How will commercial real estate and banks get on board with blockchain?

Fordham Real Estate Institute brings together top minds to share intel for capitalizing on “token economy”
New York, N.Y. (July xx, 2021) – Tokenization, the process of converting assets into digital tokens on a blockchain, holds the potential to unlock trillions of dollars in global real estate assets by fundamentally changing the way investors invest. And while some observers warn of tokenization as an industry disrupter, others caution those who are not prepared for the new “token economy” risk being left behind. These and other trends were discussed July 8 at a virtual panel of financial and legal experts hosted by the Fordham Real Estate Institute (REI).

More than 300 professionals registered for “Get Ready: Tokenization, Blockchain, and Crypto Currency Is Coming to Real Estate,” which focused on best practices for using emerging technologies. The session included discussions on the technology’s potential and the overall benefits of a token economy, as well as the biggest challenges to wide scale adoption of tokenization and issues of cybersecurity.

The panel featured Donna Redel, an angel investor and blockchain-digital assets professor at Fordham Law, and David Otto, attorney, co-founder and Managing Partner of Marin Davis, PLLC. The discussion was moderated by Daniel Mee, President of Dillon Capital Advisors, LLC.

Mee asked the panel to explain how tokenization could benefit limited partnerships and limited liability companies, in terms of investments. “Liquidity seems to be the big benefit here,” said Mee. “Can’t we just get liquidity by allowing the limited partners or members of LLCs to sell their rights freely? Why do we need blockchain? Why do we need tokenization?”

“It’s a higher, more secure, more fluid and more transparent mechanism for the distribution and transfer of interests, and the recording of those transfers,” said Otto. “So, there’s immediate transparency, there’s immediate transfer and there’s a considerable amount of cost-savings on the administrative side. The ability to transact immediately, at a low cost, with transparency and to be cryptographically secure is meaningful.”

Otto noted a particular advantage for smaller investors: “From a small investor’s standpoint, tokenization will enable democratizing access to an asset class, commercial and residential real estate, that heretofore has been unavailable.”

The panel also noted that certain larger players – particularly banks – have not stepped up to the plate and are missing an opportunity in the token economy.

“Banks have completely missed the whole crypto evolution,” said Otto. “Banks are a natural site for onboarding crypto wallet holders and parties that want to be involved in crypto currency. Name one bank that’s done it.”

Mee also noted issues of cybersecurity, citing recent attacks on certain U.S. sectors, including energy and food processing, and questioned whether there are similar concerns for the token economy.

“This whole area is one big startup, and there are many, many startups within it,” said Redel. “You have to be reasonable – you can be excited about the technology, excited about the individual company, but you have to apply the same due diligence that you do to anything else, with any other investment or any other new technology. You have to look at who’s selling, why they are selling, what promises they’re making, what the white paper looks like, etc. Anyone who thinks money is a fast thing to make, go back to your principles of how you look at any investment.”

“It is so important to have these though-provoking conversations, so we can contribute to the discussion on cutting-edge issues that will impact the real estate industry and society as a whole,” said Lou Mirando, President of Streamline Realty Funding and Chairman of the Fordham Real Estate Institute Advisory Council. “Today, our expert panel gave us an inside look at the token economy and how to benefit from the convergence of real estate investing and blockchain technology.”

“Get Ready: Tokenization, Blockchain, and Crypto Currency Is Coming to Real Estate” was part of the Fordham Real Estate Institute’s Visionary Series CCL, a five-year campaign tied to the 250th anniversary of the United States in 2026. A recording of the session can be found here.

ABOUT THE FORDHAM REAL ESTATE INSTITUTE
The Fordham Real Estate Institute currently offers a Master of Science in Real Estate, a Master of Science in Real Estate Development, Master of Science in Construction Management, advanced graduate certificates in real estate finance, development, management and construction management, a Bachelor of Science in Real Estate, and a comprehensive array of professional certificates in real estate and construction at its campuses in Manhattan and West Harrison, N.Y. The programs are developed and taught by leading industry practitioners and are centered on imparting real-world professional skill sets. Flexibility and convenience are program hallmarks as classes can be taken in-person, online, and at various paces. REI is a part of Fordham’s School of Professional and Continuing Studies. For more information, visit www.fordham.edu/realestate.

Discussing “Get Ready: Tokenization, Blockchain, and Crypto Currency Is Coming to Real Estate” at the July 8 Fordham Real Estate Institute event were, clockwise from top left: Daniel Mee, President of Dillon Capital Advisors, LLC.; David Otto, attorney, co-founder and Managing Partner of Marin Davis, PLLC; and Donna Redel, an angel investor and blockchain-digital assets professor at Fordham Law.