Tokenization of Commercial Real Estate: Offering and Trading Property Investments on the Blockchain

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, December 15, 2021

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Course Materials

This CLE webinar will discuss the process of creating a tokenized real estate offering and the risks and benefits for issuers and investors to consider in connection with a real estate token offering, its administration, and subsequent transfers.

Description

The adoption of cryptocurrencies and the emergence of blockchain platforms have made real estate tokenization a potential capital-raising option. With tokenization, ownership interests in real estate assets can be more immediately bought and sold, but tokenization requires a thorough understanding of the technology, the offering process, and the regulatory issues involved.

Investors typically invest in real estate through an LLC or limited partnership that owns an underlying property. With tokenization, LLC or LP interests are in the form of tokens that can be traded or used as collateral in smart contracts. The issuer must determine the number and type of tokens and select an exchange platform for trading.

The issuer must also decide whether a security is being offered and registration is required. Offering documents may include operating agreements, subscription agreements, and a private placement memorandum. Offerings must also comply with KYC requirements and have appropriate protection of user data.

Tokens should have built-in compliance features such as restrictions on transfers and secondary trading. Issuers will also need to determine how distributable cash will be paid (perhaps using stablecoins or other digital currency).

Listen as our authoritative panel discusses these and other matters associated with commercial real estate tokenization.

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Outline

  1. Emergence of blockchain technology and digital assets
  2. Real estate tokens contrasted with traditional LLC and partnership interests
  3. Issues in tokenization
    1. Compliance with securities laws and creation of a smart contract
    2. Determining number and type of tokens, and the exchange platform
    3. Offering process: confirmation of investor accreditation and listing of tokens
    4. Administration: distribution of profits or other payments to investors

Benefits

The panel will review these and other critical issues:

  • What advantages do digital tokens have over traditional real estate investment vehicles?
  • What are the securities law implications of tokenization? Is registration required?
  • How should a token offering be documented?
  • What are the transfer restrictions to build into a real estate token? What are the AML concerns?

Faculty

Dilendorf, Max
Max Dilendorf

Founding Partner
Dilendorf Law Firm

Mr. Dilendorf’s practice is focused primarily on digital assets, cryptocurrency, and technologies that drive...  |  Read More

Enayati, Herman
Herman Enayati

Partner
Rimon

Mr. Enayati is an accomplished real estate finance attorney working to help owners, investors and operators buy, sell...  |  Read More

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