If you are an accredited investor in the United States and you’re looking to grab yourself some commercial real estate (CRE), Then Red Swan has a proposition for you. The New York-based blockchain startup has tokenized $2.2 billion worth of CRE property on the Polymath network.
There are currently about 16 different commercial properties in Austin and Huston, Texas; Brooklyn, New York; Oakland in California and a massive 150-acre piece of property in Ontario Canada. So far, as much as $780 million of that initial valuation is available for presale to interested investors.
Red Swan CEO Edward Nwokedi has revealed that this sale has been accredited by the US financial markets regulator The Securities and Exchange Commission (SEC). In addition, Red Swan is currently being considered by the commission to become a registered investment adviser allowing it to hold and manage accredited investor funds in the United States.
Tokenizing real estate has proven to be challenging as most of the players in the industry are traditional minds who may be having a hard time wrapping around the idea of a blockchain system. This has led most startups to fail in the face of such challenges, however, Red Swan believes that it has the right team to sell the idea to the market.
“Through this new technology, RedSwan will make the entire process for the recapitalization of LP and GP equity for institutional quality real estate assets much faster, more efficient, and with higher capital productivity,” Nwokedi said.
Graeme Moore, Polymath’s tokenization officer seems to think that Red Swan actually is different from its predecessors that have flanked the tokenized real estate industry.
“I think what kind of happened in the past was there were platforms like Harbor, Propellr and Fluidity, which were really tech companies,” he said adding that “they didn’t really have the real estate background or the expertise to understand how the private real estate market works.”
Nwokedi and his team have a claimed 65-year combined experience in private equity CRE and technology commerce. Nwokedi himself has been in real estate space for 18 years. He turned to tokenization as a way to make highly profitable deals more accessible to accredited investors.
“You have a very large segment of investors who are between half a million and $10 million that were not participating because they just don’t have enough equity to buy a quality piece of real estate. So they’re focused on riskier, lower class-level projects,” he said.