Bitcoin Breaking Down Real Estate Transaction Barriers As Medium Of Exchange
One of the arguments by bitcoin nay-sayers is its ephemeral nature – it’s a digital product that’s essentially backed by nothing. If a deal goes bad, there’s no big government daddy to turn to for relief.
But an increasing number of real estate firms are recognizing the value of bitcoin, offering to exchange their tangible property assets for digital currency. There’s no shortage of companies willing to assist. Blockchain companies like Propy (which just partnered with the city of South Burlington, Vermont to record real estate transfers on the blockchain), ShelterZoom and others are offering ways to negotiate and purchase those properties with cryptocurrency, while still other entities help track titles and smooth the transactions.
There are also those in real estate who are going the direct sales route. One such player is Soly Halabi, senior managing director of holding company Empire Capital in New York, which operates the real estate brokerage Venture Capital Properties.
He’s currently shopping a penthouse at 146 West 57th Street in New York City. The two-floor property, once owned by a Sony executive, is on the 77th and 78th floor of the building, overlooking Manhattan’s famed Central Park and offering expansive views of the rest of the city.
The 4,000-square-foot penthouse boasts high-end finishes, “tons of marble,” an Italian kitchen design and waterworks. The deal also includes a studio apartment on a lower floor of the building that can be used for an office or “a closet,” Halabi says.
The asking price? It’s listed at $19.5 million USD, or roughly 1,685 bitcoins, based on Tuesday’s market prices. The price you’ll pay in bitcoin will be determined on the closing date for the property. Halabi notes that a nearby penthouse apartment was sold for $100 million, making this one a relative steal.
Why bitcoin? “We believe in bitcoin,” said Halabi, whose Empire Capital control $500 million in assets. “We believe in the long-term value of bitcoin.” It’s also an effort to “think outside the box” by the firm. “A lot of friends are investing in cryptocurrencies,” says Halabi. “That’s how we got the idea.”
Halabi is not sure if the company will hold the entire purchase price in bitcoin, or convert a portion to fiat currency. But he says he will “hold a significant amount” in digital currency.
The deal will be handled with an escrow account at an exchange, and Halabi is getting advice on the intricacies of such a large transaction from knowledgeable friends already in the cryptocurrency business, including billionaire Mike Novogratz.
Will Halabi’s firm soon have other properties for sale via bitcoin? Perhaps. “But first I will see how this will go through before I exercise my other properties,” he said.
Halabi is not alone. Florida, with its tradition of large numbers of foreign investors, is also a prime territory for real estate bitcoin sales. Reports indicate as many as 75 properties are for sale using bitcoin in the Sunshine State, and one true believer, a Miami condo seller, is only accepting Bitcoin offers.
In the case of foreign buyers, bitcoin transactions is a way to circumvent the controls imposed by national governments that limit the amount of fiat currency that can be transferred out of their country. Bitcoin has no such restrictions, although China and potentially South Korea are trying hard to pump the brakes on cryptocurrencies. But, for now, it’s full speed ahead for potential real estate buyers who wish to close their transactions using bitcoin and other digital currencies.