In $18 million deal, nearly one-fifth of St. Regis Aspen sells through digital tokens
A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.
Originally developed as the accounting method for the virtual currency Bitcoin, blockchains — which use what’s known as distributed ledger technology (DLT) — are appearing in a variety of commercial applications today. Currently, the technology is primarily used to verify transactions, within digital currencies though it is possible to digitize, code and insert practically any document into the blockchain. Doing so creates an indelible record that cannot be changed; furthermore, the record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority.
The ownership group behind the St. Regis Aspen announced Tuesday the selling off of 18.9 percent of the resort hotel through $18 million in digital tokens.
Buyers of the tokens, sold at $1 each through a real estate offering called Aspen Digital, had to be accredited investors willing to purchase at least 10,000 tokens.
New York-based asset manager Elevated Returns, which owns the St. Regis, will hold onto the remaining 81.1 percent of the 179-room luxury hotel. A spokesman for Elevated would not identify the new minority owners.
The sell-off of nearly one-fifth of the hotel comes after Elevated Returns President Stephane De Baets retreated in March on his mission to take nearly one-half of the hotel public on the New York Stock Exchange.
The hotel would have been sold as a single-asset real estate investment trust, with investors having to put down at least $2,000 — at $20 a share — to buy into the hotel. The IPO would have accounted for 49 percent of the hotel, which is located at the base of Aspen Mountain.
In the latest attempt to attract investors to the St. Regis Aspen, the digital currency, called Aspen Coins, could be purchased with U.S. dollars as well as Bitcoin and Ether.
Whether it was through an IPO or digitalized coins, Elevated had heralded either investment approach as revolutionary.
The IPO was touted as the first of its kind in the United States for a single-asset real estate investment trust, commonly called an REIT.
The approach through Aspen Digital Inc., noted Tuesday’s company announcement “is among the first of its kind to successfully tokenize a trophy real estate asset.”
De Baets was traveling Tuesday and could not be reached for comment, but he told The Aspen Times in September that “we believe many people secretly want to own a piece of the St. Regis Aspen hotel. Owning a digital token is the equivalent of owning a share, and is a digital security. We saw that doing an IPO was not scalable through the traditional route. Seeing where the blockchain market was heading, we saw the opportunity to be first-movers with our token offering for the St. Regis Aspen.”
The St. Regis offering was made available directly through the brokerage firm Templum Markets LLC.
In a prepared statement, Elevated Returns director Jason Kirschenbaum said, “The Aspen Digital closing not only represents a new coin on the market that is asset-backed, it also establishes a blueprint for future real estate tokenization. The future of real estate investing is one that provides global exposure, transparency, public access and liquidity, all of which are elements that can be delivered through blockchain technology.”
Represented by De Baets’ Bangkok-based OptAsia Capital Co. Ltd, 315 Dean Associates Inc. acquired the five-star St. Regis for $70 million in September 2010 during the recession. Since then, $50 million has been put into renovations. The hotel opened in 1992 as a Ritz-Carlton Hotel before being converted to the St. Regis in 1998.
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