RFR Holdings, the majority stake holder of the Chrysler Group building in Zurich, had decided to part with its ownership, partially in tokenized securities.
Blockchain Real Estate
The sale is being made to a blockchain based real estate company, BrickMark. According to the firm, it will be paying 20 percent of the deal in the shape of its native tokenized security, BMT. The deal, however, gives BrickMark 80 percent of the building. The blockchain real estate firm has the option to buy off the rest of the building by September.
Stephen Rind, the CEO of BrickMark, claimed that the deal was the largest in the world that involved digital tokens,
“There has never been a token-based real estate transaction of this magnitude. We are implementing what was once no more than a concept in the real estate industry,”
The actual amount of the Chrysler building deal has not been disclosed, but the building is tagged in the market to the tune of USD 135 million. The building itself stands in the street of Bahnhofstrasse, which is the most premium market in the world. A typical rent ranges from USD 13,000 to 15,000 per square meter.
The sale of the Chrysler Building sees the first use case of BrickMark’s hybrid tokenized securities, BMT. BMT are basically blockchain based perpetual bonds that are backed by properties owned by BrickMark. The portfolio, however, only has the Chrysler Building at the moment.
The platform has, however, enough finances to acquire further properties. According to its website, it has roughly USD 1.1 billion worth of assets.
Expanding Into an Inaccessible Estate Market
The BrickMark blockchain ecosystem has expansion plans in its working, with eyes on a USD 55 million financing to start purchasing of high value and premium real estate all over Europe and even North America. A legally fully compliant platform, the BMT tokens are registered securities. In the initial stage, the tokens are only offered to qualified institutional investors, but has plans to expand to offer the tokens at a retail level through a security token offering (STO) under European laws.
Rind believes that the opportunity is ripe for using blockchain and security tokens to bring down entry barriers of a nearly USD 80 trillion market,
“Only 3 percent [of investable real estate] is available for investors through public listed real estate companies or real estate-backed bonds or funds structures. We think digital securities and tokens are able to unlock these tremendous values and also give people, on a worldwide basis, access to properties that have [to now] been privileged.”
With an international pressure on blockchain platforms by financial regulators on the legality of cryptocurrencies and associated tokens, the use of security tokens that comply with set rules will also be a boost for the decentralized ledger industry.
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