One of our favorite sources for up to the minute information on the real estate industry is Ryan Cox’s Real Estate Innovators podcast. There aren’t a lot of podcasts in this field that manage to entertain at the same time as they educate listeners and Ryan does a great job thanks to his extensive industry experience.
So we were very honored when Ryan, who’s also principal at Founders Grove Capital, which focuses on commercial real estate equity, along with AI and other emerging fields in CRE, asked CMO Yael Tamar to join him on his show to chat about the future of real estate investing, tokenization, and digital assets.
“An Amazing Financial Product for the Masses”
Yael first explained how, moving to Israel with her Master’s in Economics, she quickly grew frustrated working with traditional investment vehicles which were generally restricted to large corporations, qualified investors, and a few high net worth individuals. She found herself dreaming of solutions that would smash barriers to entry for ordinary people who have very limited access to strong investment products.
“Ever since then, I wanted to create an amazing financial product for the masses.”
With her B2B experience, she began consulting with companies in the blockchain space, helping them sell to banks, supply chain firms, and more. She was quickly inspired by the potential of blockchain to transform the average person’s ability to make money and invest… yet also frustrated by the lack of regulation and standards.
“As soon as I learned about the security token space, which is a space of regulated securities backed by blockchain platforms, I realized we have an opportunity finally to bridge the two… to allow people to invest in great products and also keep them protected.”
She came to SolidBlock after meeting with founder and CEO Yuval Wirzberger in the wake of SolidBlock’s success in last year’s astonishing $18M tokenization of the St. Regis Aspen Resort in Colorado, centered around the concept of dividing an asset up into many smaller parts.
Tokenization: The Big Idea
Ryan asked Yael about the big idea behind real estate tokenization and she explained that while gold is similar to real estate in many ways, gold has for a long time served as the solid basis for a wide number of flexible financial vehicles in a way that real estate traditionally hasn’t. “It has the attributes of a relatively stable product that can be used to create the same type of market – and that’s exactly what we’re doing at SolidBlock.”
As she explained, SolidBlock is looking for amazing real estate projects – creative ideas and brand-building opportunities that might not have a chance to come to fruition otherwise.
“We want to create an opportunity for them to get investment, through our platform, and we want to enable the public to take advantage of more flexible investment choices” – without exposing smaller private investors to the high levels of risk that characterized the early years of blockchain investing, which were centered mainly around coins rather than tokens, and on abstract value rather than concrete real estate assets.
The Pull of Globalization
They touched on globalization trends that have led to investors looking beyond their own hometowns when it comes to locating ideal real estate investments.
“People from various regions want to own real estate in other regions. Spain is really booming when it comes to the travel industry. The German market has a certain rate of growth for commercial properties. You live in Japan, you live in Greece, you live in Turkey… and you want to invest in those properties. That’s what we want to enable you to do – in a highly regulated way.”
The pull of globalization is especially strong when it comes to millennial investors. With globalization of real estate investment, investors can choose from among the best projects in the world – while also investing in their hometown to show support.
The idea of supporting a project through investment is important, she said: “We, as millennials, we like to feel connected to projects and to companies we invest in. We don’t necessarily like to own an apartment to live in it and go through the bureaucratic process. But we’re going to be very interested in a one-click purchase and then they can brag about it at their next Saturday-night party: ‘I bought part of an apartment building in Athens.’”
Secondary Market Potential
The conversation also touched on the potential for secondary markets to add significant value to tokenized real estate assets, something which hasn’t happened yet, since the Aspen St. Regis project used a U.S. exemption called Reg D (Exemption 506) which requires a lockup period of one year before the tokens require trading. The eyes of the industry are sure to be on AspenCoin once it does enter active trading.
As Ryan summed up the situation, “Aspen’s prestige, plus a luxury hotel brand, plus a unique security offering equals intrigue from the investment and real estate communities.”
Finally, Yael spoke about the key difference between SolidBlock and a number of other companies out there currently operating within the tokenization space.
“Many companies say they can do security token offerings, or that they can do regulation, that they understand real estate. In reality, there are very few. I think that’s why we travel so much to conferences, every two weeks or so, sometimes twice a week, to talk about the security token space and fractionalization of real estate, we really understand the process from A to Z, the complexities, the challenges, and the added value.”
It can be hard to stand out in a field packed with other types of investments, like REITs and crowdfunding. “There are a lot of real estate market tools that are similar to digital assets.” Yet most are centered around the old-world inefficiencies in the market, and SolidBlock is built around the premise that these inefficiencies can only be corrected by democratizing access to the investment market, something most other tools don’t offer.
“The vision is to democratize access, to create a truly global market with amazing projects, and to find capital at lower cost, also globally, by executing different financial planning across the life cycle of a real estate deal to really create this amazing financial product and market that a lot of people can benefit from.”
The entire conversation covered so much more than we’re able to share here – and it’s a fun listen! We invite you to download and enjoy the entire podcast and all of Ryan’s back episodes here.
And if you own a property you’re looking to tokenize, or are hoping to invest in the future of digital assets, or just have questions about how it all works – get in touch with us anytime.