Real Estate Tokenization: How to Tokenize Commercial Properties
Salman Haider
TelGates Team
Real estate tokenization is unlocking liquidity for the world's largest asset class. Here's the complete playbook for tokenizing commercial properties in 2026.
The Legal Structure (SPV)
You cannot tokenize a building directly. Instead, you tokenize the ownership of a company that owns the building. 1. Create a Special Purpose Vehicle (SPV) — usually an LLC in Delaware or Wyoming 2. The SPV purchases the property 3. The operating agreement of the SPV explicitly states that ownership is represented by digital tokens on a blockchain 4. Tokens are issued to investors under exemptions like Reg D (506c) or Reg S
Smart Contract Architecture
We typically use the ERC-3643 (T-REX) standard for security tokens: - Identity Registry: Links wallet addresses to verified KYC/AML profiles - Compliance Engine: Enforces rules (e.g., maximum investors, lock-up periods, investor jurisdictions) - Token Contract: Represents the actual shares
Secondary Market Trading
The primary benefit of tokenization is liquidity. Once lock-up periods expire (typically 12 months for Reg D), tokens can be traded on Alternative Trading Systems (ATS) like tZERO or INX, or via peer-to-peer OTC desks.
Dividend Distribution
Rental income is distributed via smart contracts. USDC or USDT is automatically airdropped to token holders proportionally based on their holdings at a specific snapshot block.