Business

Erik Gibbs

Eight-figure real estate deal to be tokenized

Inveniam Capital Partners (ICP) has announced that it plans on conducting a handful of real estate and debt transactions using the blockchain. The investment company is tokenizing around $260 million in four deals, giving investors a greater amount of transparency by leveraging the power of cryptocurrency to consummate the purchases. According to ICP CEO and Chairman Patrick O’Meara, “It’s a whole different world.”

ICP made a deposit on a building in Miami, Florida, using Bitcoin Core (BTC) last month. The amount of the deposit wasn’t provide, but the company will now offer tokenized share of the building, which is occupied by WeWork, worth $65.5 million. The deal is reportedly the largest real estate transaction to ever be conducted with tokenized shares. 

Three other transactions are in the works and those assets will see their shares distributed through a Dutch auction. This will allow investors to place bids on how many shares they want to purchase, what they’re willing to pay per share and which crypto they want to use. Bids will need to be submitted in any of the top 50 digital currencies, by market cap, when they launch, according to ICP requirements.

After the sale has run its course, the respective tokens will be distributed starting with the highest bid and working downward toward the lowest bid. According to ICP, “The price that every bidder pays will be based on the lowest price of the last successful bid dependent upon the bidder’s fiat-to-crypto conversion rate limit.”

Investors wishing to participate in the auction must hold a minimum of $10 million in crypto and must also place a minimum purchase request for $500,000. The sale is going to be conducted per private placement rules that are established by the U.S. Securities and Exchange Commission (SEC).

While the endeavor in itself is newsworthy, showing a real-world use case for crypto and blockchains, ICP sees the bigger picture. O’Meara points out that shares typically include a large amount of data that can prove to be useful even 20 or 30 years into the future specifically for the debt offering. All of the data will be put onto its platform and linked to the token, providing a historical record that begins from the onset of the transaction. 

O’Meara explains, “We built our entire software, our stack, everything we do, the way we tokenize the instrument is so the enormous amount of data that’s associated with the financial instrument … can be aggregated and is attached to the token.” He adds that this will make all of the data “uniquely searchable.”

He further explains, “If we can store all this data in its native form, and the way that we have surety is because of the hash and the cypher … you can literally trace, as a regulator, every document associated with this transaction.”

Real estate transactions could soon be handled almost exclusively over the blockchain. Several pilot projects have already been conducted that have allowed real estate deals to be completed in a matter of days, not weeks, and the immutable power of the blockchain ensures that there can never be any disagreement over the terms of the sale.

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