In brief

  • Red Swan partnered with Polymath to create $2.2 billion worth of real-estate security tokens.
  • $780 million worth of these tokens is being offered to accredited investors.
  • The firm plans to tokenize and sell a further $4 billion in security tokens.

Red Swan, an off-market real estate investment platform has just tokenized $2.2 billion worth of prime real estate assets in the U.S. and Canada.

Through its partnership with Polymath, a firm that offers security token creation services, Red Swan CEO Ed Nwokedi says the New York City-based firm was able to tokenize a total of 16 Grade A commercial properties.

These properties are spread throughout several US states, including Texas, New York, and California; in addition to Ontario, Canada. Shares in these properties will be offered to investors as part of an initial $780 million pre-sale and are currently issued as ST-20 tokens on the Ethereum blockchain. At some point, Red Swan hopes to make the switch to an enterprise blockchain platform, to benefit from increased speed and security.

For its role in the sale, Red Swan takes a percentage of any equity that is issued. On the other hand, investors will receive ST-20 tokens (a type of digital security) that represent their shared ownership of the underlying property. These tokens are backed by a $1 billion insurance plan provided by Prime Trust—the cryptocurrency custodian tasked with securing the assets.

Although Red Swan's $780 million pre-sale is already the world's largest tokenized real estate sale, the firm has plans to tokenize a further $4 billion in assets as part of its longer-term pipeline. These tokens will be offered to the more than 30,000 accredited investors in the Red Swan network, each of whom has between $500,000 and $10 million in capital, but can't afford to outright purchase their own piece of quality real estate.

"Red Swan through tokenization makes it possible to invest in commercial real estate projects that are out of reach for private investors. This allows building owners to sell fractional ownership of their properties," said Red Swan on its website.