Connecticut has recently become home to one of the first commercial properties to undergo tokenization in the United States.
REINNO, real estate tokenization specialists, have just announced the successful creation and issuance, of security tokens, representative of this property; A process which demonstrated clearly what REINNO is able to offer its clients.
While the digital securities sector is still young, we have seen various properties tokenized, both residential and commercial. This has provided accredited investors around the globe with access to potentially lucrative opportunities that they would not have otherwise.
In this particular instance however, the owners of the $2.5M property having undergone tokenization, have no intention of selling their property. Rather, they were looking for a loan.
Similar to companies like BlockFi and Celsius, REINNO is able to provide capital loans to borrowers by taking some form of collateral in return. With regards to this Connecticut based property, a multi-step process was used to facilitate such a loan.
- REINNO tokenized the entirety of the commercial property.
- The property owners may now choose as many tokens needed to be used as a pledge/collateral for their desired capital loan.
- REINNO facilitates the loan, structured on their unique risk assessment
Naturally, each of these companies offering loans utilize unique risk models, when assessing a potential loan, as the assets being put forth as collateral differ greatly.
By structuring the tokenization in such a manner, the borrowers/property owners stand to benefit on multiple fronts.
While they are obviously still on the hook for repaying the loan, plus interest, borrowers can expect to benefit from:
- Increased rate of approval
- Structuring flexibility
Speaking with REINNO CEO, Viktor Viktorov, he states that much of this flexibility is owed to the fact that borrowers can choose how much of their, now tokenized, property they would like to put forth as collateral.
With the tokenization taking place to facilitate a loan, this also means that there was no STO required, as financing was handled in-house. This greatly expedites the process of attaining capital, and saves money for deals such as this.
When it is all said and done, with the loan being repaid – collateral is returned, and the borrower has retained their asset.
Upon announcing the tokenization of the aforementioned property, the co-founders of REINNO each took the time to share their thoughts.
Viktor Viktorov, CEO & Cofounder of REINNO stated,
“That is where REINNO stands out. Unlike its competitors, REINNO provides not only tokenization but also additional services, from regulatory compliance and legal structure to lending against real estate tokens to create liquidity”
Barry Monies, Cofounder of REINNO, stated,
“Thanks to tokenization and our proprietary lending platform, leveraging an equity investment and pledging tokens to take a loan is possible in just a few minutes…Moreover, fractional ownership makes it possible to use a portion of tokens as collateral rather than putting a lien on the entire property.”
The development discussed here today comes right on the heels of REINNO’s first $105M fund, announced in late January 2020 in conjunction with REI Capital Growth.
This was a fund that was structured in a manner providing investors access to equity or debt in a fund populated by various pieces of U.S. based real estate.
Investors will be happy to hear that REINNO has managed to establish a partnership with security token exchange ‘ADAX’. In doing so, they will benefit from the much sought after liquidity which is often associated/promised with security tokens.
Viktor Viktorov, CEO of REINNO, states,
“…we are excited to have partnered with a fully-regulated security token exchange to create greater liquidity for investors.”
Founded in 2019, REINNO maintains operations in Connecticut. The team behind REINNO has developed a platform, and series of services, which merge real estate with tokenization.
CEO, Viktor Viktorov, currently oversees company operations.
In Other News
Connecticut is not the only region to begin seeing the benefits of real estate tokenization. For instance, we have seen the practice ramping up in Europe, and most recently in Africa. Peruse the following article to learn more about how Africa stands to benefit from the tokenization of real estate.