Billionaire real estate mogul Barry Sternlicht said his firm, Starwood Capital Group, which manages over $125 billion in assets, is ready to begin tokenizing real-world assets but cannot move forward due to regulatory barriers in the United States.
“We want to do it right now, and we’re ready,” Sternlicht said Wednesday at the World Liberty Forum in Palm Beach. “It’s ridiculous that our customers can’t do that in token,” he said, referring to trading real-world assets — like real estate — using blockchain-based tokens.
Tokenization refers to converting 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 some other firms are already moving forward on a small scale to make the massive market, which still relies heavily on manual processes, more efficient.
One such company is Propy, which last year laid out its plans for a $100 million expansion to acquire mid-sized real estate companies across the United States with the goal of streamlining industry processes.
In fact, consulting giant Deloitte said in a report last year that $4 trillion of real estate will be tokenized by 2035, rising from less than US$0.3 trillion in 2024. If that comes to fruition, that’s a 27% CAGR for tokenized real estate.
“Tokenized real estate could not only pave the way for new markets and products, but also provide an opportunity for real estate companies to overcome challenges related to operational inefficiencies, high administrative costs imposed on investors, and limited retail participation,” Deloitte said.
‘It’s a great thing’
Sternlicht also seems to share the vision 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 is far behind where AI is today.
“This is even earlier in the physical world than AI is.” Sternlicht called tokenization “exciting as can be,” saying, “It’s a great thing for the world, the world just needs to catch up.”
