to enter the public stock market for the first time, blockchain technology and security token offerings could do the same for commercial real estate. For now, tokenization, security token and blockchain technology offerings are a cost-effective and technically sophisticated method for maintaining a proprietary ownership record, which are tools that could allow a more liquid and fair commercial real estate sector, concludes Moore.
