Real Estate Tokenization: Recent Developments in New Jersey and Dubai

Land records are typically maintained by a combination of local, state and federal government agencies. Most deeds, mortgages, encroachments and other interests affecting the title to real property are recorded at the local level. Some counties still rely on fragmented and outdated systems that are paper-based or poorly digitized. Other jurisdictions offer online access to records to allow officials and the public to search property information, plats and transaction histories. Technology innovations, such as digitization, geographic information systems (GIS) and online search tools, are improving the accessibility, reliability and management of land records. Digitization of land records will be required to tokenize residential, commercial, or mixed-use properties and portfolios. Blockchain platforms and smart contracts will need to be developed and deployed to automate token issuance, transfers, distributions and governance.

Blockchain platforms are digital infrastructures that provide the tools and frameworks for building and managing applications that are decentralized, secure and transparent. They record data and transactions across a network of computers and employ protocols to validate transactions across the network. Once information is recorded, it cannot be altered retroactively. Most platforms support smart contracts or self-executing digital agreements that encode deal terms directly into computer code. These agreements automate processes and reduce the need for intermediaries, including attorneys, title companies, notaries and government officials. No single party controls the smart contract or its execution. Smart contracts should be secure, transparent and auditable to prevent manipulation and fraud. Once deployed, they can release funds, transfer digital assets or trigger notifications when specified conditions are met.

The tokenization of real estate involves a number of steps: (1) a property or portfolio is professionally appraised to determine its market value; (2) a special-purpose-legal entity (SPV) is formed to hold the title to the property or portfolio and comply with applicable laws; (3) tokens for the property are issued on a blockchain platform, typically representing fractional ownership or income rights; (4) smart contracts are encoded onto the blockchain platform to automate token issuance and transfers; (5) investor eligibility requirements are defined, and tokens are traded on compliant blockchain platforms to enable secondary-market trading; and (6) transparent record-keeping and governance is handled on the blockchain platform, with regular reporting to investors. Benefits of tokenization include cost efficiencies due to the elimination of intermediaries and trustworthiness due to a blockchain record that cannot be easily tampered with.

Teton County, Wyoming was the first county to implement a blockchain-based system for recording land titles and property records with Medici Land Governance, a subsidiary of Overstock.com (MLG) in 2019. The system is accessible through the clerk’s office and online GIS-ownership maps. It does not currently support property transfers or other transactions. Baltimore, Maryland’s blockchain land records pilot was launched in December 2023 and is focused on recording the city’s inventory of around 13,000 vacant properties. The pilot aims to streamline transactions, reduce title fraud and accelerate the rehabilitation of vacant homes. It was also developed in partnership with MLG, which is deploying similar systems globally, including in Tulum (Mexico), Liberia and Guyana.

RealIT acquires properties in the United States and globally and places each into an SPV. Ownership of the SPV is divided into digital tokens, each representing a fractional interest. Investors purchase these tokens to gain rights to a proportional share of rental income and equity in the property. These tokens are issued on the Ethereum-blockchain platform to ensure transparency, security and ease of transfer. All transactions are recorded on the blockchain to provide confidence to investors. Token holders have voting rights with respect to certain property-management decisions. RealIT partners with local management firms to attract tenants, collect rent and maintain the properties. Since ReaIT commenced its business activities in 2019, over 700 properties have been tokenized in the United States and three other countries.

Manifest uses blockchain technology to create new financial products (DeFi), especially in real estate. It has launched $USH, a tokenized-real-estate asset backed by investments in residential properties in the United States. This platform has expanded access to international investors, including in India. The growing list of companies offering platforms to enable fractional ownership of real estate in 2025 include Propy and AssetBlock in the United States, Polymath in Canada, SolidBlock in Israel, Brickblock in Germany and Antier Solutions in India.

Bergen County, New Jersey, recently announced the largest blockchain-based-land-record-management project in the United States. It entered into a five-year agreement with Balcony, a blockchain-technology firm, in early June. Over 370,000 deeds, representing around $240 billion in real-property value, will be digitized and migrated onto the Avalanche-blockchain platform supporting decentralized applications, smart contracts and a wide range of use cases, including the tokenization of real-world assets. The project will cover all of the municipalities in the county and serve nearly one million residents. The county anticipates that the project will dramatically reduce deed processing times and streamline real estate transactions. The new system will also be designed to improve municipal revenue collection and enhance public trust in official land records.

The Dubai Land Department (DLD) announced a multibillion-dollar-tokenization project to enable fractional ownership of real property in March of this year. This initiative was publicly launched on May 25 and is designed to transform property ownership by 2033, with tokenized assets projected to be valued at around $16 billion. DLD will collaborate with the Virtual Assets Regulatory Authority (VARA), the Dubai Future Foundation and the UAE Central Bank. DLD’s platform (Prypco Mint) will be integrated with its traditional land-registry systems. As a result of this project, fractional ownership of real estate will be available to UAE residents and investments will start at around $540. International investors will have access in the future.

As noted above, jurisdictions tend to focus first on digitizing existing land records rather than a complete overhaul of legacy systems with blockchain technology. Bureaucratic resistance to change and opposition from potentially displaced intermediaries slows adoption. Integrating blockchain with legacy systems requires the development of standardized protocols to address risks, such as fraud and data fragmentation. Any transition to blockchain platforms requires substantial investments in infrastructure, training and public support, especially when communities distrust automated systems or government officials. Moreover, blockchain technology has limitations related to data storage, data integrity (if the historical data migrated over is not accurate), coding complexity, privacy features and processing speeds, and public and private networks can be hacked when access controls fail. Another significant concern is the evolving and currently insufficient regulatory framework surrounding the use of blockchain technology and smart contracts.

Notwithstanding these obstacles, the adoption of blockchain platforms to tokenize real estate appears to be gaining traction. Regulatory-compliant solutions should be favored by large and small investors. Tokenization will expand beyond residential and commercial buildings to include data centers and other infrastructure. Citi Ventures has noted that tokenized real estate could serve as an alternative to REITs because it is more transparent, has lower fees and improved liquidity, with a broader reach to medium-income investors.