If you’re a real estate mogul you might be getting some added liquidity soon.
Jointer, a blockchain startup, is working on tokenizing commercial real estate. We spoke with Jude Regev, CEO, on the latest along with mechanics on how tokenizing properties will work.
1. You have your own interesting real estate background. Share that.
Yes, I’m professional commercial real estate investor. Actually, Jointer started not as a startup at all. and at the beginning, Jointer was a tech solution that I developed for my own needs. The revolutionary technology can underwrite a property in a few seconds based on the address alone. When other people started to ask my help, I realized that I am the first in the world to solve this problem. It was only after many found the technology useful that I decided to share and help more investors.
2. What does Jointer do?
Unlike all other tokenization companies out there, Jointer brings different solutions to commercial real estate owners and investors, by increasing liquidity, improving returns, and minimizing risk using a new approach.
3. Is it really that simple?
With our new approach it’s very easy. We do all the heavy lifting, bear the cost and risk, as well as reduce the time-intensive work for investors and owners.
Our target investors are individuals and institutions that lend funds to real estate projects or peer-to-peer such as lending club , and we offer them new vehicle than the current lending industry with less risk and better returns, by creating a broad index of lucrative commercial real estate opportunities. These indexes minimize risk since the investor’s returns are not based on the performance of specific property. Further, the returns from a commercial real estate indices’ performance are typically much higher than any traditional fixed interest rate returns.
And for owners that looking to unlock their equity or sell their property, we are offering a solution to tokenize their property for free. We completely bear the responsibility of regulation, we provide liquidity, cover 100% of the marketing and tokenization cost. And if the owners will stay as principal to manage the property in our behalf, we’ll share with them our profits and increase their return on investment exponentially.
4. How can investors own a piece of the Empire State Building or Prudential Center?
With Jointer, you don’t need to. Our new approach allows you to lend money to purchase the Empire State Building but your returns will be tied to the performance of an index of all similar properties in NYC. Your tokens will be backed by cross-collateral from all the Jointer’s properties around the world. That means that even if the Empire State Building will be vacant or under-perform your returns are secure and unaffected.
Let’s take the Empire State Building as an example.
Assuming that the owners wants to sell some of their equity in the building to unlock $1 billion cash.
Jointer puts in an agreement to purchase that equity for $1 billion, and at the same time Jointer issue to the public JNTR tokens to borrow that money.
After the $1 billion is raised, the property moves to a land trust. And any income stream from that property will be placed in a reserve that is managed by a smart contract. That reserve contains all the income streams from all the properties in the world that Jointer helping to tokenize. The reserve first pays the interest to the investors that lend money to properties, then it splits the profit with the owners and Jointer.
This means if the building were to under perform returns are protected by other properties still producing returns across the index.
5. What do token holders actually own?
JNTR token is like a digital note, based on index performance but backed by cross-collateral. Investors have the right to sell those tokens without a lock time, or simply redeem them from the reserve.
Token holders purchase rights to the profits of the Jointer index.
6. Why is tokenization the best approach?
Owner’s want to unlock the equity in their properties and are increasingly looking towards blockchain to sell fractions to investors. We believe so deeply in blockchain securities that we actually provide tokenization for free to owners. Blockchain and tokenized securities will increase access to the commercial real estate asset class once we solve key issues such as fraud, regulation, risk, and liquidity.
7. Why do you provide your service at no cost?
Simple, we receive profits by splitting returns with those that buy Jointer tokens. We envision a world where all securities are tokenized and everyone has access no matter their background or budget.