Global Tokenized Real Estate Market Guide 2024 Edition
Sponsored by The Real World Asset Foundation
Security Token Market (STM) is proud to release a comprehensive report on tokenized real estate, highlighting over $30 Billion worth. These come from multiple tokenization platforms, marketplaces and brokers, institutional activity, and financial instruments such as debt, equity, tranches, funds, REITs, and title. This report shares a breakdown of the current market size, various use cases, growth over the last 5 years, lessons from failed offerings, and ultimately where STM predicts the tokenized real estate market to be by 2030.
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This edition of STM’s Global Tokenized Real Estate Market Guide is made possible thanks to the Real World Assets (RWA) Foundation. At the RWA Foundation (RWAF), we’re building a bridge between crypto natives and tokenized assets. Our mission is to harness a community dedicated to unlock the potential of RWAs in DeFi and keep the future capital markets decentralized.
The RWAF is rooted in the values of strength, intelligence, and community. Like Wally the Elephant who symbolizes our brand, we’re here to provide perks, education, grants, programs, and more to all crypto natives who believe in RWAs as much as we do.
As a unified voice across asset classes, blockchains, and geographies, the RWAF is the web3 community exclusively focused on tokenization.
By launching a DAO, the RWAF can create a decentralized ecosystem built around $WALLY that will further drive innovation and adoption for RWAs within the crypto industry.
Supported by over 30 Founding Member firms, the DAO is dedicated to awarding tokenization initiatives, fostering interoperability, and bridging RWAs to DeFi platforms alongside creating rewards and benefits for tokenholders.
Join the RWA Foundation Telegram group and follow on X!
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Excerpt: Introduction to Tokenized Real Estate
The World’s Largest Asset Class is Experiencing a Fundamental Technical Transformation That Will Create New Means of Transacting
Preface; Globally, real estate is the largest economic asset that is almost universally valued using similar methods and market principles wherever you go. Property represents well over $375 Trillion in total value around the world, dwarfing public, private, and bond markets in size.
Uniquely, real estate is largely traded in one-off transactions. Centuries ago, the first way to transact land was introduced using Title as a way to prove ownership of property. The industry has grown significantly since then, expanding into sectors like Commercial Real Estate, Residential, Industrial, Agricultural, and so on. Numerous investment vehicles started to develop to enable more efficient ways to invest into the asset class and individual sectors over time — especially in the last 100 years. For example, by forming a business that owned the title, investments can now be done via the shares of the business. Eventually, forming funds that owned a portfolio of real estate became prevalent and commonplace. Even in 1960, a law was passed that created the tax classification of REITs to further incentivize investment into property.
This doesn’t consider another instrument that became an effective tool in the real estate industry for growth; leverage. Debt associated with real estate is astronomically large thanks to the concept of mortgages, refinancing, and securitization. In many cases, investors would use debt and manage it as a way to create new returns. Thanks to consistent cash flow produced by lease contracts, financial engineering allowed for the formation of standardized underwriting practices and methodologies that enabled these real estate debt markets to form.
This complex economic asset doesn’t benefit from its magnitude either. The administration and management of real estate assets are rooted in an archaic format. Like the rest of finance, it has succumbed to spreadsheets and manual data administration. Furthermore, real estate has difficulty tapping into public market liquidity. Outside of multi-billion dollar real estate firms like Blackstone or publicly-registered REITs (which only represents around 1% of all real estate), the asset class suffers from the ability to quickly sell into a marketplace like the NASDAQ or NYSE. If your only option is to sell outright to only a handful of potential buyers, refinancing becomes the only alternative method of liquidity.
Blockchain is set to be the critical driver of transformative change. This report’s purpose is to educate the reader on how the real estate asset class will be permanently altered by its ability to transact faster and cheaper to billions of people around the world. Tokenization is upgrading the archaic infrastructure the real estate asset class sits on, enabling it access to the modern day world of finance. New ways to create value to the underlying asset or the security interest that represents it will be sought out by the competitive forces of the market. In fact, they already are.
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About Security Token Market
Founded in 2018, Security Token Market (“STM”, stm.co) has been tracking tokenized financial markets since their inception, hosting the largest repository of security token trading data and news, tracking over 700 tokenized bonds, assets and securities valued at $49+ billion in market capitalization. STM also produces professional media programming around the tokenization industry amassing millions of impressions across social media and thousands of hours watched and listened across its YouTube and podcast channels.
Report Authors; Herwig Konings, Jason Barraza, Caleigh Crossman
Special Thank You to Peter Gaffney and Jackson Blau
Please be aware that anything stated, mentioned, referenced, linked, or covered in this publication is neither financial nor legal advice. The Security Token Advisors and Security Token Market teams may own or consider owning one or more of the cryptocurrencies, security tokens, stocks, ETFs, and other financial investments included in this report.
Please do your own research on any financial and legal decisions, and consider consulting a financial advisor and/or attorney before making any decisions or choices that may be reflected in this publication.
