Tokenization Opens New Vistas for CRE Investors

Earlier this year, Brazilian bank Banco BTG Pactual made news in the digital coin community when it revealed it would back its blockchain-based token, called ReitBZ, with distressed Brazilian real estate assets. Perhaps even more significantly, it also said it would set up a secondary market for the tokens—that is, give investors an exit strategy.

The intended investor base for this development? Presumably anyone interested in the portfolio, which according to the announcement was to be seeded with properties in the Brazilian states of Rio de Janeiro and Sao Paulo that had been impacted by the economic recession in Brazil and now offer “potentially significant economic upside.” But as BTG Pactual CEO Roberto Sallouti made clear in prepared remarks, there was a group that specifically stood to benefit. “The technology associated with this offering allows us to be a pioneer in providing access to asset classes that have historically been difficult for global retail investors to access,” he said.

Fast forward several months to the summer of 2019, when the bank’s project has grown by leaps and bounds, exceeding the original projected $15 million of sales to reach $1 billion. It has also moved to a larger, more global blockchain and plans to use it for a number of asset tokenization projects ranging from core real estate to prominent global sports clubs, as well as equity and debt interests, according to the Tezos Foundation, which is providing the blockchain. “We see Tezos as a global player with a robust blockchain for asset tokenization” said Andre Portilho, BTG’s Partner responsible for the Security Token Offering initiative.