A Tel-Aviv-based startup, Agora, has announced the launch of a new real estate investment platform with among the first ever digitized assets in the world—a new hotel by Radisson Park Inn, which will be located in Poznan, Poland. Leading real estate developer, MORE, currently owns the hotel.
Agora's platform allows commercial real estate owners to liquidate and sell a fraction of their equity to the public, while on the other hand allowing private investors to invest in yielding real estate via crowdfunding, with small amounts and in specific assets, all from the comfort of their home.
To accomplish this, Agora has created an advanced platform that offers complete integration to dedicated smart contracts which will represent the users' ownerships of their assets. With this integration of smart contracts, Agora has developed a digital share for each asset issues through its platform which can be used to raise capital through a new feature that serves as an alternative to the traditional way to gather debt base loans.The technology, which is powered by blockchain, allows the processes to be automated which will greatly reduce the costs.
The first opportunity is a brand-new, modern hotel located in Poznan, Poland. The asset is operated by the Radisson Park Inn brand and owned by MORE, a trusted and leading real estate company.
A number of backers fund Agora, like the founders of Datorama, a newly owned Salesforce, acquired for $859 million in 2018) as well as other giants in the local real estate sector.
"Asset owners can hardly leverage the true value of their property and the individual investor has a huge barrier of entry to face, one that usually only major institutional investors can overcome." says Bar Mor, the CEO.
"For instance, If I own an asset worth $10 million, this doesn’t mean I hold $10 million in my bank account free for use. The options standing before asset owners today are limited – they can either sell the entire asset or receive a debt-based loan from the bank by collateralizing the asset. A private company can perform an IPO and thus become liquid. Yet, in the case of individual assets this is not an option since the expenses are simply not worth it. We want to create an alternative solution for asset owners, something between an IPO and private investing, in which they could "issue" their asset to the public, and thus actually liquidating a fraction of it." Says Mor.
"We wish to completely change the way the simple investor approaches real estate today. Most people don't have access to low-barrier, quality investments. Our goal is to allow anyone, anywhere to enjoy the passive income and stability of a RE investment, with the simplicity and liquidity of a stock. This creates a win-win situation for both the asset owners and the investors." Mor adds.
Edited by V. Haviland