Tokenization is the process of developing a virtual token on a blockchain to represent a fractional ownership of a real-world asset. In the context of real estate, that asset could be the property itself, ownership interest in a legal entity that owns the property, debt secured by the property or a right to income from such property.
Tokenized real estate has the potential to revolutionize the way in which investors and sponsors finance, purchase, hold, earn income from and sell real estate assets.
Tokenization offers unique advantages over existing investment options. Such advantages include:
- Access to global investment pool;
- Reduced barriers to entry for investors;
- Security; and
Our firm can guide real estate sponsors, owners and operators through the process of tokenization – from devising an appropriate legal and corporate structure to implementing the real estate token sale in compliance with all applicable regulations.
Comprehensive Guidance in the Face of Complexity
From a legal, practical and technical perspective, real estate tokenization is a highly sophisticated and cutting-edge process. We offer comprehensive guidance and help our clients understand and effectively plan for the complex web of factors, which can impact real estate tokenization transaction:
- Type of real estate to be tokenized (income-producing, development site, trophy properties, etc.);
- Type of interest, appropriate structure (fund, SPV, hybrid) and jurisdiction;
- Tokenization ratio;
- Encumbrances or clouds on the title of the property;
- Smart contracts used to define the token rights and to implement the token sale;
- Federal and state securities laws and regulations;
- Federal and state tax and reporting requirements;
- Keeping track of the holders of record, reporting obligations and re-sales; and
- AML/KYC and investor accreditation requirements during the token sale and secondary trading, if any.
Dilendorf Law Firm understands a multitude of issues and how they can impact the tokenization process. We apply our deep knowledge of real estate, tax and securities laws with our experience of launching blockchain assets to help our clients successfully navigate the legal, practical and technical complexities that come with the tokenization of real estate.
Real Estate Tokenization
Dilendorf Law Firm
60 Broad Street, 24th Floor,New York,New York-10004,
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Legal services for tokenizing real estate