By Bill Taylor/ Fintek Capital
Want to own part of a luxury hotel? How about a super luxury Aspen hotel? Well here is your chance to do that AND get a glimpse of how financial deals will look in the future. The St.Regis Hotel in beautiful Aspen, Colorado is going to be sold on the blockchain. Actually, the blockchain sale was a second choice but it is groundbreaking.
Elevated Returns, a New York-based asset manager, wanted to use the property to create a single-asset REIT earlier this year but the IPO just didn’t get any traction. So, pivoting to a new strategy, Elevated Returns is linking up with Indiegogo (a crowdfunding website) to tokenize the luxury ski resort. Investors (new owners) will buy tokens representing equity in the hotel. It’s a first.
Several other companies are working on projects to issue tokens backed by real estate, but many of those are more broad based and certainly will not have the cache’ of a luxury property in a very high profile town. Obviously should this deal be successful (and we will know next month), the technology behind blockchain will again be proven to a game changer in a new sector………real estate. Oh, by the way, it looks like a $200 million deal. Huge.
In the words of Stephane De Baets (Elevated Return’s founder);
“As a firm, we’ve always been searching for ways to inject liquidity into the real estate [asset] class. A lot of money is being deployed towards real estate tokenization platforms. We wanted to be the first one to tokenize” a flagship property.
The planned IPO scheduled for earlier this year (and approved by the SEC) ran into the classic case of a mismatch of the sellers’ perceived valuation and investors’ appetite for buying. So, hopefully, the SEC will “bless” this security token offering (STO) and usher in a new way to complete real estate transactions. Only accredited investors will be eligible to purchase the digital tokens.
Security tokens are the wave of the future, so good luck with the offering and EXTRA good luck dealing with the SEC.
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews