A $105 Million Real Estate Fund is Tokenized
REI Capital Growth — a commercial real estate fund worth $105 million — now lives on blockchain. Digital security tokens created during the tokenization process will be offered to investors globally.
Real estate tokenization industry is having a great start this year, as more properties are moving to Ethereum blockchain. REINNO announced successful tokenization of REI Capital Growth — a fund operated by REI.
The Offering
REI Capital Growth (REICG) uses tokenization to offer a new model for investing in U.S. commercial real estate to international buyers. It is designed as a two-tiered security token offering (STO) with $40 million in equity and $65 million in debt.
REICG security tokens are digital financial securities, backed by the tangible, cash-flowing, U.S. commercial real estate, fully compliant with KYC/AML requirements, and all SEC regulations. These tokens can be sold on secondary markets at the end of the holding period (40 days for debt and one year for equity).
“I have been in the real estate business for over 36 years. It is exciting to see the industry evolve and use innovative technologies, such as blockchain, to create new opportunities,” said Alan Blair, the managing principal of REI — a real estate investment, advisory, brokerage and management company. “Tokenization allows us to reach international investors and offer them exceptional investment opportunities in American commercial real estate. We are now able to deliver flexible, paperless assets and the highest standards of excellence to investors worldwide.”
Transforming Commercial Real Estate
Commercial real estate in the US is a profitable and sought-after investment asset. Investors are attracted to its stability, steady income flow, portfolio diversification, and inflation hedging. However, real estate is notorious for its lack of liquidity. It takes a lot of time, money and paperwork to complete a real estate transaction, convert a property into cash or vice versa.
REINNO is solving the illiquidity problem by offering not only tokenization services but also loans backed by tokenized real estate. Tokenization (digital shares) enables fast fractional ownership, and instant loans against those tokens allow investors to tap into the value of their assets easier and faster than current methods.
With REINNO real estate lending, token owners can decide on the size of loan collateral by depositing tokens and receive money almost instantly. Then, as they pay back the loan, they regain equity equivalent to the principal they paid against the loan. It turns real estate into a flexible investment instrument, helping investors gain control and leverage over their assets.
“Tokenizing REI Capital Growth brings us one step closer to creating an ecosystem where commercial properties are liquid while real estate transactions are paperless, instant and efficient,” said Viktor Viktorov, the CEO of REINNO. “We already provide real estate tokenization and lending services; soon we are launching a new functionality which makes investing in tokenized real estate easily accessible.”
REI Capital Growth is the first real estate fund tokenized by REINNO. The company has more projects in the pipeline, including both individual buildings and portfolios.
“Tokenization is revolutionizing the industry and establishing a new model for owning, financing and investing in real estate,” said Barry Monies, REINNO’s chief business development officer who secured the deal. “We are taking the biggest asset class online. I have been involved in commercial real estate investing for 30 years and this might be the most exciting development I have seen in this industry so far”.
