Tokenizing commercial real estate refers to the division of physical properties into tradeable digital tokens that will be bought by potential investors in the market.
It involves different steps like identification of the asset to be tokenized, smart contract development to store the rights and responsibilities for the token holders, deciding the supply and distribution strategy for the tokens, marketing the token aggressively across various communication channels, and providing extensive post-listing support to investors.
The advantages to reap by tokenizing commercial real estate
More liquidity as tokens can be bought and sold by investors easily without facing any restrictions.
The barriers to investment are decreased for small investors as even a small amount of $10 can be invested in real estate tokens to obtain fractional ownership.
It is resistant to manipulation due to immutability. This prevents the chances of scams or fraud.
There are no intermediaries like brokers and agents in the process and property deals can be directly signed between the interested buyers and sellers.
Smooth processing of transactions is ensured through integration with multiple payment service providers (PSPs).
Since all the investors are subject to KYC/AML verification, it creates a lot of trusts and a high level of authenticity.
Voting rights are embedded along with the tokens giving investors power to participate in the governance of the tokenization platform.
Tokenizing commercial real estate will lead to positive transformation for the entire industry by enhancing efficiency and cutting down unnecessary expenses. The property will be viewed as a viable investment avenue due to the phenomenon of tokenization.