Digital currencies have been in the news a lot lately. And, at least two commercial real estate projects are trying them out.
One developer that recently stuck its toe in the cyber currency waters is real estate investment firm KPG Funds, which announced that tenants can pay rent in digital currency at 446 Broadway L ‘Atelier. In addition, the commercial real estate firm said that it will begin accepting digital currency rent payments using Signature Bank and Bitstamp as its partners.
“We believe that cryptocurrency is here to stay. Tenants have started to ask for this payment solution, and we wanted to be able to satisfy their needs,” said KPG Funds CEO Gregory Kraut in a prepared statement.
L’Atelier at 446 Broadway is a newly renovated commercial office and boutique retail development in the heart of SOHO, according to the KPG website.
USDC, an Ethereum-based stablecoin, represents fiat, or government money, on the blockchain, according to KPG. It is redeemable on a one-to-one basis for US dollars, issued by regulated financial institutions and backed by fully reserved assets audited by Grant Thornton LLP. “We are now at a point with the technology where there is zero risk of price fluctuation in accepting USDC,” Kraut said in a prepared statement.
KPG Funds chose Signature Bank’s Signet network because it allows for 24/7/365 US dollar transactions, allowing the company to transfer digital currency or hold it instantly. “Bitstamp’s low transaction costs, high security and insurance made them a great fit as our exchange partner,” Kraut said.
Kraut believes that digital currency will become a standard payment option in the 21st-century office and real estate experience. “It’s not about the next year or next five years, we’re looking ahead to the next decade and beyond,” he said.
Across the country, another developer is also experimenting with cryptocurrency. In San Francisco, 20Mission, a 41-room co-living space owned by early Bitcoin millionaire Jered Kenna, is using NFTs—non-fungible tokens that use basic technology at the foundation of cryptocurrencies and provide ownership of digital assets—to let people bid on 75-year rights to lease a room for $1 a month, everything included.
“Originally, I wasn’t going to implement NFTs,” Kenna told GlobeSt.com in an earlier interview. “Then I realized it actually does make sense from an ease-of-use perspective. Of course, the timing is great. Everyone is talking about NFTs at the moment, but it is also indisputable the underlying asset has value. I really don’t want to see these go for something ridiculous like 100 years-worth of market rent. I’m trying to introduce a new way of viewing property ownership and bring liquidity to a traditionally illiquid market.”