What is real estate tokenization?
In short
How a property interest becomes a digitally recorded unit, and what that does and does not change.
Real estate tokenization is the practice of representing an economic interest in a property — or in the entity that owns the property — as a digital unit recorded on a ledger. The building does not change. The ownership structure does not become magic. What changes is how the interest is issued, recorded and administered.
In a conventional private real estate deal, an investor signs a subscription agreement and the sponsor maintains a register of interests in a spreadsheet or a transfer agent's system. In a tokenized structure, that register is a ledger entry. Issuance, allocation and record-keeping become programmatic rather than manual.
Crucially, tokenization does not by itself create liquidity, remove securities regulation, or reduce the risk of the underlying asset. An interest in a poorly selected building is a poorly selected investment whether it is recorded on paper or on a ledger. This is why RealTIRR treats selection, not tokenization, as the product.