The BTG ReitBZ token scheduled to launch on the Tezos blockchain has already been used to acquire 323 distressed Brazilian real estate properties according to Valor. Of these 323 distressed assets, 181 have already been sold and with this, the ReitBZ token is expected to deliver its first dividend this month. The speed from acquisition to dividend delivery within this type of asset class makes these distressed assets particularly suitable for this type of tokenization.
BTG Pactual who is the fifth-biggest bank in Brazil and partners in the Tezos blockchain project alongside Dalma Capital, has combined with Enforce (a BTG Pactual company). They have formulated a blockchain investment strategy to acquire distressed real estate from other banks in Brazil to tokenize on the blockchain. These are often assets that have been repossessed due to bad credit. The ReitBZ’s relationship with Enforce can be seen here.
According to Enforce, five main Brazilian banks – Caixa, Bradesco, Santander, Itaú and Banco do Brasil – currently have the equivalent of R $ 18.7 billion (or around $3,459,951,523 today) of real estate in their portfolio. Across the 5 institutions, the number of units exceeds 102,000.
At the moment 5000 of these properties have been mapped by Enforce and these will be the first to be acquired. This could potentially mean that 5000 properties could be tokenized on the Tezos blockchain.
In addition to the purchase of units, Enforce also sees an opportunity to manage bank portfolios with these assets and the way to do this is to create dedicated credit rights funds (FIDC). The report goes on to state:
“Real estate operations are not exactly new for Enforce because they often appeared as assets within credit recovery processes. However, from now, there will be an area dedicated to that market. The company now has almost 400 units of its own in its portfolio”.
The budget in 2019 reserved for these purchases amounted to around $1 billion Brazilian Real or around ($185,013,900). It is not yet known what the budget in 2020 will be, however, due to the success of the project to date, it is anticipated that the company will scale up.
“This market is huge. We have been setting up our structure to deal with this segment since June last year ”,Alexandre Camara, a partner at BTG, told Valor
BTG Pactual have also recently acquired Brazilian start up Resale to help with the sale of these distressed assets. Resale founded in 2015 by entrepreneur Marcelo Prata who has worked in real estate for over a decade. From the acquisition 80% of the funds (which are unknown) were invested by BTG into the business to focus on the development of the technology. Prata explained more than 2000 real estate properties have been sold through the Resale channel. Prata went on to say:
“The banks’ portfolio today is almost like the pre-salt of the real estate market. There is much to be explored.”Marcelo Prata from Resale
It is understood that Resale will not be a dedicated source of property sales for these units and Enforce will continue to work with several institutions.
Enforce, chaired by Ricardo Cardoso, has already invested another R $ 22 million since it was acquired by BTG Pactual in 2016. Today, it manages a total of R $ 35 billion.
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