BMJ Score: 3.8
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CommentaryNYC is one of the most dynamic real estate markets in the world, and the overall property value in Manhattan alone is estimated to be over $1.4 trillion. Some of the current challenges around buying residential, commercial, or industrial property include difficulty sourcing good investments, time-consuming approval processes, and the sheer volume of capital required to invest. These challenges often serve as huge barriers to entry for individuals without large amounts of liquid capital or local market expertise to enter the real estate market. NYCREC wants to break down these barriers and open up the NYC real estate market to the world. We like that they are not only focused on a market that could benefit from blockchain, but they are also niche enough in their focus on NYC to differentiate from the competition. Furthermore, there is currently a lack of asset-backed cryptocurrencies on the market, which often leads to a highly volatile market where pump and dumps are the norm. NYCRC will serve as an asset-backed crypto that ties ownership to properties in NYC. Investors can own interest in buildings and can get paid via ETH airdrops based on the overall revenue obtained from cash flow activities like rent. This token is supported by a real asset, which can work to enhance liquidity. We are very impressed with the team behind this project; they have substantial experience in blockchain, real estate, and finance, and have an existing portfolio of billions in NYC real estate that consistently provides 16-25% returns in commercial real estate assets. The team has several members who have served as advisors to ICOs such as BankEx, Xtrade, and PetroChain, as well as advisors to hedge funds with over $4 billion in assets. The project also has some amazing partnerships with firms like Oracle and Harneys. One concern we have is around the roadmap; it does not show any specific dates, and we typically like to see more transparency from ICO teams. Another concern is that the platform is not yet functioning and does not indicate when exactly it will be available for use. While we like the team behind NYCREC, and we love the concept and business model, it is hard to feel confident about a project when there are no clear guidelines on when the platform will be released. We look forward to seeing more details on this in the near future.
- How to invest: How to invest: To participate, you must fill out the following Google registration sheet.
- Discount: Days 1–15 = 30% = ~$0.14; Days 16–30 = 25% = ~$0.15; Days 31–45 = 20% = ~$0.16
- Eligibility: The New York City Real Estate Coin pre-sale and public sale are only open to non-US citizens and non-US permanent residents. You do not have to be an institutional or private investor to participate; however, the pre-sale has minimum contribution requirements.
- Token price: $0.20 USD per token
- Jurisdiction: U.S.
- Payment accepted: ETH
- Problem addressed/solved: The NYC real estate market has historically been an illiquid playground for the ultra-rich, and it's ripe for disruption. Many people have funds for investment but don’t have access to NYC real estate investment options. NYCREC wants to destroy the high barriers to entry for this particular market.
- Target customers/customer/ segments/verticals: Target customers could be anyone in the wide world who wants to own valuable, tokenized real estate in the NYC metro area.
- Value creation: NYCREC uses blockchain technology to tokenize New York City real estate to offer token holders fractional interest in a portfolio of properties in NYC. This opens up unprecedented opportunities for worldwide accessibility and liquidity in one of the most competitive and desirable real estate markets.
- Competition: NYCREC has competition in other blockchain startups that want to tokenize real estate assets, but no other project is specifically focusing on NYC real estate like NYCREC. The project plans to beat traditional REIT options by offering lower fees and a 24/7 trading market.
- Market size/potential: The New York City real estate market is one of the most dynamic and secure real estate markets in the United States and the world. The strength of the market is illustrated by its growth in value of across various sectors, including residential and commercial properties, land, and rental rates. In 2017, the average apartment price was $2.2 million. In 2007, it was around $1.4 million, an increase of 57%. NYC real estate will almost always have high demand in a massive market, at least for the foreseeable future.
- Regulatory risks: In addition to the fact that the ICO/crypto space is subject to regulation, the real estate space will also have to deal with new reporting requirements such as Solvency II and AIFMD.
- Investor value: NYCREC token holders get some of the benefits that come with owning real estate, including an interest in a tangible asset and a share of the cash flow generating efforts via Ethereum airdrops. The tokens will also have better liquidity as opposed to traditional REITs.
- Disclosures: The glaring blemish on the transparency of NYCREC has to be its bare bones roadmap. It’s essentially a useless agenda for the investors who want to really know the future plans of the project. Having said that, the whitepaper is immaculate and packed with information, especially details on how the team plans to generate revenue and the overall direction of the real estate marketing in NYC.
- Token distribution: 60% ICO, 30% reserve, 5% treasury, and 5% team/founders.
- Use of proceeds: 90% acquisition of property and 10% administrative/operational/legal.
- Caps: Soft cap: $100 million USD; Hard cap: NYCREC “does not believe a hard cap is required”. For more information on this statement, visit page 28 of the white paper.
- Track record: A project of this size and scope (especially in real estate) requires a team with immense knowledge on the subject. Luckily for future token holders, the NYCREC team exceeds the expectations in terms of its experience, qualifications, and overall achievements through the careers of individual team members. The Chairman, Young K. Kwon, has over 21 years managing $15 billion in real estate in multiple countries across hundreds of transactions. Mr. Kwon has led multiple firms in their real estate investment efforts in equity, debt, and structured products. His experience in real estate rivals the best of this profession. The Chief Blockchain Officer, Niel Benedict, has developed smart-contract architectures for private placement exchanges, micro-financing, real estate, as well as complex and illiquid asset classes, natural resources, and futures markets.
- Integrity: It’s extremely difficult to find holes in the integrity of the NYCREC team. They’ve individually established themselves as top-tier professionals in the blockchain and finance industries. They have decades of experience and, judging by their past accomplishments, they’ll be persistent in taking this project to the top as well. The only hitch in their overall structure could be the lack of diversity within the team. Sometimes this can lead to an equal lack of diversity of ideas, but it seems the team has a concrete structure it plans to follow.
- Young Kwon, Chairman of the Board (LinkedIn)
- Neil Benedict, Chief Blockchain Officer (LinkedIn)
- Charles Wyman, Co-Founder (LinkedIn)
- Alain Oberrotman, Co-Founder (LinkedIn)
- MVP: The NYC coin might as well get rid of its roadmap because it supplies investors with so little information, making it relatively useless. There are no dates, bullet points, or concrete steps as to how the project will achieve its goals. Therefore, there’s no information on the existence of an MVP nor does the project provide any information as to when it might release a working product.
- Token use case: NYCREC is a Reg S security offering. The tokens issued represent an interest in an enterprise that will acquire real estate in the greater New York City area. NYCREC token holders are entitled to a percentage of the cash flows generated by the properties (if any). This will be distributed in the form of airdrops at the discretion of the NYCREC team.
- Value-added: The use of the NYCREC gives investors a few different benefits over traditional REIT opportunities. NYC REITs trade on New York Stock Exchange hours, which are 9:30 am to 4 pm EST. NYCREC tokens will trade 24/7. With NYCREC, you get an actively managed portfolio that is more flexible than a REIT. REITs come with expenses that cannot be avoided. The NYCREC team expects to lower expenses compared to a REIT, which means more pass-through value to the token holder. Lastly, NYCREC can give you fractional ownership in the real estate while most REITs require investments in whole properties or at least in massive proportions.
- Decentralization: NYC Real Estate Coin intends to create a blockchain platform that will allow multiple participants to put real-world collateralizable assets on a distributable ledger. It is likely that this will create a stronger and more stable medium of exchange.
- Token Supply: 1.75 billion tokens
- Technical difficulty/investment expertise needed: NYC Coin’s main goal is to give people of less financial means access to the NYC real estate industry. A full breakdown of the project can be found at the following link.
- Halo effect: NYC Coin actually has some solid partnerships in Oracle (Silver Partner), Harneys, and Sadis Goldberg. Establishing these partnerships will be key to the project’s growth, but it also helps increase its brand name. The team members also have a list of phenomenal companies that they’ve worked for in the past that include the likes of Goldman Sachs, Pimco, Merrill Lynch, Morgan Stanley, and McKensey. Putting these companies’ names on the front page of the site was an intelligent move by the team as it correlates their own company to some of the most prestigious financial institutions in the world.
- Buzz: In terms of online buzz/social media following, NYC Real Estate Coin might as well have created ghost accounts. The Facebook account has almost no traction while the Twitter account has a supposed 1,200 followers; yet all the posts receive less than 10 likes. The Telegram does a bit better with 16,028 members as of writing.