Why is security token offering in real estate a big topic? How is different comparing to REITs?



  • Why is security token offering in real estate a big topic? How is different comparing to REITs?


  • EXPERT

    From real estate perspective, we view STO as something that sits between private equity and REIT. There are two traditional ways to raise capital for real estate, either through private equity, which is still quite illiquid, or through REIT/IPOs which is very liquid but also very expensive to do. REIT definitely solves the liquidity issue for real estate investment, but because it is so expensive to structure, most of the REITs available to investors all tend to be very large portfolios of many underlying real estate assets. Very rare would you be able to find single-asset REITs. Also, REIT is traded on stock exchanges that only operate during business hours. STOs, as its cheaper to structure, can easily do single-asset tokens and these tokens can be traded 24/7.

    For more insights into STO’s check out the episode I did with Denzity here: https://youtu.be/kBSFYOc16co


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