Why Commercial Real Estate Tokenization Is Proving to Be a Gamechanger

Though real estate is one of the highly demanded assets in the market, it does suffer from accessibility and liquidity issues. Hence, commercial real estate tokenization solves the issue by dividing the asset into shared to be sold to interested investors. Each participant will have fragmented ownership of the asset. It is advantageous as it helps in speeding up the settlement of payments and leads to better governance of the asset based on a common protocol. It reduces the barriers to entry faced by investors and improves security and transparency. Generally, small investors are discouraged due to the unfavourable conditions like high upfront investments, management costs and low short-term liquidity. This leads to a cumbersome settlement process with a huge number of intermediaries such as agents and brokers indulging in redundant verification. Tokenization solves these issues by enabling parties to directly discuss the terms and conditions of the deal with each other through the blockchain platform. It eliminates the need for third parties and boosts efficiency by cutting down unnecessary costs. Hence tokenization can prove to be a useful alternative to Real Estate Investment Trusts and other crowd-funding methods.