Tokenized Real Estate Falters as Another Hyped Deal Falls Apart

Removing the friction from real estate deals with tokens was expected to instantly attract institutional money and liquidity, but things are moving slowly.

Both are now working on separate tokenized loan projects involving multi-collateral Dai.A $20 million tokenized real estate deal derailed earlier this year, was down to the issuer, trading giant DRW Holdings, not seeking permission from the senior debtholder to transfer ownership.

The idea of combining blockchain tokens and U.S. real estate was peaking at the start of this year, with college dorms, ski resorts and swanky Manhattan apartment blocks lined up to redefine the commercial mortgage market.

Extensive media coverage at its launch included a video on Bloomberg featuring celebrity real estate broker Ryan Serhant discussing the fresh pastures tokenization might bring.

The seismic disruption of the multi-trillion dollar real estate market so hotly anticipated hasn't happened.

Security token offerings, which are regulated financial instruments, are a workable fit for the tokenization of real-world assets such as real estate - at least on paper.

"Tokenized real estate came with an embellished promise," said Todd Lippiatt, CEO at Propellr.

In the end, Tabar's prognosis on the calcified nature of the real estate market comes down to a broad generational impasse.

"You own the real estate minus whatever debt is owed plus whatever cash flow comes in, the history of payment and so forth. All of this goes into how one might want to evaluate something."

"We have clients with tokenized securities and there have been some trades in real estate. Is it flying off the shelves? The answer is no."