A New York City real estate development is raising capital using cryptocurrency
Non-US investors are being offered the opportunity to buy real estate-backed digital security tokens.
Property startup Slice is offering investors access to a share of $2 million in equity capital that will be used to construct a real estate development to be located in Chelsea, Manhattan, New York. However, there’s a big difference between this and other commercial capital raising strategies… investors are buying cryptocurrency.
That’s right! Rather than purchasing regular shares in the institutional grade real estate project, potential non-US investors are being offered the opportunity to buy real estate-backed digital security tokens.
These assets are secured through blockchain-based cryptocurrency. Unlike an initial coin offering (ICO), where the value of the coin is based entirely on speculative demand for the coin, Slice’s crypto assets are secured by real estate.
Slice on the sale of real estate assets
Slice claims that this method makes it simple and affordable to invest small amounts into real estate assets. The company will use blockchain-powered distributed ledger technology to settle cross-border transactions.
“Previously, high net worth cryptocurrency investors were forced to keep their assets in volatile, unpredictable forms such as bitcoin or Ether,” Slice chief executive Ari Shpanya said in a recent press release. “While this provided liquidity, the constant market fluctuations made it an unwise alternative to traditional investing.”
“As evident with Slice’s Chelsea, Manhattan real estate development, cryptocurrency now provides a way for both real estate investors and crypto investors to have a more stable, predictable high return for their investments. Plus, since cryptocurrency can be sold at any time, this type of investment provides the same high liquidity as one might find in a public market.”
This high liquidity means you can cash out assets whenever you want, deposited directly to your bank account.
Slice claims that the cryptocurrency on offer would be treated as any other securities for non-US investors and will fully comply to Securities and Exchange Commission (SEC) regulations and requirements. Each offering includes full Know Your Customer (KYC) and anti-money laundering (AML) conditions.
The development project, designed by DXA Architect Firm, is offering a total $80 million in equity capital. However, Slice has only secured $2 million to sell via its cryptocurrency method.
The building will feature the typical luxuries found in the neighborhood, including a luxurious lobby with 24/7 doorman and concierge service, a fitness center and swimming pool, exterior balconies and a roof deck.
Japan’s largest homebuilder, Daiwa House, is involved in the project and Slice also partnered with blockchain company Bancor and Stellar, as well as prominent commercial real estate funds in New York and California.
“Slice’s platform usually provides investors quarterly distributions on non-development projects and, on average, higher returns compared to traded Real Estate Investment Trusts (REITs),” Slice said in a statement.
As in all things real estate, location is key. The pro-cryptocurrency legal landscape in Vermont recently enabled city hall in South Burlington to record its first real estate deed exclusively on the Ethereum blockchain.
You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.