Real estate examples of high-end apartments in New York and the St. Regis Aspen Resort｜8 Decimal View
Real estate STO examples of high-end apartments and St. Regis Resort in New York
Original by Bawei Research Institute, please indicate the source for reprinting
Original by Bawei Research Institute, please indicate the source for reprinting
Earlier this month, an upscale condominium in Manhattan, New York was successfully tokenized on Ethereum. Rachel Wolfson suggested in the Forbes article that this milestone represents "the first tokenized mainstream property in Manhattan, a property that was recently valued at more than $30 million." Broker Ryan Serhant, who handled the transaction, said he was very excited about the revolution blockchain and Security Token (ST) have brought to modern finance.
“The market in New York is still strong, but it will take time to sell a new building at a reasonable price. Through blockchain-based tokenization, we can get rid of the huge pressure of relying on traditional bank financing to a certain extent, This is a much healthier model for the project and all stakeholders. Tokenization is opening up a whole new frontier for real estate development." - Ryan Serhant, Forbes
High-end apartments at 436 & 442 East 13th Street in the East Village of Manhattan, the first mainstream asset to be tokenized on Ethereum
In addition to New York, the St. Regis Aspen Resort in Colorado is also issuing real estate-based Security Tokens through the Indiegogo crowdfunding platform.
https://blockchain.indiegogo.com/projects/aspen/
Aspen Digital is working hard to build a real estate ecosystem in the encrypted world, and Aspen Coin is backed by a high-end asset, and the value of Coin corresponds to the common equity of the real estate investment trust that owns the ownership of the St. Regis Aspen Resort.
The resort has 179 rooms, including 25 high-end rooms and a 15,000-square-foot spa, as well as 14 fully equipped conference halls. Located in the Rocky Mountains, the St. Regis Hotel naturally has a high-quality skiing environment and the longest snow season. There are also annual festivals and festivals including the Ski World Cup, ESPN Winter X game, wine and food events, and the Aspen Music Festival. Rich activities, these have stimulated the demand for tourist accommodation.
Regis Aspen Resort
In short, whether it is the tourism real estate of the St. Regis Hotel or the high-end apartments in the East Village of Manhattan, they are high-quality assets with real value.
As the official Indiegogo website states, “Over the past 1,000 years, the ownership of most assets has been managed through paper contracts signed by parties to a transaction. With tokenized securities, a document will Confirmation of rights, and the token itself is the carrier of that document. Token can be traded like a digital currency, and under the regulatory framework.”
Asset-based ST is similar to other asset-based investment products: its value is backed by tangible assets. The value of the underlying assets can maintain the stability of the price of investment products and reduce the volatility of cryptocurrency prices.
As we mentioned in our recent article on security tokens (ST), tokenized assets can have the same compliance as securities on the one hand, and provide the convenience of digital securities on the other. Debt financing is an example, which can strongly promote the application of digital assets in many vertical industries.
For example, the real estate project in Manhattan, New York managed by Amiran Group has built a bridge between the fiat currency world and the virtual currency world. Through the tokenization of real estate, the project can accept legal currency and digital currency investment at the same time, and investors can receive interest denominated in legal currency or digital currency, which will improve the efficiency of liquidity and asset ownership transfer. Currently, the real estate group is working with Fluidity (Fluidity is a company that provides technical services for market makers, issuers and other financial institutions to trade security tokens). In addition to joining forces with Fluidity, Amiran is also cooperating with Propellr Securities LLC to promote the synergy between the legal currency world and the encrypted world:
"Propellr Securities LLC will connect the buyers and sellers of Security Token (ST) through the technology platform, and even turn the interest into tokens. Propellr will be able to accept legal currency payments and sell securities under the Red D 506 (c) exemption. By using AirSwap's With technologies including Tokenizing, a compliant secondary market will emerge. In other words, this will enable online, end-to-end, blockchain transactions of local assets to become a reality.｜Crypto Tomorrow
In China, there are also innovative explorations that try to combine blockchain and asset securitization. In June this year, Bank of Communications officially launched Jucai Chain, which is the industry's first full-process asset securitization blockchain platform for investment banks. alliance chain. In September this year, the Shanghai headquarters of China Central Depository and Clearing Co., Ltd. successfully supported Jiaoying’s 2018 first-phase personal housing mortgage loan asset-backed securities book-building and filing issuance, with a total scale of 9.314 billion yuan. This bond is the first credit asset securitization project based on blockchain technology in the market.
Transaction Structure of Jiaoying 2018 Phase 1 Personal Housing Mortgage Asset-Backed Securities
Yao Qian, director of the Digital Currency Research Institute of the People's Bank of China, introduced in detail a blockchain-based asset securitization product developed and designed based on a financial asset exchange's asset securitization product in "Innovative Design and Application of Asset Securitization Blockchain Platform". Chain information disclosure platform.
The application of a compliant currency-free blockchain in asset securitization will have the following characteristics:
● The technical architecture of the consortium chain is adopted at the bottom layer, and all participants are supported to join in a licensed manner.
● According to the hierarchical structure of the underlying assets, design the corresponding hierarchical ledger data structure.
● According to the requirements of information disclosure, it supports complete data modeling from upper-level products to underlying asset-related entity information.
● In terms of ledger data storage, the structured data is directly recorded on the blockchain ledger, and the file data is stored in IPFS (Inter Planetary File System) to ensure the security and reliability of the entire DLT ledger data.
● In terms of external data interoperability, select the core invoice data and use the VAT invoice inspection platform of the State Taxation Bureau as an external trusted data source to cross-validate the invoice information.
It can be seen that, slightly different from the United States, my country's blockchain + securitization is mainly a currency-free alliance chain dominated by traditional financial institutions. The Central Bank Research Institute is trying to use RegTech financial technology, the main purpose is to solve the problem of real penetration of the underlying information of the asset securitization business of small and medium-sized enterprises.
The rapid development of tokenization promotes cross-border market transactions
Propy.Inc.,A California-based blockchain real estate transaction platform, in January 2018, Propy announced that they would test their own blockchain real estate certificate system through a real estate in Vermont.
Propy CEO Natalia Karayaneva is a pioneer in the real estate tokenization space. She pointed out that cross-border information matching and transaction conclusion are faced with many pain points, including language and cultural complexity and payment issues, and numerous third-party intermediaries make the transaction process extremely lengthy. In her hot article Tokenize Vermont Real Estate, she imagines a real estate market without middlemen.
"We expect companies and individuals who want to trade properties across borders to become the primary audience for our token. Cross-border property transactions are a market with an annual transaction volume of 340 billion US dollars and a growth rate of 13%. Propy hopes Can promote the healthy development of this market. - Natalia Karayaneva | Hackernoon.
Todd M. Lippiatt, CEO of Propellr, also pointed out that although the JOBS Act has lowered the trading threshold of private securities, it is still unknown when the transaction of private securities will reach the convenience of standardized public securities. One possible solution is "Two Token Waterfall". Todd M. Lippiatt and Michael Oved introduced the principle of this mode in a white paper.
Private securities, such as real estate contracts, generally refer to assets that people want to hold until the redemption date, rather than liquidate early. Although the behavior of trading interest in the secondary market is also happening, it is not frequent and the process is very complicated. It usually only happens when the price is much lower than the net asset value. The tokenization solution is expected to make the transfer of ownership more convenient, reduce transaction friction and build a more liquid market.
In the "Two Token Waterfall" white paper, Lippiatt and Oved explained how private securities, such as Manhattan real estate worth 30 million, can improve the efficiency of multi-right transfer through tokenization and improve market liquidity.
Case Study: STO of St. Regis Aspen Resort
Aspen REIT,Inc. is the investment entity of St. Regis Aspen Resorts, a real estate investment trust. Aspen REIT filed for an IPO with the SEC a year ago, planning to issue 1,675,000 shares on the New York Stock Exchange at a price of $20 each. However, management ultimately opted for an STO over an IPO.
According to CNN, Elevated Returns, the owner of the St. Regis Aspen Hotel, an asset management company, announced in October that qualified investors had subscribed for $18 million worth of Aspen Coin in the equity STO activity launched by the Indiegogo platform.
Each Aspen Coin represents an ownership share of a real estate investment trust (REIT) consisting of a single asset, and this REIT owns a partial stake in the St. Regis Aspen Hotel (valued at $18 million) through the STO tokenization. Since securities issuance is regulated by the SEC, according to Reg D 506(c): only qualified investors can participate in the issuance and subscription of Aspen Coin.
Deal Structure Source: Krypital Group
Investors can purchase Aspen Coin on the trading platform Templum Market and store ST on any wallet that supports ERC-20 tokens (including Aspen web wallet). Templum Markets is both the issuer and trading platform of Aspen Coin, a fintech company and broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Templum Markets is also the operator of an Alternative Asset Trading System (ATS) for the secondary market trading of digital assets that are characterized as securities.
STOs, like publicly listed real estate investment trust fund REITs, allow investors to own a small portion of (high-quality) assets (fractional ownership), but in terms of issuance costs, the setup costs, investment thresholds and tax costs of publicly listed REITs It will be higher, so people may turn to the STO model. However, Krypton Blockchain Research Institute also pointed out that it remains to be seen whether STO is better than REITs in terms of information disclosure, voting rights, dividend distribution, and lock-up period.
Inclusive Finance - Lowering the Investment Threshold
When blockchain technology enters the mainstream application field, the tokenization of assets brought about by the implantation of smart contracts will form new benefits.
"The Third Wave of Blockchain""The Third Wave of Blockchain"It is pointed out in the series that in the process of digital transformation of finance, three waves have emerged. The first wave is accompanied by payment transfer, the second wave is accompanied by equity financing, and the asset tokenization (Tokenization) and STO (Security Token Offer) accompanying the third wave will bring more potential.
Anthony Ponpliano highlighted several core advantages of the ST contract in his article "The Official Guide to Tokenized Securities":
1. Reduce costs by removing unnecessary middlemen
2. Improve the efficiency of transaction completion
3. Open up the world market for potential investors
4. Automate service providers (such as lawyers) through software
5. Promote inclusive finance and reduce financial monopoly and corruption
Amiran Group, a broker of Manhattan real estate projects, pointed out that tokenized real estate is not only of historical significance for the company, but also a landmark event for the entire industry. The most interesting point of this case is its revolutionary concept, using a blockchain-based approach to lower the threshold for people to invest in high-end assets.
David Karliuki said to Crypto Tomorrow: "Tokenization is a new model, the value of real estate will be carried by a digital asset, and this digital asset representing "less transaction friction" can be distributed to different investors. The owner of the property can raise funds by selling tokens to different people, instead of selling the entire property to a certain person.”
The two core concerns of property sellers are "time" and "capital". In traditional high-end asset transactions, first, it is difficult to gather enough capital to purchase assets, and second, it takes time for assets to appreciate. These factors limit the trading of high-end assets. And tokenized assets open up new opportunities for both worlds. Tokenization not only allows more people to invest in real estate, but also allows people to enjoy dividends from asset appreciation by holding tokens, and even sell tokens on exchanges to make a profit.
From resorts in Aspen to high-end apartments in Manhattan, the adoption of blockchain technology in the real estate market is accelerating. By building a contract layer on the blockchain infrastructure, a new dimension will be born under the catalysis of technology.
Eight-Dimensional Capital is promoting the growth of this new field, and looks forward to real estate tokenization and Security Token empowering future finance, commerce and society.
