Real Estate And Syndication On The Blockchain With Laura Pamatian

 

We cannot talk about the future of real estate without addressing the growing presence of blockchain. Almost every industry is adapting to the digital world, and real estate is no exception. In this episode, Halle Eavelyn is joined by Laura Pamatian, the Founder of HeightZero—a real estate advisory firm that helps commercial folks get into AI and blockchain. Together, they discuss real estate and syndication on the blockchain. Laura simplifies the complex terms and definitions of the world of digital currency and how they relate to the changes and transformations in real estate. Why should you tokenize in this space? What existing regulations should you know? What is it like to be a woman in blockchain? Laura answers these questions and more. So tune in to this conversation!

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Real Estate And Syndication On The Blockchain With Laura Pamatian

Welcome to another episode of the show. I have with me Laura Pamatian. She is the Founder of Height Zero, which is a real estate advisory firm that helps commercial folks get into AI and blockchain. In other words, the future of a lot of what’s going on with real estate. Laura and I are a very unusual pair to be interviewing because we know each other in real life. We met at a crypto expo and have been seeing each other around.

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Welcome, Laura. Thank you for being a guest on the show.

It’s a pleasure. Thank you for having me. I love what you’re doing. I appreciate what you’re doing for many reasons, particularly for women. Thank you for that.

First of all, I noticed your shirt. It says, “Let’s tokenize it.” Let’s talk about what that means. Let’s get a working definition of what a token is.

In real estate, the token represents a digital interest in a real estate asset. It’s different from crypto. Crypto is you’re talking about crypto coins. The difference in tokenization with real estate is it’s backed by real estate. It’s backed by a hard asset, which is different from cryptocurrency.

That is a very important distinction. I know we’re probably going to talk a little bit about NFTs. I’m asking this question theoretically because I love it, but why would people want to be in the tokenizing of real estate space? What advantage is that for a commercial broker or somebody who’s a commercial developer?

For a real estate owner, there are many benefits to tokenization. There are a couple of different ways that we can tokenize real estate. One is for capital raising. If an owner is looking for capital and they need that for the renovation of a property, maybe an acquisition or a new build, they have an existing asset or an existing portfolio of assets. They have capital that they have access to. We can access that through tokenization. We can tokenize the equity stock in an existing asset as well, which helps with asset management. The benefits of raising capital through security tokens for the developer would be it gives them a competitive edge with investors because it’s providing liquidity on the secondary market.

People that are going to be reading this aren’t in real estate usually at all. When you say liquidity on the secondary market, can you give me a plain English version of that?

I’ll give you an example of a tokenized real estate asset. I’m a real estate developer. I own a hotel. It’s a $100 million hotel. Let’s say, I have $30 million in equity and I need $10 million for the renovation of that hotel. With that equity or that $10 million, we can create an offering for investors. We can open up that offering to retail investors, not just accredited investors that have millions of dollars to invest in the product. We can open this up to everyone. We do that through securitizing the offering under a Reg A offering, which means the SEC is involved. They’re making sure it’s compliant and it’s above board.

We can then issue shares in that hotel to investors. The investors can come to the table with a minimum of maybe $10,000 or maybe $1,000. Maybe it’s a minimum of $100,000, but it’s a lot less than what we are traditionally seeing in a commercial investment, which is millions of dollars. Traditionally, that owner or developer would go to investors and look to capitalize on that $10 million from maybe 1 or 2 investors. They can open that up to hundreds of investors if they would like and capitalize much easier because now you have a much broader investor pool.

It’s crowdfunding for a real estate asset. It’s legal crowdfunding because the SEC is involved. They’re going to approve that process. It sounds like you’ve done all this stuff a bunch of times already. We know that it is something that the SEC is saying is okay and is falling under existing regulations even though it is a digital asset. Is that right?

[bctt tweet=”When all of us women come together to support and educate each other, we are making it apparent that anyone can participate in this industry.” via=”no”]

That’s correct. If you think about the process of a capital raise, you have to go through all of these steps traditionally. Even with a security token offering, you’re still going through all of those same steps. The difference is that now the share can be fractionalized into a smaller denomination. If I have $10 million that I can capitalize, I have $10 million denominated tokens.

Why is that advantageous for an investor? If I come into the investment with $10,000, I have $10,000 denominated tokens. I have $10,000 tokens that I can go and sell on the secondary market if I would like to, and recapitalize myself. If I want to hold that for 1 year, 2 years, 3 years or whatever it may be and I want to exit my investment, I can do that at my leisure without having to go through this complicated process of exiting in a traditional commercial real estate investment.

That sounds very interesting. You said commercial, so this is something that will feel comfortable for you. I want to talk about syndication. Is that something that you are talking about doing or you’re thinking about doing? Let’s also get a definition. How would you define syndication?

We are an advisory firm. We are working with the GP that is assembling the syndication. They’re assembling all of the investors.

GP is a general partner, right?

That’s right. The general partner is going to sponsor the deal. They would then bring in other investors. We’re going to help that general partner or GP through the process if they’re interested in using tokenization in their project. If they want to raise $30 million for a purchase of a $100 million hotel, we can help them with that entire process from A to Z. We save them a lot of time. We’re not the ones that are offering the product, but we’re assisting in the process. A lot of people think, “Let’s tokenize real estate. We’ll call up the software provider and tokenize our real estate asset.”

You can’t do that.

It’s a security offering. There are upwards of twenty different service providers that are involved in the process. All of the steps from A to Z could take a couple of months to launch. It could take 2 months, 3 months or 4 months, depending. By the time you launch, you have another twelve months to raise capital. The entire process could be upwards of sixteen months depending on the product and the amount of the raise. You have issuers out there that are raising $100 million-plus, and that could take a while.

What if you wanted to do the syndication of a block of houses, for example, as opposed to a single unit like a hotel? I’m making this up, but let’s say I wanted to syndicate the street I live on. I was making a deal with everybody to buy their houses and that’s what I’m putting into my block. How does it work? Is there anything stopping me from doing that now? I feel like this is one of the future paths that we’re going to start seeing. My understanding is that a lot of this fractionalization of the tokens is being blocked by the SEC. They’re like, “It’s a security,” but here you are sailing on through. You’re already doing it as a security and saying, “We’re going to start there. That’s how we’re moving forward.” What would stop me from doing that kind of project?

 

With tokenization, we are talking about a couple of different things. You could talk about tokenization as a non-fungible token or NFT, which a lot of people are talking about and are familiar with.

Most of my audience is familiar with NFTs because I’ve done six shows about NFTs. In case this is your first time, an NFT or a non-fungible token means it is an asset that cannot be exchanged for a like asset. In other words, it’s a unique asset. A piece of real estate is a non-fungible token because you can’t exchange it for another piece of real estate. Does that sound like a pretty decent layperson definition?

Yeah. It’s very unique. It’s not interchangeable. We could exchange a hotel asset in its entirety via an NFT. What we’re talking about is we’re issuing security tokens based on the interest in the property from an investment standpoint. We’re fractionalizing the interest into a number of shares, and then having investors come in and participate in that hotel.

Typically, you can’t participate in a hotel asset for $1,000. You can’t do that, but with tokenization, you can do that. When you talk about tokenizing a neighborhood, you could potentially tokenize residential property in a portfolio of products. You have a portfolio of rental houses that you might be interested in creating a portfolio offering. It’s a fund type of offering. You could tokenize that. It starts to make sense. Depending on the projects, there are more crowdfunding projects from $5 million up. It starts to make sense for assets that are closer to $10 million if you’re looking for a $10 million raise based on those numbers.

It’s easy enough to raise the money for the $5 million that you don’t need to tokenize. Is that why?

Not necessarily. We’re seeing $100 million raises. They could start with a CF or crowdfunding offering upwards of $5 million or a maximum of $5 million raise. They could roll that into the future Reg A. In your Reg A, you can raise up to $75 million in a twelve-month period of time. We’re seeing a lot more use of the Reg A of the CF. Traditionally, it’s under Reg D because we’re always working with accredited investors. Now, crowdfunding and tokenization are making things a lot easier.

It’s leveling the playing field a little bit. I didn’t catch this one piece. You said at about $10 million, it starts to make sense. You then said that my reasoning behind that was not the right reason, so what is? Is it not cost-effective to do the $5 million?

Yeah.

That makes perfect sense. I want to talk about you because you impressed the heck out of me when I first saw you. For those of you that want a little bit of backstory on this, Laura was moderating a panel at a Propy event that I went to. You may have heard me talk about Propy in a previous episode. Propy is the company that has done the first NFTs as real estate on the residential side. They were having an event for realtors. I went not knowing what to expect. It was one of my first crypto events.

[bctt tweet=”You have to be immersed in the space to stay in touch and keep up with what’s happening.” via=”no”]

There was Laura knocking it out of the park on one of the panels. On every show I’ve been to, Laura has been moderating these panels. She asked these incredibly insightful questions. It’s powerful to get to see her. Sometimes, she’s on stage with other women. Other times, she’s the only chick on the stage. She always holds her own, which I love.

I saw this thing that broke my heart. It was a list of the top twenty people in crypto. When I say crypto, I’m using that term in a big loose way because it’s crypto, blockchain, and all the things. Of the twenty people, there wasn’t a single pair of boobs among them. It was all dudes. The lowest one on there was Brock Pierce who I’ve met a couple of times. He’s a sweet guy. He’s got $1 billion. The top billionaire was the guy who owns Binance at $65 billion. There’s some serious range in there.

The top twenty guys are guys. I looked at that and I thought, “This system is broken.” If that’s what’s going on that in the top twenty, there isn’t even one woman, that’s ridiculous. That’s not okay. I want to know what’s it like for you being on all these stages with these bros. What’s it like for you being a woman holding her own in the blockchain space?

Thank you so much for that. I appreciate that. As you said, we’re talking more cryptography than necessarily just cryptocurrency, but everything in the space in general. I think that in the crypto space, we all have equal opportunities. It’s just a matter of learning and pursuing that avenue. There are those that have a head start, and they’ve redirected their current knowledge and their current base. They’ve pivoted into the blockchain space with all of this knowledge already.

If you look at traditional finance or traditional technology, both of those arenas are male-dominated. It’s going to take education and all of us as women coming together, supporting each other, educating each other, and making it apparent that anyone can participate in this industry. It has leveled the field for a lot of different sectors across many industries with technology.

I’ve been in real estate and development for twenty years. That industry is primarily women-dominated. There are a lot of women in the real estate industry. If you look at the tech industry, it’s a very small percentage of women. It’s going to be interesting for us, in general, being on the real estate side and working on the tech side of real estate and seeing how it emerges. I’m very comfortable in the real estate space. I thought, “Take a seat at the table. If you have something important that you can say, you get to stay.”

I’ve done as much as I could to educate myself. The tech changes every day. I say this all the time. You have to be immersed in the space to stay in touch and keep up with what’s happening in the space. It’s dedication. There are plenty of women out there that are very dedicated. They’re brilliant and driven. Pivot into the space and redirect what it is that you’re doing because blockchain is going to affect almost probably everything.

I agree with that.

Learn the language. Understand what the terminology is. It’s like learning anything.

 

If you are reading this and it’s your first episode, please go back to some previous episodes. I have already recorded three crypto vocabulary episodes. It is like learning a new language. It’s important that you educate yourself on those words or feel familiar. Laura started talking about Reg A and CF, but you knew that those were the SEC regulations and crowdfunding because she explained that to you.

Once you have those words, then you can pick up on the acronyms the next time that they’re used as acronyms. It’s the same thing whether we’re saying that stuff or we’re talking about HODL-ing, how big is your bag or any of that. The first time I ever heard that expression, I was like, “Excuse me?” Eventually, I realized that they meant how much of that crypto are you holding. There are such funny words sometimes in crypto. Spellings are different and the words themselves are different.

Jules Taubman was on a previous episode. She runs the Women in Crypto group on Facebook. It’s up at over 10,000 of us. She talked about the phrase, “When Lambo?” It is when a crypto dude says, “When am I getting my Lamborghini? When is that crypto going to explode so much that I can buy a Lamborghini?” My favorite meme ever was a bunch of Lamborghinis in a row and a note on it that said, “Please make sure that when it goes to $1, you only buy one Lambo so there are enough Lambos for everybody.” I thought that was so funny.

When she was on there, she was talking about that phrase. She said, “When it’s women in crypto, it’s not, ‘When Lambo?’ It’s, ‘When college education? When family vacation?’” I thought that was such a brilliant insight. It’s probably still one of the most profound things I’ve heard in 30 episodes. There’s such a distinction between the way that women think about their money and the way that men think about it. Also, statistically, the way that women treat their money and the way that men treat their money.

The stuff that I love to quote is that when a woman makes $1, the 80% to 90% will go back into her family and the local community. When a man makes $1, it’s $0.30 to $0.40 of that. That is a significant difference. The women are not only making as much money, but they are turning around and reinvesting that into their family unit or their local community. When the Dalai Lama said, “The world will be saved by the Western woman,” he was talking about every one of us because we are the ones with the potential for that wealth and the potential to invest that. Do you have any thoughts on that topic?

I do very much agree with what you’re saying. It comes back to the same, which is educating and having women not feel intimidated getting into the space. It can be any new venture that you’re going into. Any new industry or any new pursuit of anything can be somewhat intimidating because you’re on the front end of the learning. Once you get into the learning and you start to understand, build your confidence, and grasp what it is that you need for yourself to get to the place where you want to go, that’s where it starts. You have to start.

When it comes to blockchain, no matter what industry you’re in, try to figure out how this tech is affecting your industry and if it’s something that you’re interested in. With cryptocurrency, we’re talking about finance, investment, and those kinds of things. Don’t take me for someone that’s going to give advice on finance or crypto for that matter at all. With that, you have to educate yourself. Traditionally, that has been men that have been doing that for themselves. Women have to start doing that more too. There has been a massive shift over the last decade. There are a lot of women that are very driven, prominent, and leaders in their space. They’re leading in there. If look at the top twenty crypto bros, that’s saying something for sure.

I have more stats for you. The 3% of projects that are funded in the crypto space are female, and that has doubled. There is more money out there for women. It’s just that they’re not asking for it. I find this interesting. I talked about this maybe once in a previous episode. It’s so valuable. I heard an anecdotal HR stat that I thought was fascinating. If a man thinks he’s at least 50% qualified for a job, he’s going to stick his resume in the pile. If a woman is putting her resume in, she has to think she’s 80% or 90% qualified or she’s not going to submit it.

There’s a certain perfectionism. There’s a certain good girl quality. There’s a certain wanting to be a team player and wanting to give the other kids a chance. It’s all the things that you probably heard in school when you raise your hand too many times or you’re too mouthy or too loud. When you are holding back because you were told from the time that you were a kid that was not okay for you to be you, you are very likely to not ask for the investment, job, money or education.

[bctt tweet=”If you love the industry, contribute and help it grow. ” via=”no”]

It’s risk-averse inherently.

It’s not just risk-averse, but we have been trained to not ask for the thing that we desire because it might offend somebody or it might not fit with somebody. When I went to college, I went to college on an acting scholarship. That was my job. I was an actress. That was all I cared about from the time I was ten years old. I then went off and worked in the theater. I got wild-haired with several other people and we started an interactive multimedia company back in the CD-ROM days. That was a long time ago.

We knew nothing, but neither did anybody else. In those days, there were no interactive training programs. There were no interactive movie programs. I know this because we invented the interactive film. I produced the first ever interactive movies. How did I know how to do that? I didn’t. I figured it out as I went along, and so did the director, writer, and creator of the technology. All of that stuff got invented as we went.

That’s why I left the theater. I was like, “This is so cool. Nobody has ever done it before.” That meant that in my mid-twenties, I got my education. The expression is you’re building the plane while flying it, and that was exactly what was going on. That’s what’s happening in crypto now. That is what I love about the blockchain, crypto, and Web 3.0 space. You can’t go to school for it.

I interviewed three women who said to me, “I won’t come on your show because I’m not an expert. I learned everything I need to know on YouTube.” I’m like, “That’s excellent. We’re going to have a great conversation.” When they came on, they were so excited as if they were doing it. They were like, “I could see the light bulb. I have expertise. I understand.”

What is expertise? When you suck in enough of those YouTube videos, use your discernment, and spit that back out in a cohesive and intelligent manner with your own words, congratulations. You’ve accomplished it. I feel like there are a lot of women who were saying that they don’t feel like they’re qualified yet. That’s a shame because there are so many women out there who are incredibly qualified. You said you got all this experience in real estate, but you didn’t pivot. You went one step to the left.

I looked at the industry and thought, “There are so many things that this technology could disrupt in real estate.” Especially in real estate, as antiquated and slow-moving as it is, there is a lot of opportunity for improvement in the space. I’ve always enjoyed new. I’ve been in new development. I’ve been on twelve projects and I enjoy the process of what is going to come from this idea. That’s very similar to what’s happening in the space. We’re all molding the space. There are a lot of opportunities and possibilities. Based on what we are doing, how we see it, and how we feel it is going to benefit, we are molding how it’s going to look in a few years. That’s important.

Getting women involved and having that perspective on any type of diversity in the space is important because that’s how we’re all going to succeed. When it applies and benefits everyone, we can all look at it and say, “This is going to benefit us. How? This will benefit us in this way and that will benefit me personally.” We’re integrated into this entire ecosystem. All boats rise with the tide. We have to make sure that that happens. We have to be supportive of everyone.

That’s what I love so much about the blockchain space. It is how incredibly collaborative it is. There are a lot of different people in the space that are doing similar things, but there is no competition in the space. There is so much opportunity. I say that all the time. There are a lot of companies that are tokenizing. The number is 70 companies out there that are tokenizing real estate. Is that a lot? No, it’s not. There’s $320 trillion of real estate out there. Go do it if you find interest in something. I don’t care if someone else is doing it. You have to contribute. If you love the industry, contribute and help it grow.

 

What is one more thing that you want all the women out there to know?

You can do it. I say this sometimes. You take a seat at the table. It’s a bunch of guys at the table. You sit down at the table. You bring what you bring to the table and figure it out. You’re going to figure out pretty quickly what else you need to learn. You can’t have an ego about it. You can’t be scared. You sit down and see what it is that you know compared to what they can possibly teach you. You learn and stay there. You continue to grow, get better, and become more valuable to the industry because you’re pushing yourself. I would say to go and do it and not be scared.

That’s so beautiful. The other women, when I’ve asked them at the end, I’ve heard them say, “Do it.” That piece that you said, “Stay,” is everything. Stay in the room through your fear, unknowingness and education. Every day that you don’t know something is a day that you’re learning it and you’re getting better at it. You’re becoming more of an expert.

Remember that nobody knows. We are all figuring it out as we go because it’s changing every day. There’s no way to say, “Now, I’ve learned everything there is to know about this topic.” Given the internet, I don’t think that’s ever going to be true again. There will always be new stuff on a topic unless it is 15th-century tutor history. That’s finite, but the stuff that’s happening is very different.

I agree. It’s changing all the time. Those people that are in the room with you who you are learning from, they learn from someone else. They’ve continued to try and make mistakes. They pick themselves up and move on. That’s it. You move on. Everyone is going to make a mistake. Everyone is going to have this sense of, “Am I saying the right thing? Am I doing the right thing? Am I in the right place?” You figure it out. As long as your heart’s in it, you can’t go wrong.

Thank you so much. I’ve so enjoyed this conversation and having you here. This is beautiful.

I appreciate you so much. Thank you for what you’re doing for the industry and for women. You’re amazing. Thank you for that.

Thank you. If you have enjoyed this episode of the show, please comment, like, share and tell all the women in your life, your girlfriends, daughters, mothers, grandmas, friends, wives or everybody. Tell all the women in the world so that we can make sure that the future of finance is female. I’ll see you again.

 

Important Links

• Height Zero
• Previous Episode – NFTs Now and As the Future
• Jules Taubman – Women in Crypto Global & Being a Single Mom with Jules Taubman

 

About Laura Pamatian

Laura Pamatian, a South Florida resident, has 20 years of experience in the domestic and international marketing and sales of luxury resort and vertical real estate development. Specializing in investment product, she has represented numerous 5-star, globally recognized brands, including; The Ritz Carlton, Mandarin Oriental, Auberge Resorts and Grand Hyatt.

A key board member of the growing FIBREE Miami Chapter (Foundation for International Blockchain and Real Estate Expertise – fibree.org), Laura is instrumental in branding FIBREE throughout the State of Florida. She is also a member of GBA (Government Blockchain Association – gbaglobal.org), and FBBA’s Real Estate Committee (Florida Blockchain Business Association – fbba.io). She organizes initiatives and events to create more public and private sector awareness and understanding of the transformative technology blockchain brings to the Real Estate Industry.