Harbor partnered with Convexity Properties is introducing a first in its class tokenized real estate investment platform. Focused solely on University of South Carolina student residences dubbed ‘The Hub’, investors can now use blockchain tokens to claim partial ownership of the luxury student housing.
This is a revolutionary moment for blockchain applications in real estate and for distributed ledger technology as a whole. Harbor has executed the first tokenized REIT in the U.S. A REIT is a company that owns and operates valuable real estate to help a community grow. Investors can buy in and access dividend-based income and returns on the property.
Bringing REITs to the blockchain creates a tamper-proof ledgered environment to automate stake distribution with the use of smart contracts. Smart contracts are programs that run on the blockchain and are ‘event-based’, meaning, if ‘x’ happens when ‘y’ happens then ‘z’ will automatically be distributed to the intended party as the code dictates. Automated dividend distribution is a prime use case for smart contract technology.
Harbor CEO Josh Stein believes that using DLT (distributed ledger technology) will help to abbreviate a previously bulky and expensive process stating,
“Think of it like the transition from snail mail to email that occurred in offices in the 1990s. The content was the same but the digital format made it faster, cheaper, and easier to send,” he said.
Convexity Properties plans to raise $20 million with a good old-fashioned token sale that will allow investors to buy in at a $21,000 minimum. The tokens will eventually hit cryptocurrency exchanges where they can then be liquidated once the crowdsale has closed. The sale is limited to 995 tokens total that will each represent a fractional share of the student housing property.
This resident deal will act as a pilot and hopefully as an industry standard for future companies looking to integrate digital assets and blockchain technology for more secure and accessible investing. Stein believes that joining blockchain with real estate will improve the market’s liquidity, making it just as easy for investors to buy a part of a commercial building as it is to purchase stock.