Convexity Properties announced this month the cancellation of its highly anticipated STO. The news comes as a blow to the security tokens market as this project was the first tokenized REIT in the US. Now it’s back to the drawing board for these tokenized real estate developers.
Convexity Properties previously made headlines with their advantageous approach to the real estate market. The plan was simple from a strategic point of view. Host an STO to crowdfund the purchase of a 260 unit student residence for the University of South Carolina.
The property resides in a swank downtown Columbia neighborhood and features a host of world-class amenities. These amenities included a rooftop pool deck, fitness complex, a club lounge, and spacious luxury rooms. The project gained praise from the cryptocommunity with many analysts predicting the concept to be a huge success.
It’s a No Go
Investors were to get a share of the equity in the investment. Now, it appears that the deal is not going through for a multitude of reasons. Speaking to Chicago Business, Harbor’s Spokesperson, Kevin Young explained some of the issues that resulted in the decision to cancel the Convexity Properties STO.
It appears that the main reason for Convexity Properties’ cancellation is the attitude of the buildings, current lenders. In response to the cancellation, Young spoke on the uncertainty of real estate transactions. He said that the issuer was unable to come to terms with the existing mortgage lender. He ended off his interview with some words of hope in which he said the entire concept is still exciting.
Don Wilson – Convexity Properties
The man behind the concept is Don Wilson, the Owner of Convexity Properties. He is no stranger to the real estate market and his pioneering effort to increase tokenization in the sector can’t be balked at. As an experienced investor, Wilson believes his concept is solid and he is confident a better opportunity will arise in the future.
To make the entire concept a reality, Convexity Properties partnered with the token issuance platform Harbor. Harbor is one of the top security token launch platforms in the market. Harbor utilizes the R-token protocol to ensure all tokens remain compliant throughout their life cycle.
The use of equity tokens in the real estate market is on the rise. Unlike security tokens, equity tokens represent a percentage of ownership in an asset, whereas, security tokens represent a right to a percentage of profits generated.
Tokenized Real Estate
Platforms such as Harbor offer users an all-in-one ecosystem for digital securities, equity, and private funds. Tokenized real estate brings many advantages to the table that can’t be ignored. Aside from more efficiency and security, this concept adds liquidity to stagnant markets.
Through tokenization, the entry-level threshold for real estate investments can be lowered. Additionally, local markets can accept funding from global investors when utilizing a tokenization strategy. The combination of these factors makes tokenized real estate an attractive option for both investors and traditional real estate firm. You should expect to see more concepts similar to this emerge in the coming months,