The Benefits of Tokenization in the New York City Real Estate Market

The growth of crypto is causing the New York City real estate market to broaden.  What triggered this crypto-real estate revolution?   In 2018, Elevated Returns, an asset management firm in New York City, completed a tokenized real estate deal on Ethereum blockchain.

The company invested $18 million in St. Regis Resort in Aspen, Colorado.  St. Regis Resort is a high-profile property.  The methods of raising capital through crypto, blockchain, and tokenization, were unusual, and as a result, investors and blockchain communities became intrigued by what was going on.

It didn’t take long for word to spread about crypto and blockchain’s role in real estate tokenization.  This led to the first tokenized, 12-unit Manhattan development valued at $30 million.

Let’s break down what tokenization is to explore the benefits it has on New York City real estate.


A Brief Review of Crypto and Blockchain

To fully grasp how tokenization broadens the New York City real estate market, you must first understand a bit about crypto and blockchain technology.

Crypto gets quite a bit of hype, but the database technology that makes crypto what it is, blockchain, is often overlooked.  Without blockchain, there would be no crypto.

In simple terms, blockchain is a decentralized data structure that records transactions to keep information secure yet transparent.  An easy way to describe blockchain is a series of records stored as blocks with no controlling authority.

It’s impossible to tamper with data stored on a blockchain because each operation is secured with an encrypted digital signature. All of the data stored on a blockchain is available to all network participants so that no third party is needed.  This eliminates the possibility of fraudulent activity or duplicate transactions.

Blockchain technology is expected to become a $40 billion market by 2025. This technology offers tremendous growth opportunities to New York City real estate investors because it invites cryptocurrency into real estate investing using tokenization.


What is tokenization in real estate?

Real estate tokenization combines real estate investing and blockchain technology to securitize transactions and make them much more available to investors of all walks of life.  Owners divide the property into shares or tokens and then sell those tokens to investors on a crypto exchange.

On a broad scale, tokenization is a movement that creates opportunities for fractional share investments in real estate—similar to investing in a company.

Real estate tokenization unlocks numerous prospects for both investors and property owners.  For owners, tokenization is an excellent way to raise capital. Investors benefit from tokenization because it offers transparency while giving them access to private real estate deals.


How does one tokenize New York City real estate?

If you wish to tokenize your New York City commercial real estate, you will need to tackle three tasks.

Find a platform that can store assets in the form of blockchain. To complete this step, you need to find a blockchain that offers the authority to store ownership.

Make sure the blockchain you use allows users to transfer assets.  It’s not enough to be able to store the rights of your property.  You should also be able to transfer the rights to others.  Make sure the legal measures and authority are in place to grant transfer as well as storage rights.

Create a value for your tokens to be exchanged.  Like anything else bought and traded on an exchange, your tokens need a value so that buyers can purchase a specific amount of tokens for a set price.

You will need to pay close attention to a few additional factors when you tokenize your New York City real estate. One important thing you will need to consider is mortgages.  If the property you wish to tokenize has a mortgage associated with it, that mortgage will need to be settled.  Otherwise, you will need to go through the necessary legal channels to get permission to tokenize the property.

Another thing to consider is how you will track your token holders.  Suppose your property is spread out among several investors. In that case, you will need to make sure that the exchange you are using offers you the ability to track primary and secondary assets trading.

Lastly, you will want to think about international rules.  The rules for security offerings vary from country to country.  You will need a way to monitor these rules so that you are following them.


How do New York City commercial real estate investors benefit from tokenization?


One of the most significant benefits tokenized real estate offers the market is liquidity. Real estate investment traditionally required capital to lock-in.  Tokenization makes your assets liquid which allows for smaller shares that owners and developers can sell.

Another significant advantage of tokenized real estate is speed. You are removing the middleman.  There is no need for underwriting projects because investors can trade tokens instantly on the exchange–similar to the stock market.

How will tokenization affect the future of New York City real estate?


In the past, only those with a robust real estate connection were privy to the most exciting real estate offerings.  Tokenization changes this.  When a property is tokenized, investors in all facets can invest in New York City real estate.

Since tokenization gives buyers the opportunity for fractional ownership of a property, they are even more enticing because they aren’t bought and sold on traditional exchanges where local hour dictates trading.  Investors, from small-time retail traders to big-time real estate gurus, can trade tokens across international borders at all hours of the day, which invites global investors into the New York City real estate market.



Tokenization puts real estate on the fast track to 21st century investing. Fractional investment and turning real estate into a liquid asset will continue to grow because many investors claim it’s a better way to remove the pressures associated with traditional bank financing.  As a result, projects become much less burdensome for stakeholders.

Without a doubt, tokenization is paving the way to a new forefront in New York City real estate investments.