Institutional Guide
Real Estate Tokenization: Structures, Yield and Risk
How tokenized property deals are structured, where the rental yield actually comes from, and the custody, valuation and liquidity risks behind them.
The structure
Almost every credible tokenized property deal uses the same skeleton: the building is transferred into a ring-fenced SPV, the SPV is audited and valued, and the units of that SPV are issued as transfer-restricted tokens. The token contract holds the register; the SPV holds the title. This is the same pattern described in our guide to tokenization of assets, applied to a single illiquid asset.
Where the yield comes from
Distributable yield is net rent after financing, management, vacancy and capex reserves. Deals that quote gross rent divided by purchase price are quoting a marketing number. Ask for the reserve policy and the historical vacancy rate before the coupon.
The three real risks
- · Valuation lag — appraisals update quarterly while tokens trade continuously.
- · Liquidity illusion — a whitelist plus a thin book is not an exit.
- · Operator risk — the manager, not the chain, collects the rent.
Frequently asked questions
› How does real estate tokenization work?
A property is transferred into a single-asset SPV. The SPV's shares or units are then issued as transfer-restricted tokens, so buying a token means buying a pro-rata claim on the entity that owns the building, not on the bricks directly.
› Where does the yield in a tokenized property come from?
Net rental income after financing costs, management fees, vacancy and maintenance reserves. Any advertised yield that ignores those line items is a gross figure, not a distributable one.
› Is a tokenized property actually liquid?
Only as liquid as the secondary venue and the transfer whitelist allow. Tokenization removes the notary bottleneck, but a thin order book still prices exits at a discount to appraised NAV.
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