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Real estate tokenization industry is having a great start this year, as more properties are moving to the Ethereum blockchain. A fintech startup REINNO announced the successful tokenization of REI Capital Growth – a fund operated by REI.
The Offering
REI Capital Growth (REICG) will use tokenization to offer both equity and debt for their new real estate fund, which will build upon their existing $30 million dollar portfolio. The REICG fund features a new business model for investing in U.S. commercial real estate available for both U.S. and international investors. It includes two simultaneous security token offerings (STO). One $40 million equity offering and a $65 million bond (debt) offering.
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 and IRS 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.
When asked about their unique business model, REINNO Co-founder Barry Moniês who brought in and negotiated the REICG deal stated, “REINNO is solving the real estate illiquidity problem by offering not only tokenization services but also loans backed by tokenized real estate. Tokenization, also known as 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.
Release ID: 88944020