We’ve seen many blockchain-powered real estate products emerge recently, covering everything from stablecoins to property exchanges. But most of these platforms are focused on residential properties.
Today, Jointer.io has announced its primary securities market for commercial real estate, which is powered by both AI and blockchain. The big idea? Real estate owners can host their security tokens on Jointer’s ecosystem and use both its underwriting and marketing efforts to launch an ICO at zero cost.
And it seems Jointer has thought of every eventuality. Billing itself as “the missing step between security token solutions such has Harbor, Polymath, and Blocksquare, and secondary security markets such as TZero, GBX, and Bank of the Future,” Jointer acts as a clearinghouse intermediary between investors and property owners.
“Jointer’s platform hosts security tokens for lucrative properties that have been filtered based on Jointer’s intensive underwriting and regulatory system, so the buying and selling experience for the end user will be highly secure and simple,” Jointer CEO Jude Regev told me. “You can buy just with one click, as if it [was] a stock on the stock market.”
Both commercial and residential real estate require a significant number of steps before any deal can take place, so making investing this easy is a compelling proposition.
For example, issuers of security tokens are required to follow additional regulations that require conducting an independent valuation report, disclosing the property performance history, underwriting the future performance, running a title check to disclose debt and liens, and more.
Issuers must register the property as a security, use a Private Placement Memorandum (PPM) with a full due diligence report, and act in compliance with worldwide tax regulations.
Jointer helps protect both sides by ensuring transactions happen as planned, are compliant with all regulations, and have proper maintenance and transparency of materials and information. In addition to evaluation, Jointer users can buy and sell each property via security tokens on the platform.
“Unlike using traditional methods, the blockchain allows Jointer to offer a fraction of a building for a minimum budget as low as $1 per token, to support unlimited liquidity, to reduce the process time of 30-90 days, to facilitate instant action, and to remove experience and knowledge barriers,” Regev said. “And also, Jointer has built a unique legal structure that allows non-accredited investors to participate — which means for the first time commercial real estate will be democratized and available to everyone.”
From a purely practical standpoint, Jointer’s platform brings essential levels of security to the market. It allows its users, for example, to check if the owner is the true owner of the property and not just an anonymous person trying to offer tokens for properties they have no legal claim to. It also shows any debt or inflated prices associated with the property, and if the owner is leaving the investor with no principal to manage the property.
Jointer is based on SEC guidelines that allow non-accredited investors to participate in security token investment. The company also guarantees that investors will receive their share from the dividend and profits distribution, and in a timely manner. Since it is not yet legal for secondary securities markets to offer exchange trading, Jointer acts as a market maker, providing unlimited liquidity using a reserve structure to buy back security tokens.
So how does it make money? Jointer’s profits come from implementing a joint venture with investors. Since Jointer acts as a market maker, the platform has an incentive to offer only lucrative opportunities, and it has no interest in running an initial coin offering (ICO) to boost its coffers.
“Jointer does not plan to conduct an ICO or raise any funds using tokens,” Regev said. “The company is fully funded by investors and in the last three years has built secretly, under the radar, the world’s first primary marketplace based on blockchain and AI that will allow property owners the free service to issue security tokens legally.”
Speaking of AI, where does it play a part in the Jointer platform?
Jointer has developed a machine learning-based prediction algorithm that is capable of using just the property address to instantly analyze any commercial real estate and provide a forecast of the potential worth for the next 10 years. Alongside this, the company has also created a community-based sharing economy model with more than 500 professional underwriters that work from home part-time to help other users facilitate deals.