Cryptocurrencies are now a significant thing in the market. The population of people owning Bitcoin, Ripple, Litecoin, etc. continues to increase daily and now includes over 30 million people in the United States alone.
Cryptocurrencies are facilitating open markets with personal autonomy and no middle men. And, let’s be honest, that frustrates a lot of powerful people. There are over 2.5 million items that you can buy using cryptos! What you may not realize is that commercial real estate is one of them.
Forward-thinking developers and funds are offering options to invest into their commercial real estate projects using these digital currencies, often right alongside institutional equity. It’s an attractive option – particularly for many who are seeking to invest their crypto profits into a historically stable asset class. Of course, with any investment, do your own research and choose wisely.
Early movers in this space, like the Lucky Shepherd family of companies, are quickly establishing themselves as experts.
“For many, Bitcoin serves as a store of value. Today’s gold, if you will,” explains Christine Menedis, co-Founder and CEO of Lucky Shepherd’s portfolio. “Now, let’s say Bitcoin takes a nice run, like it has recently, does it make sense to take something off the table and balance your investment portfolio? We’re seeing a lot of people say ‘yes’. What that investment is has to make sense to you – has to align with your goals, values and risk tolerance.”
Our introduction to Menedis’ companies came when researching a different topic of tokenized real estate, something crypto realty investors will intuitively understand. Simply speaking, it harnesses the benefits of blockchain – moving the cap table and all transactions and corporate governance on chain, and providing the investor with a token to hold in their digital wallet rather than a paper certificate. The appeal to many is that tokenized real estate offers a unique benefit of liquidity after any requisite SEC-mandated hold periods, as numerous exchanges are now available.
Commercial real estate tokens are security tokens, which means they derive their value from an external, tradable asset or are collateralized by an asset that has security-like features. Think stocks, bonds, etc.
It’s important to note that crypto tokens are not crypto coins. As you know if you’re one of the 30 million aforementioned investors, crypto coins are digital assets native to their own blockchain. For example, Litecoin (LTC) operates and functions on the Litecoin blockchain. And, as we’ve been discussing, you can use these coins to pay for goods and services. Crypto tokens, on the other hand, are created on existing blockchains. The most widely used is the Ethereum platform, with either ERC-20 or ERC-1404 tokens.
Shepherd describes itself as a “new breed” of developer, and it’s true. We were intrigued for one simple reason: They’ve correctly recognized commercial real estate as a platform rather than a mere industry, and positioned themselves accordingly with both real estate and technology holdings in their portfolio. Beyond crafting consumer-facing brands, the group fuses crypto investing, tokenization of its properties, implementing exciting new types of sustainable flex construction techniques, and, let’s not forget one of the biggest opportunities in the industry today, crafting entirely new types of built environments – truly personalized, intuitive spaces. Ones that react to and adapt with you throughout the day. The type of spaces that, frankly, we won’t be able to believe we ever lived without.
“When we shift to the sensor and voice-driven environments, we get amazing spaces that feel ‘just right’,” explains Menedis. “We enable people to put the tech down and focus on human connections and experiences – that ever-important sense of community. All with enhanced conveniences.”
From blockchain to AI, tech is great. But far better when used to foster experiences we can’t wait to have again. After all, if the commercial real estate better be worth it if you’re parting with your crypto.