Texas-based Commercial Real Estate (CRE) marketplace Red Swan has tokenized $2.2 billion worth of real estate assets in partnership with security tokenization firm Polymath.
Red Swan said it has 30,000 accredited investors already registered to use its platform, and has plans to tokenize a further $4 billion in property over the longer term. Red Swan will profit by keeping a percentage of the equity sold.
The issued tokens represent 16 top-tier properties including mid-rise and high-rise apartments in California, New York, and Texas, and a 150-acre hemp farm in Canada’s Ontario province. Tokens worth $780 million will be sold in a pre-sale to accredited investors in what is believed to comprise the world’s largest sale of tokenized real estate to date.
Token sale to target investors with $500K to $10 million
The token sale will target investors seeking to deploy between $500,000 and $10 million — who lack the capital to purchase top level ‘Class A’ commercial real estate in traditional markets, and have been forced to consider lower-grade, riskier investment opportunities.
Red Swan believes that the tokenization of real estate will allow capital to circulate faster and more freely within the property market, unlocking equity that would otherwise be unable to circulate for long periods of time.
Real estate tokens come of age in 2020
Tokenization of real estate has seen a strong start to 2020.
On Feb. 8, African tokenization platform Flyt announced plans to conduct the continent’s first security token offering (STO) for real estate. The company’s FLYT token will be used to redeem shares in the Flyt hospitality Fund — a South African-registered fund that invests in hospitality property and apartment-hotels.
On Jan. 15, blockchain real estate company BrickMark purchased an 80% stake 1,600-square-metre commercial office located in the central business district of Zurich in Switzerland. The purchase was made in exchange for $135 million worth of its BrickMark tokens.