LINUS Digital Finance relies on blockchain technology and for the first time enables its (semi-)professional investors to close their co-investment on the Ethereum blockchain via a tokenized trust relationship.
LINUS Digital Finance relies on blockchain technology and for the first time enables its (semi-)professional investors to close their co-investment on the Ethereum blockchain via a tokenized trust relationship. The project to be financed is the prestigious Access Tower in Frankfurt, a property owned by PREOS Global Office Real Estate & Technology AG. The aim of the project is to test the acceptance of blockchain technology in the target group and to find out what opportunities arise for LINUS and its co-investors from the digitalization of the financial market. The focus is primarily on the acceleration and simplification of processes as well as the tradability of investments on the digital LINUS co-investment platform.
Simple and secure subscription thanks to blockchain technology
Specifically, after digitally subscribing to the transaction, the investor receives the usual request to transfer the investment amount to a trust account. Once the money has been received, a token in the corresponding amount is transferred to the investor's digital wallet, which was created automatically in advance. Using blockchain technology, this transaction is then authenticated on the Ethereum blockchain with information on volumes and compensation claims. Legally, the obligations and entitlements are linked to the ownership of the token. In the further course, the regulatory framework is created so that such investments can be fully or partially resold within a regulated framework.
Cooperation with specialized and blockchain-affine partners
Legal support for the project is provided by Greenberg Traurig Germany, LLP as well as by the law firm Katzorke Rechtsanwaltsgesellschaft (prospektrecht.de), which specializes in blockchain and token projects. With micobo and upvest, two leading providers in their field were involved for technical support to ensure a seamless process and high quality.
Consistent further development for even more user-friendliness
"For the expansion of our digital platform, we are constantly looking for new solutions to provide our co-investors with an even more user-friendly application. In the case of the token instrument, it was above all the scalability and the great potential for increasing efficiency that convinced us directly. In addition, we want to use the token technology to enable the tradability of financing shares in the future," comments David Neuhoff, founder and CEO of LINUS Digital Finance AG, and continues: "We deliberately chose such an attractive asset as the Frankfurt Access Tower to process our first blockchain-supported transaction."
Attractive asset for co-investors: strong tenant mix, favourable location
LINUS is providing a mezzanine tranche of eight million euros to refinance the purchase, with up to six million euros to be passed on to co-investors via the token. The financing with a term of 24 months carries an interest rate of 8-9 % p.a..
The existing building at Lyoner Strasse 36 in Frankfurt-Niederrad with just under 21,000 square metres of rental space had been purchased in December 2019 by PREOS Real Estate AG, a subsidiary of publity AG.
The future of real estate financing lies in digital platforms
LINUS Digital Finance is currently focusing primarily on the further development of the digital platform www.linus-finance.com. The company intends to invest a double-digit million amount in the expansion of the platform in the coming years. Blockchain technologies will play a key role in this.
About LINUS Digital Finance:
LINUS Digital Finance finances real estate projects with debt and mezzanine capital via a debt fund that it manages and enables semi-professional and institutional investors to participate in these investments via a digital platform. The term of the loans is usually between 12 and 36 months. A subsidiary of LINUS Digital Finance AG is supervised by BaFin as a capital management company (KVG). Together with co-investors, the debt fund managed by the KVG has invested a total of around €550 million in capital in real estate projects since it was founded, financing a project volume of over €1.5 billion.