- Bahnhofstrasse 51, a building on one of Zurich’s elite shopping street, is now one of the first blockchain technology-based investments.
- BrickMark has also stated that the Bahnhofstrasse building is the first to an entire global real estate blockchain-based portfolio.
- Smart contracts can be used to run code based on transactions that occur on the blockchain.
Bahnhofstrasse 51, a building on one of Zurich’s elite shopping street, is now one of the first blockchain technology-based investments. The building was purchased for a whopping CHF130 million ($134 million) by Switzerland-based investment firm, BrickMark, from RFR Holdings.
BrickMark has now issued digital tokens that are reinforced by a bond, which investors can buy and trade a section of the building’s rental income and growth in sale value.
This is one of the first attempts to give value to real estate using blockchain-based digital tokens. BrickMark CEO Stefan Rind even went on to say, “We are breaking new ground for the real estate industry.”
The building accommodates multiple offices and a Swatch retail outlet. BrickMark funded 20% of the purchase by offering a batch of their digital tokens to RFR Holding so that the seller manages to hold still a stake in the revenue brought in by the building and its tenants in the future.
BrickMark has also stated that the Bahnhofstrasse building is the first to an entire global real estate blockchain-based portfolio that is estimated to be worth about $CHF1 billion.
The acquisitions expected to made using a €50 million stockpile, and the rest of the funds will provide using a supply of their tokens.
The real estate investment firm’s digital token takes after the Ethereum blockchain ERC-20 protocol and uses smart contracts to validate the rights of the token holders.
The deals will also include defined claims from the token holders for repeating payments from the rental income and the growth in the value of the property.
Smart contracts can be used to run code based on transactions that occur on the blockchain and is this case. It can use to pay dividends and fees.
The tokens will be traded and transacted on the blockchain, most people in the sector believe that this will bring forth the future for real estate transactions as it proves to be more efficient and reliable than traditional paper-based currency forms.
Recent attempts at this kind of real estate tokenization involve that of WeCan, a Geneva-based company that bought value to two properties in Portugal worth €11 million using digital tokens. WeCan also reported being planning to expand its tokenized properties in other European countries too.