What is real estate tokenization?

• Real estate tokenization is the process of converting a real estate property or its cash flows into digital tokens on a blockchain:
• Tokenization can make real estate more accessible and flexible, and can streamline processes:
• Lower entry barriers: Investors can buy as much or as little shares as they want.
• Reduced risk of fraud: Smart contracts automate the process of buying and selling shares, making the chain of transactions more traceable.
• Increased transparency: Decentralization and the elimination of intermediaries reduce counterparty risk.
• Cost efficiency: Tokenization can reduce the costs associated with intermediaries like real estate agents, lenders, and title companies.
• Digital tokens: A digital token represents a share of the property, and comes with rights and responsibilities.
• Smart contracts: These computer programs automatically execute transactions, like transferring ownership when a share is sold.
• Blockchain technology: This secure system provides an extra layer of transparency and keeps track of everything.
• Types of tokens
• Non-fungible tokens (NFTs) are useful when a property is considered as a whole, while fungible tokens are useful for fractionalizing a property into parts.
• Risks
• While tokenization offers many benefits, it's not without risks, such as legal uncertainty and the need to make sure smart contracts are safe.

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Benefits of Real Estate Tokenization: Why People Are Motivated to Invest in Tokenized Real Estate

• In the realm of real estate investment, traditional barriers are dismantled through the power of real estate tokenization. This transformative approach offers a range of advantages that redefine property ownership and investment strategies. - Сommercial real estate tokenization emerges as a gateway to a new era, one defined by accessibility, flexibility, and efficiency.
• Fractional ownership: diversify with ease
  Conventional real estate investment demanded substantial capital, limiting participation. Tokenization revolutionizes this by enabling investors to engage with smaller amounts while diversifying across multiple properties. This opens doors for a broader spectrum of investors to explore and expand their portfolios.
• Liquidity revolution: a new era in trading
  Real estate’s historical illiquidity undergoes a transformation with tokenization. Property tokens can now be bought, sold, or traded on digital marketplaces, ushering in a level of liquidity previously unparalleled in real estate transactions. This newfound flexibility empowers investors to navigate the market with agility. source
• Global accessibility: unveiling borderless opportunities
  Tokenized real estate transcends geographical constraints, granting access to investment opportunities once limited by location. Investors from diverse corners of the world can now participate in markets that were previously out of reach. The global platform created by tokenization fosters new dimensions of investment diversity. source
• Transparency: blockchain’s assurance
  Blockchain’s inherent transparency becomes a cornerstone of tokenized real estate. Every transaction and ownership change is immutably recorded, offering an indelible audit trail. This enhances transparency, reduces the potential for fraud, and instills confidence in investors. source
• Cost efficiency: economic advantages
  Tokenization introduces significant cost advantages compared to traditional real estate transactions. Smart contract development and blockchain transaction fees are the primary expenses, making tokenization a cost-effective alternative. Moreover, reduced reliance on intermediaries lowers costs, while smaller investment amounts mitigate the impact of high transaction fees.

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An example of how this works.

• Imagine a property owner with a $100,000 property urgently needing funds.
• However, interested investors lack the necessary capital, and selling at a lower value isn’t an option.
• Tokenization offers a way out.
• The property’s value is divided into $1,000 digital tokens, hosted on a decentralized blockchain network.
• Investors can now buy these tokens gradually, starting from $1,000.
• This opens real estate investment to a wider range of investors.
• For owners, tokenization provides funds without devaluing assets. Investors can invest in smaller amounts. Transparency is ensured by the blockchain.
• This case illustrates how tokenization bridges financial gaps, making real estate investment more accessible and flexible for all parties involved. source

Success Stories

Tokenizing the St. Regis Aspen Colorado, USA resort.

In 2018, the St. Regis Aspen Resort underwent a groundbreaking transformation through tokenization, orchestrated by Elevated Returns (founded in 2017), a prominent New York investment firm. This pioneering endeavor encompassed the issuance of 100,000 Aspen Coin tokens, meticulously structured to represent precise 0.01% ownership stakes in the esteemed resort. Offered at a nominal cost of $1 per token, the initiative garnered substantial attention, ultimately amassing a noteworthy sum of $1 million in capital. The tokens found their avenue of trade through the Templum Markets exchange, marking a significant milestone in the evolution of real estate investment. source

Sapporo City Hotel, Sapporo City, Japan

• Tokenization of Sapporo city hotel
• Japanese firm Kenedix unveiled its latest endeavor in the form of digital security tokens.
• This initiative marked the fifth instance of Kenedix harnessing this transformative technology, with the underlying asset being a hotel situated in the bustling city of Sapporo.
• The collective funds raised through this innovative approach across these five properties amount to a substantial Yen 33 billion ($240 million).
• Foreseeing a burgeoning trajectory, Kenedix envisions the real estate security token market’s value soaring to an impressive Yen 2.5 trillion ($18 billion) by the year 2030.
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Why Tokenize Hawaiian Real Estate

Why Hawaii is considered by many to be a perfect place to invest in real estate.

• Real Estate assets in Hawaii enjoy consistent high demand and real estate values have consistently risen every year.
• Hawaii is a top vacation destination for both America, Europe, Asia and the Middle East.
• Honolulu, Hawaii has the 3rd most expensive real estate prices in the United States, compared to San Francisco and New York City.
• Therefore it is an idea place for a company, which provides real estate investments as percentages of ownership.

Tokenization is a global vehicle for trading shares of real world assets.

• Additionally, the BIDL FUND, created by multi-trillion dollar asset manager Blackrock has shown the world that tokenization real estate into $1000.00 to $1,000,000.00 investments sold on global cryptocurrency markets to white listed or otherwise qualified investors provides a global market and hugely successful investment funds.
• Blackrocks BIDL FUND, a tokenized investment fund which owns US Treasuries reached 100 million USD in 3 months. And it may become one of Blackrocks most successful ETFs ever.