On April 17, capital markets focused tZERO and digital asset lifecycle management firm Vertalo announced a partnership that will result in the tokenization of $300 million worth of real estate on the Tezos blockchain. The offering will only be open to accredited investors.
— Vertalo (@Vertalo_) April 19, 2020
The assets are managed by Real Estate Capital Management (RECM), while the whole effort will also see contributions from Advantage Blockchain and Prime Trust, which will respectively provide consulting and custodial services.
RECM President was appreciative of the technological innovation and its benefits,
Real estate is the perfect industry to take advantage of the newest innovations with those companies transitioning us to digital platforms and flexible ownership structures having the largest impact.
The assets will be tokenized in phases, according to Advantage Blockchain President Alec Beckman. The first $90 million worth of office and hospitality real estate, specifically hotels in Pennsylvania and Costa Rica, will be tokenized over the next 3 months. Future estate will include more of Philadelphia and the Northeastern United States.
tZERO CEO Saum Noursalehi spoke of the company’s strategy going forward,
Rather than doing one-off deals…we’re partnering and are able to scale that way. We’re the most liquid platform out there for security tokens. We should have our own retail broker-dealer live in Q2 and have signed up another four to five broker-dealers to integrate and trade security tokens on our platform.
The Tezos blockchain has quickly become a solution for the tokenization of real-world assets, as several firms have announced plans to tokenize real estate on the blockchain. Most notably, financial group Elevated Returns and Securitize announced in 2019 that they would tokenize $1 billion worth of real estate on Tezos.
Other initiatives include Germany’s Black Manta Capital Partners, which on April 15 2020 tokenized Berlin real estate for German and Austrian investors. Future properties will be available to all EU nations.
Real estate tokenization itself has become a cornerstone of the market, allowing investors from across the world to invest in valuable property at affordable rates and in a convenient manner. The University of Oxford published a report in February 2020, where it discussed the potential for tokenization in the real estate sector.