Tokenization of Commercial Real Estate Logistics Centre
[removed]
[{"id": "hkkmdwq", "text": "Take a look at RealT.co\n\nSame concept, but residential. Their properties usually sell fast which proves your concept. If you can provide a slick interface there's no reason you couldn't make it work!", "replies": [{"id": "hkknmde", "text": "Thank you. Look at this already. My only concern was that I am providing a lower yield (more core product) and retail investors maybe are not used to it", "replies": [{"id": "hkkzgf3", "text": "You're right. They are kind of conflicting ideas and audiences. Those investors looking for lower risk investments might see tokenised assets as the very opposite of what a core investment is meant to provide. Not saying it's true, but it's likely to be perceived that way.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hkkqpzr", "text": "That's a CRE REIT with stock by another name. The SEC would absolutely get you for creating an unlicensed security.", "replies": [{"id": "hkkvued", "text": "Well OP seems not to be American, so no SEC per se. But this is still one of the dumbest ideas I've heard in a while.", "replies": [{"id": "hkl0q57", "text": "There are a number of platforms in the US that tokenize real estate, its not a problem with SEC.\n\nNot sure how this is \"dumb\" - tokenization opens CRE up to retail investors and more liquidity is generally a good thing in a high inflation environment.", "replies": [{"id": "hkl241c", "text": "Crypto anything = dumb.\n\nBecause hey, let's avoid actually paying dividends, I'm sure people will love that. No, no, no - you see your token becomes more valuable while I control all of the cash that the underlying asset generates, so it's not a scam, it's just tax efficient! It's not a ponzi scheme, it's \"defi.\"  I'd pay you if I could, but that's the nature of decentralization - there's no shareholder register, so payments are impossible. But it's still *totally* not a scam, I promise...", "replies": [], "depth": 4}, {"id": "hklsr3w", "text": "There is liquidity - invest in a REIT. How is tokenization going to help when you need to call Capital for a deal if your single tenant blows out and you need to retenenant the deal? Or like a major capex item hits? Insurance claim? Unless the manager is super talented and is over capitalizing the deal you can\u2019t call money to protect your collateral. I\u2019m also not sure how you\u2019d deal with like cash distributions if you\u2019re buying this stuff and have no insight into operations. Oh and even on that point what are you going to do, pay a bazillion dollars to track down individual investors of like $5 coins to cut them a check that\u2019s worth less than the postage for a quarterly distribution?", "replies": [{"id": "hklwhp5", "text": "&gt; Oh and even on that point what are you going to do, pay a bazillion dollars to track down individual investors of like $5 coins to cut them a check that\u2019s worth less than the postage for a quarterly distribution?\n\nIt's all on the blockchain. Distributions can be done very easily and automatically. Don't get me wrong I'm not saying this is a good idea but paying postage for distributions? This is not 1970", "replies": [{"id": "hkm2xrp", "text": "I mean I don\u2019t literally mean sending checks more the record keeping and fees associated with a ton of small investors. Also not sure how you\u2019d ramp CF into it pre distribution to determine market value like you can a reit or track share changes ex dividend distribution date? \n\nEither way biggest place this falls apart for me is on liquidity management for major capital expenditures - I don\u2019t know how you fund it, I feel like you end up in distress and the manager ends up getting their clock cleaned by a credit fund lending senior pref to pay for stuff. Feels like it Ends up being like a TIC but with even worse garbage sponsors and garbage underlying investors. Even capitalizing an acquisition would be brutal, who lends on this with the ability for constant transfer rights and no look through to the underlying investor pool", "replies": [], "depth": 6}], "depth": 5}, {"id": "hkp6tln", "text": "Good question. Thats why I would target only core brand new properties. Yet the industry standard it to keep Capex reserve even for brand new assets", "replies": [{"id": "hkpiizm", "text": "You\u2019d need an uncompetitive amount of reserves to make it work, even best case maybe you get to an 8% CoC which over a few years doesn\u2019t amount to much. To establish an adequate level of reserves you\u2019d have to way overcapitaloze your acquisition. And even still to the earlier point what happens if that still isn\u2019t enough if your tenant goes bankrupt day 1? Or an uninsured loss event happens? In the total downside you\u2019re giving the property back. \n\nAnyways good luck, the risk adjusted return doesn\u2019t sound compelling to me but I\u2019m just one person there are plenty out there. Enjoy your week!", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "hkljo93", "text": "Even if the SEC isn't involved, if I was investing in real estate that I did not have direct control over then I would want there to be some regulatory burden on the party managing it. A REIT at least is answerable to someone.", "replies": [], "depth": 3}], "depth": 2}, {"id": "hkp6l8j", "text": "In some countries there is no REITs due to local regulations.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hkl0ete", "text": "ROX financial did this. Single asset Amazon leased warehouse. https://www.wsj.com/articles/amazon-warehouse-aims-to-go-public-as-single-property-business-11626177602", "replies": [], "depth": 1}, {"id": "hkl8bea", "text": "There is already a company doing this - so far they have $2 billion in assets tokenized.\n\nhttps://www.seedinvest.com/redswan/seed\n\nIt's a very interesting idea", "replies": [], "depth": 1}, {"id": "hklx1yk", "text": "I don't see much appeal without the liquidity of a secondary market. If you are into real estate, you can get into a REIT much easier. If you are into crypto, you can get much higher than a 6% return by staking, and that offers liquidity. The only advantage over a REIT is tokenization of one property rather than an entire portfolio, but that also comes with more risk.", "replies": [], "depth": 1}]