BrickMark signs purchase agreement for the largest ever real estate transaction paid in tokens of a total volume of over CHF 130 million
Jan 15, 2020
BrickMark AG (“BrickMark”), an innovative, high-growth real estate Investment company, today announced that it has signed a purchase agreement about the largest ever real estate purchase using tokens, buying a high profile prime commercial property on Zurich’s prestigious Bahnhofstrasse. The transaction volume amounts to over CHF 130 million. The transaction is based on a share deal and initially BrickMark acquired 80% of the shares of Bahnhofstrasse AG with a call option on the remaining 20% within 9 months. The seller of the property is the international real estate investor RFR Holding GmbH (“RFR”). RFR will remain a 20% shareholder in Bahnhoftstrasse AG and will lead the redevelopment process. A considerable part of the purchase price will be paid in BrickMark tokens.
The purchase agreement signed by the two parties opens up new dimensions in terms of the size and institutional character of token-financed real estate transactions. “We are breaking new ground for the real estate industry,” said Stephan Rind, CEO of BrickMark. “There has never been a token-based real estate transaction of this magnitude. We are implementing what was once no more than a concept in the real estate industry. This is why it was so important to us that the real estate and transaction partners were of the highest quality and reputation.”
Property in a prime location on Bahnhofstrasse — floor space expansion planned
The property acquired by BrickMark is located at Bahnhofstrasse 52 in central Zurich, in the heart of the central business district of one of Europe’s most important financial hubs and along one of the world’s exclusive and most prestigious luxury shopping boulevards. The property has a lettable space of more than 1,600 square meters. Most of this is currently used by office tenants, with only about 15 percent along the ground floor level being used by retailers. By intelligently redesigning individual areas of the property, retail space will be increased some six-fold — more than doubling the total annual rental income of the property — without reducing the existing office capacity. The official approval process will be initiated immediately and construction work is scheduled to be completed in approximately 24 months.
“Bahnhofstrasse is one of the top addresses in Europe”, says Rind. “Being able to acquire on favorable terms a top-quality property in this location that offers considerable potential for further value creation is a rare opportunity, especially in today’s market environment. We are delighted to have purchased this property from RFR Holding, a renowned institutional real estate investor, in an off-market deal. RFR’s interest in innovation in the real estate industry was certainly helpful.”
A successful financing round marks the start of further growth with highly profitable properties
With the acquisition of Bahnhofstrasse 52, BrickMark will finalize a financing round of over EUR 50 million with international investors. BrickMark sees the signing of the current real estate transaction as a first step kicking off the creation of a large scale international real estate portfolio. The company’s investment strategy targets high-quality commercial properties and value-add portfolios in top-tier European and North American cities. BrickMark plans to use its own tokens as the preferred financing instrument. The BrickMark tokens will be based on the Ethereum blockchain based on the ERC-20 protocol and make use of smart contracts to establish the detailed rights and entitlements of the token holders. These will also include clearly defined claims by the token holders for recurring payments from the rental income and participation in the value growth of the portfolio.
Tokenization enables higher standards of transparency and compliance
BrickMark is committed to the state-of-the-art transparency and reporting levels of the international real estate market. The company has already been accepted as a member of EPRA (the European Public Real Estate Association), which represents the leading real estate investment companies across the continent. BrickMark reports incude key performance metrics consistent with EPRA best practice guidelines , its accounting is in accordance with international accounting standards and has adopted a governance code adhering to global institutional investor standards.
The BrickMark team comprises well-known and successful real estate managers and investors
At BrickMark, a well known team of senior industry professionals with outstanding individual track records in the international real estate investment industry pool their expertise and their networks to promote the success of the company. The team includes Stephan Rind, Mark Abramson, Dr. Luciano Gabriel and John Nacos. Stephan Rind, CEO of BrickMark, is best known as the visionary founder of Colonia Real Estate AG in 2003, one of the first publicly traded real estate companies in Germany, building it into the the third-largest listed residential property company with a multibillion euro portfolio value before it was successfully acquired by TAG Immobilien AG. Mark Abramson was most recently a partner at Heitman LLC, a leading US-based investment firm, responsible for billions of dollars of investment in the global real estate sector on behalf of institutional clients. Dr. Luciano Gabriel, BrickMark’s Chairman of the Advisory Board, spent over 15 years in management positions in the Swiss financial industry, as CFO and then CEO of PSP Swiss Property AG, the second largest listed real estate company in Switzerland owning more than CHF 7billion of commercial property. After holding senior management positions in the mortgage and real estate divisions of Merrill Lynch, John Nacos, BrickMark advisor, was EMEA and global head of commercial real estate at Deutsche Bank and was until recently a member of the supervisory board of CA Immo AG, Austria, one of the largest commercial property owners in Europe.
“We will combine real estate assets with the benefits of blockchain.”
As an innovativor in real estat investment, BrickMark is combining the asset value and profitability benefits of this asset class (with total value greater than the combined value of global bond and stock markets) with the technological possibilities of smart contracts in blockchain and tokenization to create a more efficient, more functional and more fit-for-purpose form of capital designed specifically for the needs of today’s global institutional investor “BrickMark has set out to establish an additional form of capital in the institutional real estate market using blockchain technology,” said Stephan Rind, CEO of BrickMark. “ We are proud to have carried out the largest transaction to date in the real estate industry worldwide using tokens as a means of payment. In RFR, we have an international transaction partner with a double-digit billion-dollar portfolio of premium real estate, including many classics in the history of architecture. As we have a substantial pipeline of other high-quality properties to add to our real estate investment portfolio, we see this transaction very much as the first stage of our growth trajectory.”
Dr. Alexander Koblischek, Managing Director of RFR Management GmbH: “We gladly accepted the Brickmark tokens as part of the purchase price. We assume that digital financial instruments will also significantly gain in importance in the real estate sector in the future. The current transaction may have an icebreaker function for the sector in terms of its volume and institutional character”. Webcast / Conference Call on 15 January 2020 BrickMark AG invites media representatives and institutional investors to a conference call with accompanying presentation on the internet. The CEO of BrickMark, Stephan Rind, will explain details on the transaction, the perspectives of the company as well as real estate tokenization.
BrickMark, “The Blockchain Real Estate Company”, is an international real estate investor and real estate asset manager, and a pioneer in the tokenization of real estate. The company, in which high-caliber managers from the real estate industry pool their expertise and networks, has begun to build a real estate portfolio with a focus on high-quality, highly profitable residential and commercial properties in Europe and North America. The company is using a new form of digital security, the BrickMark token, as an integral part of the capital-raising process. The company thus combines the asset value and profitability benefits of real estate as an asset class with the technological possibilities of smart contracts in the blockchain. Like listed real estate companies, BrickMark embraces high transparency levels and compliance with international valuation standards. BrickMark is a member of EPRA and has offices in Zug, Zurich and Berlin. www.brickmark.net