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$100M security token offering, a milestone in the future of real estate tokenization

New 24-story San Jose tower propelled by landmark $100 million fractional ownership offer

Alterra Worldwide has launched one of the world’s leading real estate tokenization projects for a new multi-family high-rise tower in downtown San Jose dubbed Tower 27. The token name, T27 Silicoin (T27S), was inspired by the location of the project in the heart of Silicon Valley. 100 million T27 Silicoin Security Tokens, each equal to $1, are available globally via their website.

Tower 27 is a 24-story, 374-unit, Class A multi-family residential project that includes 35,597 sq ft of leasable commercial space. The property is fully entitled. The construction of Tower 27, with a total development cost of $237 million, is scheduled to start in the first quarter of 2022 and expected to be completed within 32 months. On October 19, 2021, the San Jose City Council unanimously approved a waiver providing a 50% reduction in commercial fees for qualifying developments. The waiver provides an estimated total of $6.3 million discount in construction taxes and Affordable Housing Impact fees for the development.

The developer, Alterra Worldwide, has been involved with commercial real estate development projects worldwide for more than 20 years. The company emphasized the start of construction and ongoing development are not dependent on the course of the offering. The funds necessary to develop Tower 27 are being sourced simultaneously through traditional financing methods. Alterra Worldwide CEO Mike Sarimsakci clearly stated his stance on this issue by saying, “No matter the success of the T27 Silicoin offering the building of Tower 27 will move forward”.

The investment strategy is to share the profit with investors

Tower 27 is located in one of the most valuable real estate locations in the US. Directly in the center of Silicon Valley in downtown San Jose. Due in part to the region’s rapid growth, Alterra Worldwide’s investment strategy is to exit at the end of the stabilization period in 2026. As a result of this strategy, in addition to annual preferred dividend payments, a special profit-sharing system has been developed for token holders thereby increasing the estimated IRR up to 18.6% at the end of the 5-year investment period.

Reorientation of San Jose, the Capital of Silicon Valley

Competing tech firms make San Jose one of the most attractive real estate markets in the US. San Jose is Northern California’s largest city, home to nearly one million people, and is known as the Capital of Silicon Valley. It is in constant need of quality living spaces for thousands of high-paid employees joining a variety of industries every year. The city’s real estate is considered one of the best long-term investments in the country.
Tower 27 sits within blocks of Adobe Headquarters (which has begun construction on a new 4th office tower) and current construction of Google’s 80-acre mega campus deemed ‘Downtown West’. It is expected these two projects alone will bring approximately 30,000 new employees to downtown San Jose in the coming years.

Tokenization, the future of real estate investment

The global real estate market reached a market cap of 32.6 trillion U.S. dollars in 2020 and offers attractive opportunities to investors looking for a safe harbor with relatively high returns. No matter how attractive it may seem, traditional real estate investments have barriers in reaching large audiences due to their high illiquidity, difficulty marketing globally, high brokerage fees and large investment capital requirements. Visionary approaches, like T27 Silicoin Offering, aim to solve these barriers by tokenizing within blockchain technology a method to accelerate real estate investments considerably.

“We believe digitalization is the future of real estate with the convenience, speed, and global participation it provides,” said Ali Tüzmen, a board member of Alterra Worldwide and project manager for T27 Silicoin STO.

The most secure side of blockchain technology, security tokens

While cryptocurrencies are perhaps the best-known applications of blockchain technology at the moment, from a financial perspective, security tokens are much more attractive as they enable ownership (including fractional ownership) in real estate, private businesses and other alternative assets to be recorded in a digital form under the existing regulatory framework.

The asset-backed tokens of Tower 27, issued on the Ethereum blockchain’s ERC-20 token standard, are official representations of bearer stocks of Tower 27 Partners, LP, making this offering, one of the most secure investments based on blockchain technology. 

“Security tokens are an innovative way of both financing real estate projects and enabling more investors to participate. With investors able to purchase fractional ownership through a website and have their interest permanently and transparently recorded on a blockchain, even individual investors can now participate in large development projects.” said Jamie Finn, President of Securitize, Inc.

About Alterra Worldwide

Alterra Worldwide is a Dallas, Texas-based full-service, vertically integrated company with over 20 years of experience and expertise in ownership, and all aspects of development and construction management of commercial real estate in the USA and other parts of the world, including office, residential, retail and hospitality properties.

Photo by Gerardo Ramirez on Unsplash

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