Tokenization of Commercial Real Estate (2026 Guide)
Tokenization of commercial real estate sounds powerful, but when you sit down to invest, doubts show up: equity or debt? what are you buying? how do you get paid? what risks? Not knowing how it works slows decisions and can cost you money.
In this article I map it out: what gets tokenized, how the money flows, and the specifics of each model. It’s useful both for investors and for developers who want to understand this economic phenomenon better.
Tokenized Real Estate: Commercial vs Residential
Tokenization of commercial real estate is used when the property is a business (office, retail, industrial, multifamily). Value depends on NOI (Net Operating Income), cap rate, lease terms, and vacancy. That’s why commercial real estate tokenization seeks to optimize the capital structure and make operating cash flows more efficient.
In residential, tokenization often serves patrimonial or access purposes (fractionalizing a second home, financing a renovation, membership clubs). Returns depend more on the local market and the sale cycle than on professional lease contracts.
For the investor, the essentials are identifying what you buy (equity, debt, or rights to rents), how and when you get paid (dividends/coupons), and what real liquidity exists depending on whether it’s commercial or residential.
What can be tokenized in Commercial Real Estate?
In commercial real estate tokenization different exposures can be represented:
SPV Equity
Many real-estate tokenization platforms don’t tokenize the direct title, but the SPV’s equity that owns the asset. The tokens investors acquire represent equity stakes, not deeds.
This speeds onboarding and compliance (KYC/AML) and concentrates legal/technical obligations in the SPV, especially considering RWA tokenization risks. It also implies dividends according to the asset’s cash flow and corporate governance rules by jurisdiction (an SPV in the UK is not the same as in the US).
Real Estate ETF
A tokenized ETF brings together various commercial operations/assets into a single token. It works like a fund where the token represents shares of the vehicle and its value follows the portfolio’s NAV. It may also distribute returns if the underlying assets pay.
It resembles a traditional ETF/FOF, but on-chain. A clear example is the RETF, developed by RECC on the Solana blockchain.
Debt (senior / mezz)
In commercial real estate tokenization, debt can also be issued. In this case the SPV doesn’t tokenize its equity; it creates an on-chain pool and issues debt tokens. By buying them, investors finance the SPV so it can make loans to real-estate projects, with the asset as collateral.
The model mirrors the traditional capital stack, where the Senior investor is paid first (lower risk, lower rate) and the Mezz investor gets paid after (higher risk, higher rate). Thus, Tokenization of commercial real estate uses blockchain to program payments and governance, not to promise unrealistic returns.
Lease receivables
In this model future rents are tokenized; that is, the property owner assigns accounts receivable from rent to an SPV and the SPV issues tokens that grant rights to those cash flows. It resembles factoring/securitization of rents in traditional finance.
Blockchain adds payment traceability, programmable distribution, fractionalization, and faster settlement.
Project revenue-share
Here the token grants a percentage of the project’s revenue or profit (sales, NOI), without being debt or SPV equity. It’s analogous to a royalty/profit-sharing agreement where payment executes if the project generates cash.
How Does Commercial Real Estate Tokenization Work?
These are the main factors or stages behind a these kind of tokenized real estate investments.
Preparation (due diligence, valuation, docs)
First the SPV is set up and documentation is gathered: valuation, lease contracts, permits, business plan, and risks. Here you define whether the Tokenization of commercial real estate will be equity, debt, rents, or revenue-share.
Issuance (smart contract, whitelisting)
Then the smart contracts and tokens are created. The whitelist (KYC/AML) and the rules are configured: payments, governance, lockups, reporting. Everything is prepared so investors can participate.
Distribution (primary sale)
The primary sale opens to permitted profiles. The investor completes KYC (in some cases it’s not required), connects a wallet, accepts the transfer, and receives the corresponding token (equity, debt, etc.). From there the on-chain operations continue.
Post-trade (reporting, secondary market if applicable)
After issuance, periodic reports arrive (occupancy, NOI, construction progress) along with programmed payments. If there is a secondary market, the token may be listed with clear liquidity rules on AMMs like Raydium or Meteora.
Cost drivers: legal, audit, issuance, listings
Costs come from the legal structure, audit, technical issuance, and, if applicable, listing and market-making. In commercial real estate tokenization they vary by jurisdiction, complexity, and deal size.
Equity vs. Debt tokens in CRE (comparison table)
Before choosing, locate what you’re buying, how you get paid, and what priority you have. This table summarizes equity vs. debt in commercial real estate tokenization.
| Aspect | Equity (SPV) | Debt (Senior/Mezz) |
| What you buy | Stake in the SPV that owns the asset | Tokenized loan with payment priority |
| How you’re paid | Dividends and upside on sale/refi | Interest (coupon) and principal at maturity |
| Target return | Depends on NOI/cap rate and exit | Depends on stated rate, priority, and risk |
| Risk | Higher (last in the waterfall) | Lower in Senior, higher in Mezz (absorbs first losses after senior) |
| Liquidity | May have limited secondary, common lockups | Similar, sometimes exit windows and pool buybacks |
| Tenor | Medium/long (until exit) | Fixed; bridge is short-term, other tranches can be medium |
| Best for | Those seeking upside and accepting volatility/exit timing | Those prioritizing cash flow and priority (senior), or higher return with higher risk (mezz) |
Conclusion
Commercial real estate tokenization translates known structures (equity, debt, rents, revenue-share) into the on-chain environment with programmable rules and transparent reporting. Your decision hinges on what you buy, how you get paid, and what priority you hold.
If you prefer to diversify with minimal friction, an option like the RETF offers programmatic exposure to deal cash flows on the Solana Blockchain; if you prefer other type of RWA projects on Solana, assess each one with the same rigor you’d use off-chain.
