Fireside Chat with Stephane De Baets
De Baets is a leading pioneer in the blockchain and real estate realm. He promotes tokenization, democratization of hospitality real estate investing, and the digital revolution.
Stephane De Baets, Founder of Elevated Returns LLC, AspenCoin, SPV77. Stephane De Baets is a Belgian investment, real estate, and hospitality entrepreneur. He is founder and president of the Aspen-based, international asset management firm Elevated Returns, which controls the Aspen St. Regis Resort in Aspen, Colorado and other commercial properties in the United States, Europe, and Southeast Asia. De Baets is a pioneer in blockchain-based real estate investing. Through his firm Elevated Returns, he facilitated the first major commercial real estate transaction using blockchain technology to sell ownership stakes in the Aspen St. Regis Resort. He was also formerly part-owner of OptAsia Capital, a Bangkok-based investment firm founded in 2008, until he divested in 2018. The firm’s portfolio of Class A real estate investment assets, which include properties in the United States, Southeast Asia and Europe, are collectively valued at more than US$1 billion. The firm is a pioneer in digitizing traditional financial assets using blockchain-based technology. In 2018, Elevated Returns launched the first major digital tokenization of a commercial real estate asset with the St. Regis Aspen Resort. In February 2019, Elevated Returns announced plans to digitize its entire portfolio of real estate assets using the blockchain technology Tezos.
Key takeaways: De Baets wants a way to democratize hospitality investments and move away from the incestuous nature of this real estate investing. His approach began with a single asset REIT on NYSE, but it failed because traditional capital markets did not want exposure to such a small deal.
His idea for privatizing a 20% share of his hotel in Aspen, Colorado came about in 2018. Tokenized shares in St. Regis Resort brought to you by Aspen Coin. He created the first transaction, in the US, of tokenized ownership backed by a real world asset. The token rights convey true equity ownership of the hotel, rights included, with buying and selling market actions on a private digital asset market place. Being the first of its kind, it is now used as a case study.
The concept behind a token that represents equitable positions in the asset allow the owner of the real world asset to monetize a portion of their equity and this eliminated the binary nature of own or do not own with the addition of partial ownership. Consumers can adopt and expose their investments into what used to be a very private asset.
There are very difficult implementation practices because even though there are models for tokenizing a real world asset, no one has ever done it before. Owners do not want to exercise. Some want liquidity but do not understand the technology behind a security token.
AspenCoin was a success and the first of its kind; tokenized ownership (Check out the owner’s benefit program). Owners of the coin received cashback for different levels of ownership. You can buy at a flat rate for a future date. Liquidity and market cap of offering is held on tZero. tZero is a digital secondary marketplace for private digital assets.
The Blockchain Real Estate Summit held in Austin, Texas on September 10th.
Stephane believes in hospitality industry recovery from pandemic. There are challenges that come with security tokens, and the SEC will need to find ways to regulate these products. The 1933 Securities Act and the 1934 Exchange Act can be updated, he stated.
“The tokens harbor certain intrinsic value that cannot be replicated elsewhere”, with easy buy and sell actions. Use as a hedge against inflation because real estate prices will rise and exposure with security tokens can help the average consumer. De Baets is wildly optimistic on the potential of tokenized real estate because not only does it resemble an REIT with the benefits of it too, but integrates the limitless technological uses that come with blockchain.
He also expressed his concerns for the lack of progressive nature in the Blockchain industry for innovation here in the US. His new project from Elevated returns expects to release a real estate asset backed token by the end of September.
De Baets does not believe in regulation risk, but more of risk when regulation is not followed. He then stated that regulation is expensive, slow, and cumbersome. But there is possibility in the future that regulation will adapt and allow this technology to prosper. Funding and lending have the potential to be disintermediated he later stated, and the role of the banks will change. The digital world is coming, and it is making things cheaper, faster, and more accessible. He also does not believe if the digital revolution is coming, but when.
Key References: Blockchain Real Estate Summit, Stephen De Baets Podcast, Elevated Returns, Aspen Coin, tZero,
Stephen has vast knowledge of implementing security tokens to countries existing framework. He is bullish on the outcome of these tech advances and is still on the hunt for his next big break through.
This article is brought to you by the Team at SafeREIX. SafeREIX is a community defi token that is built around the integration of real estate to the blockchain. As real estate professionals, we aim to reach those engaged with real estate or blockchain and get both parties to talk about what the separate industries can do together. We had a great time writing this article for you to read. We are so excited to keep bringing you articles just like this one. We think that writing articles of this nature will expand our reach through the foundation of community enrichment. Hope you enjoyed this article, and we will keep you updated when the next piece of content is ready for your engagement. Join us on our social networks to stay connected!
Speaker Socials: Stephen De Baets
Author: Zach Cuellar (Website, Twitter)
Editor: Hunter Carter (Twitter)