$10 million Fund
In a new round of funding, CityBlock Capital is making $10 million worth of equity in their NYCQ Fund available to investors. This sale is being facilitated through placement agent, US Capital Global Securities.
The NYCQ fund provides global investors with exposure to the New York real estate market. This is done by selling digital securities representing fractionalized ownership in the fund, which is backed by strategic real estate purchases. Investors benefit, not only through the profits seen due to increasing property values, but through increased liquidity as well.
Naturally, as the tokens to be distributed represent equity in the form of a digital security, the investment opportunity is currently open to only accredited investors.
This is not the first time that CityBlock Capital has taken part in a digital securities offering. In February, 2019, CityBlock Capital announced that a similar event would be hosted through SharesPost.
In addition to facilitating the $10 million offering on behalf of the NYCQ fund, US Capital Global Securities has gained exposure, themselves, by including the fund within their own portfolio. This places the fund alongside other investments such as the following noteworthy companies.
US Capital Global Securities is not the only company to note the high-potential of the blockchain industry. The following companies have also built funds tailored around companies developing products and services furthering blockchain.
US Capital Global Securities CEO, Charles Towle, took the time to speak on what this offering affords investors. He stated,
“Combining low minimum investment amounts and early liquidity opportunities, the Fund gives accredited investors access to blockchain infrastructure investments normally available to institutional investors…Our firm is keen to back forward-thinking strategies at the frontline of the digital market era. The opportunity to participate in this $10 million equity investment in the Fund is still open to eligible investors.”
Headquartered in San Francisco, CityBlock Capital was launched in 2018. The company works to provide investors with access to tokenized VC funds, such as the one discussed here today.
Cofounder and Managing Partner, Robert Nance, currently oversees company operations.
US Capital Global Securities
US Capital Global Securities is an affiliate of ‘mother company’ US Capital Global. Headquartered in San Francisco, US Capital Global was founded in 1998. Above all, the company acts as a private investment bank, offering products facilitate with innovated FinTech solutions.
Chairman and CEO, Jeffrey Sweeney, currently oversees company operations of US Capital Global, while operations at US Capital Global Securities are overseen by CEO, Charles Towle.
In Other News
Many of the companies discussed here today have been covered within our news feed in recent months. The following are a few articles discussing developments surrounding them.
Byte-Sized Investing with Fraxtor
Democratic Investing with Fraxtor
Another company is looking to make their mark on the digital securities sector, as they ramp up operations surrounding their real-estate investment platform.
Naturally, as these types of investments represent ownership in an underlying asset, with an expected positive return over time, the Singaporean government views them as securities. What this means is that participation is restricted to accredited investors only, at this time.
Fraxtor notes a distinction in what separates their projects apart from others. Specifically, the vast majority of real estate based investment opportunities are restricted to developed properties. While these may represent great investments, the ability to gain exposure to such an asset on the ground floor typically proves to be more lucrative in the long run.
The issue with this, however, is that the amount of funds needed to invest in yet-to-be-developed properties is financially prohibitive. The result is that these opportunities are typically restricted to large property developers, not retail investors.
Fraxtor saw this, not as a problem, but as an opportunity to leverage the capabilities of digital securities, bringing the masses access to such investments; essentially democratizing real estate investing.
Representatives from each, Proptech and Fraxtor, took the time to elaborate on the need for their solutions, and how they will work.
Oliver Siah, CEO of Fraxtor, states,
“Investing in premium real estate is often out of reach for the average investor as it requires high capital outlay and is very illiquid. This makes property investment riskier for investors as they are not able to effectively diversify their portfolio. REITs, on the other hand, do not provide the returns that Private Equity Real Estate Funds can achieve. With Fraxtor, I hope to be able to democratize real estate investment…We have placed a digital wrapper around a physical asset which allows us to issued digital securities to our global investors so that they are able to participate in that particular investment.”
Jordan Kostelac, Director of Proptech, states,
“Now everyday investors like you and me can actually own a piece of grade A office tower in the biggest cities in the world. From an asset holder standpoint, it creates new sources of liquidity and allows them to improve that asset or creating yields from that asset by dividing up the ownership. In the same way as companies do in public offering of their equity.”
To date, Singapore has established themselves as one of the leading countries, with regards to acceptance of digital securities. Not only does the Monetary Authority of Singapore (MAS) host a FinTech Sandbox, they have been quite forward thinking with their endorsements towards companies such as iSTOX. Check out the following articles to learn a bit more about a few Singaporean based endeavours.
Operating out of Singapore, Fraxtor was founded in 2017. This young company specializes in bringing real estate based investments to the masses, through the use of blockchain based technologies.
CEO, Oliver Siah, currently oversees company operations.
Tokenizing London Penthouses and Greek Island Villas
Luxury Real Estate
With multiple STOs already on the docket from a variety of asset classes, Smartlands has just announced a new collaboration, which will, hopefully, see the addition of multiple more. This move sees the UK based company partner with Sotheby’s International Realty.
This collaboration will see the pair explore the feasibility of tokenizing multiple pieces of luxury real estate. The company notes two specific properties as holding the potential for tokenization.
- Greek Islands Villa
- London Penthouse Apartment
While details on the STOs are scarce, for the time being, it is indicated that the Greek Islands Villa is under management by a world renowned hotel network.
This collaboration spurred Smartlands’ Executive Director, Katharine Manderfield, into commenting. She stated that, “Deals of this level of exclusivity will open a new page in asset tokenisation.”
While many are still figuring out their first steps within the world of digital securities, Smartlands remain one of the few companies to have successfully completed an STO. Not only that, but they are now moving on to subsequent opportunities.
Like any experiences, they have the ability to shape our future actions. Expect Smartlands to learn from their past capital generation events, and apply that knowledge to the development discussed here today. The following articles take a brief look at just what these previous successes were.
Due to the nature of real estate, it has caught the attention of various tokenization platforms from more than just the United Kingdom. While there have been hiccups along the way – such as the failure of Fluidity and Propellr – real estate continues to be one of the more lucrative industries, which stands to be transformed by digital securities.
Despite beginning to branch into different sectors, such as commodities and disruptive start-ups, expect for real estate to remain a popular outlet on Smartlands’ path to reaching the goal of tokenizing $1 billion in assets.
Speaking with Arnoldas
Roughly 6 months ago, we were fortunate enough to have completed an exclusive interview with the then CEO of Smartlands, Arnoldas Nauseda. While he has since transitioned into the role of Chairman, our discussion with Arnoldas Nauseda remains relevant today, offering a glimpse into Smartlands operations.
Sotheby’s International Realty
Founded in 1976, Sotheby’s International Realty is a United Kingdom based company. While many associate the name Sotheby exclusively with fine art, there are company branches, such as Sotheby’s International Realty. This branch specializes in facilitating the buying/selling of real estate, with a presence in over 60 countries.
CEO, Philip A. White, currently oversees company operations.
Founded in 2017, Smartlands is a tokenization platform, which operates within the United Kingdom. Through use of the Stellar blockchain, this forward thinking company has developed a variety of solutions built to make fractionalized ownership of real world assets accessible to the masses.
CEO, Ilia Obraztsov, currently oversees company operations.
In Other News
Not content with opportunities based solely in the United Kingdom, Smartlands recently took their first steps towards operating within the United States. These steps were taken by forming an alliance with a U.S. based broker/dealer, bringing support for state-side investors on their platform.
XIN Group Tokenizes NY Properties – UPRETS
This week, the Chinese-based tokenization platform, UPRETS announced plans to begin tokenization of several condominiums in New York owned by the XIN Group. The news showcases how blockchain technology continues to upend the real estate markets globally. Additionally, it represents a more international approach to real estate liquidity concerns.
In order to accomplish this monumental task, UPRETS formed a strategic partnership with the Xinyuan Real Estate blockchain platform. Together the firms intend to offer investors a stake in the XIN Group’s Oosten Property holdings.
XIN Group – New York Properties
These luxury condominiums are located in Williamsburg, Brooklyn. The units feature a modern floor plan with 2-3 bedrooms per unit. As you would imagine, NY property values are through the roof. Recognizing the growing demand for these properties, XIN Group intends to fractionalize the ownership of these highly sought after units.
Fractional Ownership – UPRETS
Tokenization removes most of the boundaries preventing people from investing in real estate. For one, there is far less paperwork to get approved. Additionally, investors can make micro-investments in order to diversify their holding accordingly.
In this instance, each token will represent a $1 share in the ownership of the properties. In this manner, anyone can begin their real estate investment career. Additionally, these low investment entry levels provide much-needed liquidity to the local real estate markets.
The properties tokenization will take place on the UPRETS permissioned blockchain. This unique and highly functional blockchain is based on X-BOLT consortium chain. Consequently, it provides users with added functionality when compared to other options.
Flexible Blockchain – UPRETS
For example, the UPRETS blockchain design is meant to be flexible. The blockchain can communicate with other blockchains to facilitate a more streamlined payment system. Currently, payment can be made via the Bitcoin blockchain. Notably, developers hope to expand these capabilities to include Ethereum investors in the coming weeks.
This added interoperability allows URT tokens to trade on a wide variety of secondary markets. Consequently, more liquidity is added to the entire investment process with this strategy.
Property Tokenization is on the Rise
The XIN Groups’ advantageous strategy is now the new normal. Every day new property tokenization firms emerge. The benefits provided by these companies are too much to ignore. Tokenization opens local real estate to international investors and streamlines the entire sale process in a way previously unimaginable.
Additionally, Tokenization allows the average person to invest in real estate without putting forth a huge amount of funding. Traditionally, real estate investment takes a considerable amount of cash. Plus there are tons of regulatory and financial hoops one must jump through in order to complete a traditional property sale. Tokenization eliminates a large portion of these requirements.
XIN Group – Moving Forward
The XIN Group is at the forefront of the tokenization revolution. When you consider how desirable a spacious condominium located in New York currently is, it’s easy to see the logic behind choosing these properties. As such, you can expect to see this trend continue until the majority of all real estate sales occur via the blockchain.