RedSwan CRE Partners for Technology to Power Its Tokenized Marketplace

RedSwan CRE, a marketplace for tokenized commercial real estate transactions, entered a partnership with Tassets (previously called RealToGroup) for the latter to provide the technology to power the marketplace.

“Through this new arrangement, RedSwan will utilize Tassets’ proprietary technology, enabling RedSwan to focus on its core competencies of structuring and to create compliant industry-standard for tokenized real estate around the globe,” RedSwan writes in a press release. Tassets, on the other hand, “tokenizes real-world assets by enabling simple, ultra-secure, low-cost, and barrier-free transactions.”

Tokenization is a method of using digital tools to enable fractional ownership of assets, including CRE, residential real estate, and REITs. In theory, the approach can expand an audience of potential ownership. Increased demand should enable an upward push on prices and valuation. A building owner could spin off part of a property to bring in additional capital while maintaining control. Or the owner or investment group could dispose of the entire property that way.

One rationale for outsourcing core technology to a third party is to avoid the cost of development and maintenance, treating it as a separate type of business. The approach has its benefits, including allowing the third party to amortize the technology costs across a body of clients. The tradeoff is losing complete control of the technology and having it available to competitors.

“RedSwan’s collaboration with Tassets will be a force multiplier for our clients, creating a best-in-class global platform for commercial real estate tokenization,” said Ed Nwokedi, RedSwan’s Founder and CEO, in the release.

In 2021, RedSwan claimed to be closing its first project, which was a multifamily property in Texas, as Fortune reported at the time. Nwokedi said then that he hoped to close 17 tokenized deals that year.

Tassets offers what it says is an end-to-end platform that provides asset tokenization services for real estate, but also other asset types like debt, equity, REITs, and funds. The company says that by storage of asset data on a blockchain creates price and value transparency for fairer prices and greater trust in secondary markets. Also, tokenization can improve liquidity. In the real estate realm, Tassets points to uses in multifamily portfolios, debt funds, and CRE marketplaces.

The services include determination of jurisdictional and legal considerations, setting up a deal room that is imposes regulatory and transactional controls, the tokenization process, and investor management.

“With a global real estate market of $128 trillion, tokenization of real estate is growing in demand with the potential to transform capital markets by using digitized security tokens backed by hard assets,” the release said.  “RedSwan is a tokenization platform that enhances real estate investment transactions through fractional ownership, private access, affordability, and 24/7 liquidity trading options. To-date, the company has tokenized more than $6 billion in real estate assets, operating with full FINRA licensing to provide compliant transactions.”