Billionaire real estate tycoon Barry Sternlicht said his company Starwood Capital Group, which manages more than $125 billion in assets, is ready to start tokenizing real-world assets but is unable to move forward due to U.S. regulatory hurdles.
“We want to do it now and we’re ready,” Sternlicht said Wednesday at the World Freedom Forum in Palm Beach. “What’s ridiculous is that our customers can’t do that with tokens,” he said, referring to using blockchain-based tokens to trade real-world assets — like real estate.
Tokenization is the conversion of ownership of physical assets such as real estate or art into blockchain-based tokens that can be traded. For companies like Starwood, it could offer a new way to raise capital or give investors access to previously illiquid markets.
Putting real estate on the blockchain is not a new idea, and several other companies are already advancing on a small scale to make a massive market that still relies heavily on manual processes more efficient.
One of them is Propy, which last year laid out a $100 million expansion plan to acquire mid-sized equity firms across the U.S. 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, compared with less than $0.3 trillion in 2024. If this becomes a reality, tokenized real estate will grow at a CAGR of 27%.
Deloitte said: “Tokenized real estate can not only pave the way for new markets and products, but also provide real estate organizations with the opportunity to overcome challenges such as operational inefficiencies, high investor management costs, and limited retail participation.”
“This is a great thing”
Sternlicht seems to share the vision that tokenization can revolutionize industries by celebrating the vast potential of the underlying technology.
“The technology is very advanced,” he said. “This is the future.
He even compared the current state of tokenization to artificial intelligence, saying it lags far behind today’s artificial intelligence.
“This is happening in the physical world earlier than artificial intelligence.” Calling tokenization “exciting,” Sternlicht said: “This is an amazing thing for the world, and the world has to catch up with it.”
