Real Estate Tokenization Moves Beyond Hype as Infrastructure and Regulation Advance

Written by:

Steve Marcinuk

Date:

29 Dec 2025

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The real estate tokenization market is entering a new phase as regulatory clarity improves and infrastructure providers deliver more robust solutions. For years, tokenization generated industry buzz, but practical barriers limited adoption. Now, with maturing technology and a friendlier regulatory environment, tokenized real estate is gaining traction beyond early experiments.

Alan Konevsky, CEO of tZERO Group, a regulated infrastructure provider for tokenized securities, brings 20 years of experience in traditional finance and technology. Konevsky transitioned to blockchain-based finance because he saw its potential to reshape asset ownership and trading, much as the internet changed information sharing.

“I was looking at innovative technology that could make a permanent impact on how people live their lives,” Konevsky says. “With blockchain innovation and tokenization in particular, it really has that impact for four key reasons.”

Breaking Down Asset Silos

Konevsky points first to cross-asset interoperability. In traditional finance, real estate investments exist in isolation from other asset classes, leading to inefficiencies and limited liquidity. Tokenization addresses this by placing various asset types—equities, debt, derivatives, and real estate—on shared technology infrastructure.

“They no longer sit in silos that don’t talk to each other with all sorts of inefficiency and poor liquidity,” he says. “They share common technology platforms with distributed ledgers and programmable smart contract automation, becoming interoperable in ways that generate new products, new user experiences, and greater efficiency.”

Another advantage is improved cross-border capital flows. Blockchain and smart contracts can streamline value creation and trading across jurisdictions, even as legal and regulatory hurdles persist.

Efficiency and Transparency Gains

Tokenization brings more efficient, transparent processes to real estate investing. “We end up with value being represented on one database by programmable smart contracts that are self-regulating in many respects,” Konevsky explains. “Things happen faster, in real time, cheaper, more transparent with fewer intermediaries.”

For real estate, this means moving away from one-way, opaque financial relationships toward two-way, data-rich engagement. In sectors like hospitality, tokenization allows investors to become customers, creating new opportunities for interaction and loyalty through intelligent contract automation.

Addressing Common Misconceptions

Despite growing interest, Konevsky encounters frequent misunderstandings about tokenization. “Everyone is talking about the tokenization of real-world assets. The challenge isn’t with the idea—it’s with execution,” he says. “There are misconceptions that tokenization, in and of itself, provides liquidity, which isn’t necessarily true.”

Tokenization enables interoperability with other digital assets, opens new channels for global capital raising, and allows for customized investor experiences. “You tokenize an asset to become interoperable with other asset classes. It’s that interoperability with other digital assets, like crypto, that drives liquidity,” Konevsky notes.

Market Participation and Asset Types

Today, real estate tokenization includes a range of participants: single-asset owners, operators with multiple properties, and companies focused on residential portfolios or rehabilitation projects. Konevsky observes that the most successful tokenized offerings are simple, stable, and transparent.

“Keeping it simple is important—well-known assets with stable revenue that present a clear, easy-to-digest picture to retail or retail-plus type investors,” he says.

tZERO’s platform illustrates this approach. The St. Regis Aspen hotel, for example, has traded in tokenized form on their Alternative Trading System (ATS) for several years. While diversified pools of properties often attract investors, the performance of single high-quality assets demonstrates the model’s flexibility.

Liquidity: Realistic Expectations

Tokenized real estate assets on tZERO’s platform have achieved higher liquidity than traditional private real estate investments, but expectations should remain measured. “You certainly see a lot more liquidity than you would have with traditional real estate investments,” Konevsky says.

The proper comparison, he notes, is not with public REITs—which are larger, more liquid vehicles—but with private market alternatives that are typically illiquid, difficult to transfer, and expensive to trade.

“Your alternative for small pools or single-asset real estate is either private market existence or tokenized ATS trading,” Konevsky explains. “Private market existence is largely illiquid with high barriers to transferability and significant transaction costs, where you’re effectively locked up for a long period.”

Tokenized platforms offer more accessible liquidity, either through continuous automated trading or scheduled trading windows, both with substantially lower transaction costs than private market deals.

Regulatory Environment Shifts

A change in federal administration has led to a more supportive regulatory environment for digital asset innovation. “The impact and change in tone and psychology at the national level has been tremendous,” Konevsky says. “To go from an environment that was relatively skeptical to hostile to digital innovation to an environment that supports and encourages it has driven significant regulatory changes.”

This shift has separated the conversation about tokenization from broader cryptocurrency debates that previously created confusion and resistance. “The conversation has essentially decoupled tokenization from crypto,” he notes. “Tokenization of securities and real-world assets is a topic in and of itself.”

However, regulatory work remains unfinished. “There’s still a fair amount of rule changes and new legislation that needs to happen, including at the SEC level,” Konevsky acknowledges. Tokenization processes still require securitization, which, while streamlined, remains complex.

Platform Strategy and Future Development

tZERO is positioning itself as a protocol-agnostic, asset-agnostic infrastructure provider to connect traditional and digital finance. “We are a fungible infrastructure layer meant to be a bridge between traditional finance and digital finance, between issuers and investors, between a range of market participants,” Konevsky explains.

This includes partnerships such as the recent collaboration with Polymath and its Polymesh chain, with more partnerships expected. tZERO is also preparing for a potential public offering to demonstrate tokenization technology in public equity markets outside conventional clearing and exchange systems.

Path to Mainstream Adoption

Looking ahead, Konevsky outlines several steps needed for real estate tokenization to reach mainstream adoption. “You’re going to need some medium to large-scale projects and market participants to push out products that aren’t siloed to niche use cases, but are really market-facing,” he predicts.

Key developments will include large pools of assets being tokenized and traded across broader private markets with multiple liquidity providers, increased engagement from both retail and institutional investors driven by the benefits of cross-asset interoperability, and consumer-facing applications that integrate crypto, public equities, and tokenized real estate on unified platforms.

“The Super App conversation is going to be really important,” Konevsky adds, suggesting that multi-asset applications will play a crucial role in driving adoption by offering seamless user experiences.

Industry Implications

For real estate professionals, the maturing tokenization infrastructure offers both opportunity and a need to understand changing capital markets. The technology will not replace traditional investment structures, but it provides new options for raising capital, improving liquidity, and engaging investors.

The practical success of tokenized assets like the St. Regis Aspen demonstrates viability, while ongoing regulatory improvements point to faster adoption. As platforms like tZERO continue to build comprehensive solutions, real estate tokenization is moving closer to established practice.

The central task for industry participants is to understand tokenization’s real benefits—improved interoperability, greater liquidity than private alternatives, and new models for investor relationships—rather than viewing it as a universal solution to all real estate investment challenges.