Business Monday: digital tokens, blockchain technology and St. Regis Aspen


As one of Aspen's flagship hotels, the St. Regis Aspen Resort has been traded and negotiated for over 30 years. The latest venture, however, involves digital currencies instead of cold hard cash.

In August, New York Asset Manager, Elevated Returns, announced its intention to sell nearly one-fifth of the 179-room hotel through crowdfunding using the Indiegogo website to help sell hotel shares through digital tokens ; the goal is to sell $ 18 million token, to one dollar, to accredited investors.

The tokens would account for up to 18.9% of the stock capital of St. Regis, with high yields based in New York, which owns the hotel, retaining the remaining 81.1 percent.

It would be the latest development for the ownership of the hotel whose history dates back to 1986, when developer Mohamed Hadid overcame Donald Trump's push to buy 88 acres at the base of Aspen Mountain over $ 57 million in a foreclosure sale.

That land was developed in 1992 in a Ritz-Carlton, and Hadid would eventually sell its half to Saik Abdul Aziz Bin Ibrahim Al Ibrahim, a Saudi businessman. In the summer of 1997, the Sheikh of the partnership with Los Angeles who owned the Aspen hotel, as well as those in Washington, DC, Houston and New York, was ordered by the court to cancel the Ritz-Carlton name because it was $ 4 million in management fees

In January 1998, Starwood purchased the luxury Aspen hotel and turned it into the St. Regis.

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Fast forward to September 2010, when 315 Dean Associates Inc., represented by the OptAsia Capital Co. Ltd., based in Bangkok, Stephane De Baets, acquired the St. Regis five-star for $ 70 million. De Baets also controls Elevated Returns, which manages 315 Dean Associates.

DeBaets' latest attempt to bring the hotel to external investors comes after its owner group has withdrawn its initial public offering of 33.5 million dollars from the New York Stock Exchange to February. The hotel would be sold as a real estate investment fund with a single asset, with investors having to put down at least $ 2000 – at $ 20 per share – to buy in the hotel. The IPO would have represented 49% of the hotel.

In the last round of DeBaets to seduce investors to the St. Regis, it sells digital coins – for the purposes of the St. Regis they are called "Aspen coins" – which can be purchased with US currency, in addition to Bitcoin and Ether. Purchases would be recorded on a blockchain (see the sidebar).

In an email to De Baets and Indiegogo's founder and CEO Slava Rubin, The Aspen Times asked the following questions:

Aspen Times: You can explain, in layman terms for our readers, what exactly are security tokens on a blockchain?

Rubin: Security tokens are digital assets that represent shares, debts or dividends recorded on a blockchain. Think of these as the digitization of stocks or paper actions. Today's financial world operates in a world of paper stocks, which has led to a very inefficient market in which banks, payment processors and other intermediaries make money by managing our transactions. Using a blockchain, much of this back office work (and related costs) can be automated through smart contracts and other mechanisms to deliver the same value as paper sharing, but without excessive costs.

Aspen Times: What makes the St. Regis Aspen an interesting investment through this venture?

De Baets: We believe that owning a digital currency in Aspen St. Regis is a unique and innovative part of the investment. We are constantly adapting to existing technology and believe that the blockchain will maximize the global potential of real estate, which we believe is also enormous for digital security tokens. Another attraction is that everyone can buy and sell Aspen digital coins globally, offering greater accessibility. We also see a lot of potential in the "encrypted world", the fanatical scrambles looking for more stable products – like money-backed coins – to invest, which will allow new flows to flow into real estate.

Aspen Times: At the start of this year, the owners of the St. Regis have suspended the IPO for the St. Regis. What gives you the confidence that the token approach will be more successful?

De Baets: Time will tell how successful this offer will be, but we believe that many people secretly want to own a piece of the St. Regis Aspen hotel. Owning a digital token is equivalent to sharing and is a digital security. We have seen that doing an IPO was not scalable through the traditional path. Seeing where the blockchain market was heading, we saw the opportunity to be the first to offer our symbolic offer for the St. Regis Aspen.

Aspen Times: What is the greatest risk with this type of investment?

De Baets: There is a risk with any real estate investment, but we do not see any significant risk other than market risk. This is no different than owning a piece of real estate in a private business. All we are doing here is to make a private real estate affair more transparent, accessible and potentially more liquid.

Aspen Times: At the start of this year the owners of St. Regis have invited a number of local individuals of high financial value to a presentation on the IPO. Something similar would have been done with Aspen Digital?

De Baets: Probably will be held the week of September 17th, this time we will have a dinner at the Chefs Club in New York with a panel talking about myself, Slava Rubin of Indiegogo, and Vincent Molinari of Templum Markets. We will certainly have dinner in the St. Regis Aspen for high-value local individuals after the transaction is closed.

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