THesis Miami Raises $33M From Retail Investors With Plan to Tokenize
Investors will be able to trade crypto-backed shares of the property, pending SEC approval
By Chava Gourarie December 6, 2021 2:00 pm
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Nolan Reynolds International (NRI) has recapitalized THesis Miami, a mixed-use property in Coral Gables, Fla., that opened last fall, with $32.7 million from retail investors, in a bid to become the first property in Miami to be tokenized.
Pending approval, retail investors will be able to trade shares in the property, backed by a cryptocurrency issued by NRI after a six-month lockup period.
The equity, raised through the CrowdStreet platform, is part of a broader recapitalization for the property, which includes a total of $150 million in debt from Starwood Property Trust and around $95 million in equity.
THesis, located at 1340 S Dixie Hwy, includes residential, hotel and retail components across its 777,000 square feet. The Residences at THesis, the 204-unit residential portion, is 99 percent leased, while the 295-key THesis Miami Hotel and retail portions are on the path to stabilization, according to the CrowdStreet offering.
NRI plans to tokenize the property, allowing retail investors to trade shares backed by digital coins throughout the investment’s lifetime, thus introducing liquidity into real estate, a traditionally illiquid vehicle. If everything goes according to plan, NRI will register its operating partnership as a real estate investment trust, and, after a six-month lockup, existing investors can exchange their traditional shares for digital shares — represented by a digital coin — in the real estate investment trust.
Approximately 700 investors participated in the offering, which started at a minimum of $25,000, offering a greater shot at liquidity should the secondary market become possible. For those who choose the traditional setup, the investment period is expected to be five years.
While NRI has structured the investment to allow for tokenization through the REIT, it has yet to be approved by the Securities and Exchange Commission
Starwood Property Trust provided the $150 million in debt, while NRI contributed $17 million in equity. The remaining equity in the capital stack will be raised from private placement, according to the offering.
NRI did not respond to a request for comment in time for publication.
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
