In the first agreement concluded regarding its new tokenization platform, the consultancy firm Advantage Blockchain is collaborating with Vertalo and the alternative trading system tZERO to tokenize the class A portfolio owned by Real Estate Capital Management, based in Pennsylvania.
Advantage plans to tokenize the portfolio in stages, starting at $ 90 million of office and hospitality properties over the next three months, said Alec Beckman, president of the consulting firm. Hotels in Pennsylvania and Costa Rica will be the first to be tokenized in the deal.
The multi-enterprise partnership lays the foundation for a steady stream of real estate tokenization projects for properties and mutual funds in Philadelphia and other parts of the northeastern United States, said Vertalo CEO Dave Hendricks.
"Rather than doing one-off business ... we are collaborating and in this way we are able to scale," said Saum Noursalehi, CEO of tZERO. “We are the most liquid platform in circulation for security tokens. We should have our retail broker-dealer active in the second quarter and have signed another 4-5 broker-dealers to integrate and exchange security tokens on our platform. ”
Through Vertalo, Advantage will use the Tezos blockchain to tokenise the real estate sector. On tZERO, the Investors they can sign up to trade tokens through Dinosaur Financial Group, a broker-dealer aimed at the consumer.
The tokens will be kept by Prime Trust, based in Nevada. In the past, the tokenization of real estate has been seen as a way to facilitate the trade in real estate investments.
The properties of this portfolio will now be open to all accredited investors rather than just those within traditional networks of property owners, said Marc Paquin, Advantage co-founder and Chief Operating Officer.
While past efforts to tokenize the real estate sector have failed due to low investor interest, Vertalo aims to help managers who are looking to improve back-office efficiency and create more liquidity, Hendricks said.
Vertalo has agreements with companies that tokenize properties all over the world, but Advantage is the first company specialized in real estate tokenization that is choosing to bring all its business to Vertalo.
An agreement that allows you to have quoted and instantly negotiable tokens
Hendricks claims to have developed the Vertalo Real Estate Platform as a tool for property owners, investors and fund managers to tokenize current investments, instead of tokenizing real estate first and then finding new investors for those security tokens.
"When you create a security token offering (STO) in the United States using a Reg D, you have to wait a year before it is negotiable," Hendricks said, referring to Regulation D of the Security and Exchange Commission, which covers private placement exemptions. .
"Since these tokens would enter the real estate sector with existing investors, these shares can be listed immediately and traded immediately."
“We are not using a security token to raise funds. We are using technology to cut costs and save money, "said Hendricks.