While we’re all doing our best remaining positive and productive during these challenging times, I thought I’d share with you some great resources and new industry knowledge that you can leverage to better serve your clients, friends and family through forward-thinking and technology!
My goal here is to provide you with fresh marketplace intelligence and to inspire you to experience the real estate industry in a new and different light, with innovative opportunities abound. Below, I’ve provided several helpful links if you wish to delve deeper, and please feel free to reach out to me directly with any questions.
As the 2019 National Association of Realtors® President, John Smaby so aptly stated, “Blockchain technology is quickly evolving from a theoretical concept into a resource that could become ubiquitous in our industry“. He continued, “America’s 1.3 million Realtors® will be some of the first professionals to fully adopt this technology and…NAR’s efforts continue to ensure that Realtors® will be involved in discussions on blockchain regulation at every level across the country.” Additionally, a recent NAR guidance paper on blockchain and real estate concluded that “REALTORS® and REALTOR® Associations should be aware of blockchain and the potential impact on the real estate industry.”
As an experienced real estate broker and technology advisor, I’ve learned that the real estate industry is quietly being transformed by blockchain technology in a number of critical ways. Whether you’re in residential or commercial brokerage, property management, real estate development, consulting, real estate law, title and land registry, you name it — blockchain technology is already beginning to change the game dramatically, and as real estate practitioners and/or technology professionals, being on the cutting-edge gives us a HUGE advantage, and enables us to serve as the leaders of positive change through advancing understanding and collaboration among these two spaces.
One of today’s most prevalent blockchain real estate use-cases is that of “tokenization” or the digitization of real estate assets by means of Tokenized Securities Offerings (TSOs) also known Security Token Offerings (STOs) or Tokenized Asset Offerings (TAOs) which are legal, regulated digital representations of real-world assets that are as tradeable as blue-chip stocks on global exchanges, transparently facilitating unprecedented new methods of financing, recapitalization and liquidity opportunities in what has always been the largest and most illiquid asset class globally.
A brief primer: tokenization is the process of transforming the equity, debt or cash-flow in a real estate asset through the means of a “smart contract” into a blockchain-based tradable security, just like a share of stock and regulated in the same manner. This enables property owners to recapitalize their property without the costly and time-inefficient process of refinancing through intermediaries, thus freeing their capital to invest elsewhere. Brilliant, right!?
At the core of tokenization is blockchain technology, a type of distributed ledger that secures identical copies of data across a network of authorized stakeholders. Distinct from a centralized database, there are no single points of failure for data stored on a blockchain, and unauthorized access to or alteration of data is impossible. Leveraging the secure, immutable qualities of blockchain technology, tokenization facilitates digital ownership with secure transaction records and swift settlement processes.
From single family homes to class-A commercial properties to government infrastructure projects, real estate asset equity is now being digitally fractionalized (tokenized), and bought and sold on secondary markets around the world, liberating trapped equity while creating unprecedented liquidity across a $228 trillion global asset class.
Through tokenization, the shares (tokens) created in this process are sold to investors who are then granted with many of the same ownership rights as the token sellers including dividend distributions, voting rights, asset appreciation, etc., as well as the opportunity to sell those tokens (digital representations of ownership) at their discretion, just as one would sell stock.
One of the most well-known and pioneering examples of property tokenization was the 2018 commercial Security Token Offering (STO) of the renowned St. Regis Aspen Resort in Aspen, Colorado, facilitated by my friends at SolidBlock, an international real estate tokenization-focused blockchain platform. Through blockchain technology’s secure, transparent, and decentralized ledger real estate owners can now take a real-world asset, such as this legendary 5-star resort, and sell all or some of it in many pieces as tokens, whereby new investors then own a chunk of the resort and have the ability to sell that investment P2P through global marketplaces, equally as similar as equities or any other tradeable security.
Another major recent example of how tokenization is taking the real estate industry by storm is that of Red Swan’s deal in March of 2020. My friends at the New York City-based commercial real estate firm just upped the ante in the race to facilitate tokenization in the real estate market. The firm tokenized $2.2 billion in Class A commercial properties across the United States from New York to California. This only further demonstrates the maturing of the real estate tokenization space, and now serves as one of the largest and most ambitious tokenization projects to date.
The revolutionizing impact this technology is having upon our industry cannot be overstated and is dramatically changing the dynamics of buying, selling, owning and managing property. As an experienced real estate investor, developer, broker, and blockchain technology advisor I am somewhat uniquely mindful of how this tech is bringing about much needed transparency, time and cost efficiency, and disintermediation to our industry, while enabling the liberation of the trapped equity in our real estate investments.
Over the last few years, I´ve been invited as a speaker and moderator on the intersection of blockchain and real estate at various global Proptech conferences and I´ve also been writing articles on the topic for Forbes, such as The Transformation Of An Industry: Blockchain-Based Real Estate Assets and The Future Of Real Estate Investing: A New Global Asset Class Emerges.
The very foundations of our global economy are evolving right in front of our eyes. The impact that blockchain will have on the way we live and the way we do business (especially in the real estate business) in the near future cannot be understated.
So, how do we best prepare for this inevitable and massive shift? As we all know, “change is the only constant”, so I recommend that we embrace it and position ourselves at the forefront of this transformation.
Through my work serving as a U.S. Regional Chair for the Foundation for International Blockchain and Real Estate Expertise I have had the opportunity to contribute to a ground-breaking global industry report on blockchain and real estate. FIBREE is an international nonprofit consortium of blockchain and real estate professionals with the mission to bring blockchain technologies to mainstream commercial adoption.
Last July FIBREE published our must-read 2019 Global Industry Report detailing the state-of-the-industry, its adoption and scaling by global region, country and locality, and many other helpful data-points and insights into how this tech is being utilized in the real estate industry around the world. It’s free, check it out! It’s a richly data-oriented research report developed by a globally diverse group of technology and real estate experts — truly enlightening! Also, we are currently working on completing the 2020 Global Industry Report which will be published soon so keep an eye out for that as well.
Through FIBREE, I also lead a Meetup community and hold events around this topic here in the Rocky Mountain region (virtual events moving forward for now), so if you’re interested in learning more join the Rocky Mountain Blockchain for Real Estate Meetup community so we can connect on all things blockchain and real estate! This Meetup community is an extension of the Foundation for International Blockchain and Real Estate Expertise, and is for everyone who shares an interest in learning about how blockchain tech is revolutionizing the real estate industry. Our growing community is comprised of real estate professionals and blockchain entrepreneurs, technologists, enthusiasts and the curious-minded — beginners and experts alike are welcome!
If your focus is residential real estate, I have a great recommendation that will help you better support your buyer and seller clients moving forward while gaining an advantage over other agents by entering the world of blockchain real estate.
Earn the Crypto Certified Agent™ designation offered by my colleagues at Propy, the global real estate platform that utilizes blockchain technology to conduct residential property transactions. Propy automates the entire real-estate purchasing process through full compliance with state laws, speeding the transaction through the use of smart contracts all on one platform rather than the typical siloed experience between brokers, title companies, lawyers, etc.
As the first Crypto Certified Agent in the State of Colorado and one of the first nationally, I have an advantage when it comes to assisting clients to ensure an efficient process that is fully transparent, immutable and compliant, dramatically reducing costs incurred by intermediaries, while saving all transaction participants significant time and effort — and the Propy platform can process transactions solely with fiat currencies as well if your clients are not yet comfortable or familiar with using cryptocurrencies.
If your focus is commercial real estate, you can utilize your newfound knowledge to inform your clients about the opportunities that blockchain-based tokenization offers, such as the capacity to convert all or some of the debt or equity in their properties into tokenized securities that can then be bought and sold on secondary exchanges enabling them to recapitalize, bringing about real-time liquidity without having to endure the significant time and costs of refinancing, waiting for a buyer to come along, or waiting out their loan maturity.
Additionally, for your investor clients, you can bring high-yield, tokenized real estate assets to their portfolio, assets that have traditionally been reserved for institutional-grade investors, enabling them to take advantage of top-notch, regulated property investments without having to be locked into the costs and control that REITs and private equity firms require of investors.
There are so many ways to get involved and to prepare yourself for this next generation of technology that is already revolutionizing the landscape of real estate, and these are just a few of the paths I have been taking over the last couple of years in order to elevate my knowledge and expertise in this emerging space.
In 2017, I established the blockchain advisory firm Resource Blockchain as an enterprise solutions provider for organizations making moves in the Proptech, Fintech and Greentech spaces, and specifically in the digital assets space, so if you have questions or would like to explore the idea of tokenizing real estate assets, just let me know!
Lastly, I’m currently collaborating with a friend at NAR on the development of a continuing education-qualifying comprehensive Blockchain for Real Estate course for everyone in any real estate-related industry, and anyone else interested in learning more about this emerging and powerful technology impacting the real estate markets.
Through this course you will learn about the changes that this technology will be having on real estate ownership and management, brokerage, transfer of title and the many other facets of our business, and how to leverage this technology for your clients. I’ll share with you more on this course as it continues to evolve.
I truly welcome your input, feedback, questions and comments and hope that you find interesting and rewarding ways to level up your expertise in the industry though this post.
Be kind, remain positive and stay safe!
Disclaimer: This email does not provide and should not be treated as providing legal, tax, or other professional advice.
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A bit more about my real estate and blockchain background:
President | The Mountain Life Companies™
Founder & Strategic Advisor | Resource Blockchain™
- 2019 | Green Builder Magazine® Home of the Year Award winner
- 2018 | Kaiser Permanente® Business Excellence Award winner
- 2017 | Summit Builders Association Sustainability Award winner
- Licensed Real Estate Broker — State of Colorado (cir.’07)
- LEED Accredited Professional (LEED AP BD+C) — US Green Building Council (cir.’06)
- US Regional Chair — Foundation for International Blockchain and Real Estate Expertise (Denver / Rocky Mountain Region)
- Contributor & Member of Expert Council — Forbes Real Estate Council
- Appointed 3-term County Planning Commissioner — Summit County Government
- Certified Blockchain Expert™ (CBE)
- Certified Smart Contract Developer™ (CSCD)
- Certified Blockchain Technology Professional — UC Berkeley
- Certified Bitcoin and Cryptocurrencies Professional — UC Berkeley
- IBM Blockchain Essentials Credential — IBM
- Crypto Certified Agent™ — Propy, Inc.
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