Billionaire real estate mogul Barry Sternlicht said his company, Starwood Capital Group, which manages more than $125 billion in assets, was ready to start tokenizing real-world assets but could not move forward due to regulatory barriers in the United States.
“We want to do it now and we are ready,” Sternlicht said Wednesday at the World Liberty Forum in Palm Beach. “It’s ridiculous that our customers can’t do this in tokenized form,” he said, referring to transactions in real-world assets, like real estate, using blockchain-based tokens.
Tokenization refers to converting ownership of physical assets, like real estate or art, into blockchain-based tokens that can be traded. For companies like Starwood, this could offer a new way to raise capital or give investors access to previously illiquid markets.
Placing real estate on the blockchain is not a new idea, and other companies are already moving forward on a small scale to make the massive marketplace, which still relies heavily on manual processes, more efficient.
One such company is Propy, which last year outlined plans for a $100 million expansion to acquire mid-sized title companies across the United States in an effort to streamline industry processes.
In fact, consulting giant Deloitte said in a report last year that $4 trillion worth of real estate will be tokenized by 2035, up from less than $0.3 trillion in 2024. If this becomes reality, it will represent a 27% CAGR for tokenized real estate.
“Tokenized real estate could not only pave the way for new markets and products, but also give real estate organizations the opportunity to overcome challenges related to operational inefficiency, high administrative costs charged to investors and limited retailer participation,” Deloitte said.
“It’s a fantastic thing.”
Sternlicht also seems to share the view that tokenization can revolutionize the industry by praising the enormous potential of the underlying technology.
“The technology is superior,” he said. “This is the future.
He went so far as to compare the current state of tokenization to artificial intelligence, saying it lags far behind where AI currently stands.
“It’s even earlier in the physical world than AI.” Sternlicht called tokenization “as exciting as it gets,” saying, “It’s a fantastic thing for the world, the world just needs to catch up.” »
