The Co-founder of financial technology company Abstract Tokenization, Tegan Monique Gaan, sat down with CREtech to discuss commercial real estate and what they will bring to the traditional market most likely to be disrupted by tokenization.
Security tokens and the commercial real estate market seem to go together. After all, the real estate market has historically been one of the least liquid markets. However, although we’ve seen $30 million-dollar Manhattan properties tokenized and other luxury real estate also be represented on Ethereum, that doesn’t quite get to the heart of what tokenization can really bring to real estate.
CREtech, a company focused on bringing technology to real estate, recently caught up with the Co-founder of Abstract Tokenization, Tegan Monique Gaan, for an interview. She describes Abstract Tokenization as a company which will “help automate the legal, technical, operational and servicing functions of an SEC compliant security token offering (STO) to raise capital via digital securities.”
The Potential of Real Estate
The real estate market is truly massive, however so little of it changes hands. As Gaan points out:
“Only $1.4 trillion of $217 trillion in global developed real estate assets (and $280.6 trillion in total according to Savills) was exchanged in 2017.”
Abstract Tokenization is looking to tackle this problem by directly focusing on the liquidity question. Frankly, this is the single biggest argument tokenized securities have in their favor today: they simply make trading assets easier.
Abstract Tokenization has “recently raised $500k in seed funding from strategic owners, operators, developers and investors in commercial real estate.” However, the company is just getting started. As Gaan explains:
We plan to launch Abstract’s tokenization platform late January, with a demoable version available by mid December. The company is also in later stages of discussion with multiple broker dealers to form a strategic operating partnership as well as various investor distribution partnerships. We are looking forward to continuing to grow the team and expand the scope of the product.
The future for security tokens looks bright, but it all depends on projects like Abstract Tokenization to deliver the modern liquidity the massive real estate market desperately needs.
What do you think of Abstract Tokenization? Is their focus on commercial real estate correct? Let us know your thoughts in the comments.