Inveniam is tokenizing real estate — but is the world really ready for this?
Read enough cryptocurrency news sites and it won’t be too long before you hear about tokenization of real-world assets. However, like most things blockchain, that remains purely hypothetical. It doesn’t express itself in the form of an open real estate auction tokenizing Miami’s WeWork building.
Inveniam Capital Partners is looking to raise some $270 million for four different projects. These include the WeWork building and luxury apartment development on Florida’s Gulf Coast. There’s nothing unusual about that. What’s really causing a stir, however, is that this is one of few times an auction like this is open to cryptocurrency investors. Oh, and that all proof of ownership will be manifested in tokens.
There’s no shortage of platforms springing up talking about democratizing access to wealth and allowing Average Joes to invest in previously off-limits projects like real estate — but most of them are still waiting for the regulatory nod within their jurisdictions.
That doesn’t appear to be the case for Inveniam. We’re also not talking about ‘Average Joes’ either since the minimum you can invest is $500,000. Pat O’Meara, who leads the New York company offering the investment enthused:
This is brand new in capital markets transactions where the actual data is maintained electronically… The way people evidence that ownership is through that token in their wallet.
It’s ‘Hard to Be First to Market’
There has been a handful of real estate deals conducted in this way — but none of them match the size and scope of this one. While the company is enthusiastic, several Florida attorneys remain a little cautious.
Founding partner at Silver Miller and attorney David Silver said:
It’s hard to be the first to market, and this is one of the first and largest projects that is trying to tokenize real estate and infrastructure investments. Until I see regulators and institutions investing without problems, I am going to be slow to endorse the investment platform, and I continue to be hesitant in my recommendation… I am more cautious than not given what I do for a living, especially in the cryptocurrency space.
Fellow attorney Jesse Fulton echoed his concerns stating that investors should be “very, very, very cognizant of what [they] are entering into.”
Still, Inveniam Could Be Sparking a Trend
Still, there’s always the real possibility that Inveniam is sparking a trend in the way that real estate ownership is handled. There’s also the possibility that investors will be scammed out of their money and left with tokens in their wallets. However, this one’s limited to institutional investors — or investors with extremely deep pockets). Silver added:
I am happy to see that this is happening because I want sophisticated investors who understand how to do due diligence into projects like this to be the ones starting out the investment process.
Inveniam already has several smaller cryptocurrency deals under its belt, but this is the first time they’re looking for such large amounts or accepting such big sums of money in cryptocurrency. Cash is also an option.
As they receive the bids, they will convert the tokens into cash using Grapefruit Trading, a company that provides liquidity for cryptocurrencies. They will then invest in the four projects. All investors’ stakes will be tokenized with the proof of ownership in a digital wallet instead of a contract or deed. O’Meara explained:
This tokenized interest will be sent back to their wallet. That’s an about a 15-minute process.
He also expressed his hopes that this type of investing would open up such assets to people previously without access an “off-the-beaten-path places.” There’s no barrier to entry with this type of investment — as long as you have an extra half a million dollars hanging around, of course.
What do you think of tokenizing real estate? Let us know your thoughts in the comments below!
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