Startup Tokenizes $2.2B in Commercial Real Estate Through Polymath

gepubliceerd op by Coindesk | gepubliceerd op

Commercial real estate marketplace Red Swan has tokenized $2.2 billion in real estate through security token platform Polymath.

According to Red Swan CEO Ed Nwokedi, $780 million of that is available to investors in pre-sale, while the company has another $4 billion in real estate in its tokenization pipeline.

Tokenization has struggled to transform the multitrillion-dollar real estate market as institutions hesitate to re-engineer back offices until they see liquidity.

"They didn't really have the real estate background or the expertise to understand how the private real estate market works."

Nwokedi said Red Swan is in the middle of becoming a registered investment adviser with the U.S. Securities and Exchange Commission, which will allow it to manage assets for accredited investors.

The tokens are ST-20 tokens running on Ethereum, but Red Swan plans to switch over to an Enterprise blockchain platform in the future for increased speed and security, Nwokedi said.

Polymath only provides the tokenization technology while Red Swan appraises, markets and sells the deals.

Nwokedi, an 18-year veteran in the real estate space, turned to tokenization because he was looking for a way to open up high-quality real estate investment, usually only available for institutions and high-net-worth individuals, to accredited investors.

"You have a very large segment of investors who are between half a million and $10 million that were not participating because they just don't have enough equity to buy a quality piece of real estate," said Nwokedi.

While banks will usually only allow roughly 50 percent leverage on a given asset, Red Swan allows property owners to tokenize 90 percent of the net equity underlying a property.

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