Tokenization of Commercial Real Estate: Offering and Trading Property Investments on the Blockchain

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Real Property - Finance
- event Date
Tuesday, November 29, 2022
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will discuss creating a tokenized real estate offering and the risks and benefits for issuers and investors to consider in connection with a real estate token offering, its administration, and subsequent transfers.
Faculty

Mr. Wachtler advises clients regarding all aspects of real estate finance, development, acquisitions, sales and leasing, and land use matters. He has also counseled clients in connection with complicated corporate, partnership, and limited liability company transactions involving real estate companies and real estate joint ventures and debt and equity financings. Mr. Wachtler has advised lenders and borrowers in financing transactions including mortgage, mezzanine and preferred equity transactions. He also has significant experience negotiating license and access agreements between neighboring property owners in connection with construction and development. Mr. Wachtler is a member of the firm’s Blockchain and FinTech team, helping clients bridge the intersection between blockchain, FinTech and Real Estate.

Mr. Cianci represents hedge funds, private equity firms and their portfolio companies, manufacturers, health care and life sciences companies, and clients in other industries in shareholder litigation, M&A litigation, complex commercial litigation, cryptocurrency litigation, qui tam actions, bankruptcy litigation, and government investigation and enforcement matters. He also counsels clients in the blockchain and cryptocurrency space on a variety of regulatory considerations, including compliance with securities laws. In addition, Mr. Cianci advises a range of clients on managing risk, navigating sensitive challenges, and anticipating litigation-related issues in the context of structuring acquisitions and other complex transactions.

Mr. Harttraft focuses his practice on corporate law, capital markets law, and financial regulations. He provides strategic advice on the regulation of blockchain technology and digital assets. As counsel to various blockchain and cryptocurrency clients, Mr. Harttraft provides critical legal advice on cryptocurrency, exchanges, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized finance (DeFi), securities and commodities laws compliance, gaming platforms, governance token structures, and venture financing. He also advises a wide range of clients interacting with or investing in blockchain technology, including start-ups and emerging companies, publicly traded companies, regulated financial services entities, fund managers, and money services businesses. Mr. Harttraft is a member of the Wall Street Blockchain Alliance, a nonprofit trade association created for financial market professionals and legal practitioners dedicated to remaining on the cutting edge of developments in blockchain technology and smart contracts.
Description
The adoption of cryptocurrencies and the emergence of blockchain platforms have made real estate tokenization a potential capital-raising option. With tokenization, ownership interests in real estate assets can be more immediately bought and sold. Tokenization requires a thorough understanding of the technology, the offering process, and the regulatory issues involved.
Investors typically invest in real estate through an LLC or limited partnership that owns an underlying property. With tokenization, LLC or LP interests are tokens that can be traded or used as collateral in smart contracts. The issuer must determine the number and type of tokens and select an exchange platform for trading.
Offering documents may include operating agreements, subscription agreements, and a private placement memorandum. Offerings must also comply with KYC requirements and appropriately protect user data.
Tokens should have built-in compliance features such as transfer restrictions and secondary trading. Issuers must also determine how distributable cash will be paid (perhaps using stablecoins or other digital currency).
Listen as our authoritative panel discusses these and other matters associated with commercial real estate tokenization.
Outline
- Emergence of blockchain technology and digital assets
- Real estate tokens contrasted with traditional LLC and partnership interests
- Issues in tokenization
- Compliance with securities laws and creation of a smart contract
- Determining the number and type of tokens and the exchange platform
- Offering process: confirmation of investor accreditation and listing of tokens
- Administration: distribution of profits or other payments to investors
Benefits
The panel will review these and other critical issues:
- What advantages do digital tokens have over traditional real estate investment vehicles?
- What are the securities law implications of tokenization? Is registration required?
- How should a token offering be documented?
- What are the transfer restrictions to build into a real estate token? What are the AML concerns?
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