In 2022, commercial real estate tokenization will likely become a known quantity as more companies and investors take advantage of the many benefits of fractional interest. Through this process, investors can purchase as little as a single token, a fractional interest in a particular property or asset, which is then placed on the blockchain and listed for sale. While tokenization is new to some investors, this modern process makes investing in commercial real estate more accessible than ever.
It also solves some real problems in investing and commercial real estate. The top three issues tokenization tackles with ease are accessibility, liquidity, and diversification.
1) Lack of accessibility: Commercial real estate isn’t exactly known as the most egalitarian investing realm. Previously, investors had to have a significant amount of capital to invest in real estate, and many had to be located near the investment properties to access these opportunities.
That has all changed. Tokenization democratizes the process, providing access and opportunity for all. In addition, being able to purchase a fractional portion of a commercial real estate portfolio opens doors to new investors across the globe, who can be located anywhere as they make their foray into the world of commercial real estate investments.
2) Lack of liquidity: Tokenization has flipped the script once again. Where commercial real estate investors previously had to wait until a project was completed to sell or update their investment, tokenization provides a whole new world of liquidity. Because the assets are liquid, investors can sell whenever they choose.
Many investors tell us how vital liquidity is to their investment decision-making; this makes tokenized real estate an ideal option and opportunity. With tokenization, you are in control of your investment at all times, which is empowering and encouraging, especially for newer investors.
3) Lack of diversification. Diversification matters to all parties—it welcomes more investors to the table, who then enjoy a more diversified portfolio, while also helping organizations raise capital faster from a larger audience pool. ABC Tokens encourages investors to seek diversification in their portfolios and supports the industry at large by selling tokens that allow more individuals to invest in commercial real estate.
Tokenization in real estate quickly solves the issues of accessibility, liquidity, and diversification while also delivering efficiencies, security, and transparency for commercial real estate investors.