To Develop a Decentralized Protocol to Facilitate Secure Cross-Border Investments for Investors, Asset Owners and Property Developers in a Post-COVID-19 World
- RACE™ (Real Assets Community Economy), a digital real estate ecosystem to facilitate asset and real estate capital transactions for Owners and Developers.
- RACE™ plans to provide investors' access to institutional-grade assets while adhering to local and international regulations, and global security standards.
- RACE™ expects to facilitate timely rescue capital and private debt to Asset Owners, Developers, and Businesses.
London, U.K - November 5, 2020 - With The United States hitting an all-time high of 99,321 new coronavirus cases on Oct. 30, surpassing the previous high-water mark, and cases rising rapidly again in parts of Europe, it seems to be a foregone conclusion that technology will continue to play an accelerating and almost irreversible adoption in all aspects of domestic and cross-border transactions. Additionally, prolonged socioeconomic disturbances have undoubtedly affected some sectors within the global real estate market quite negatively. As an example, barring certain niche hotels, the overall hotel sector as an example may soon be faced with an unprecedented wave of distressed properties that were doing well prior to the outbreak. The retail real estate sector will only accelerate its slide with new asset closures. Thus, repurposing these above-affected assets to new uses will be the mantra of 2021 and 2022.
Rescue Capital and Private Debt on the RACE™ Ecosystem
The reduction in population mobility worldwide due to COVID-19 has led to fewer or no patrons in retail shops, thus leading to the unstable financial health of tenants of many commercial properties and, consequently, their landlords. Thus, many commercial property owners and hotels are gradually being incapacitated as their reserves run out, and are unable to pay their monthly mortgage payments to their lenders. These property owners thus need critical rescue capital to survive. These owners' immediate reaction is to mitigate losses and reduce risk exposure caused by "indirect impacts of slower economic growth and financial market volatility". Private debt allows distressed property owners to refinance their loans and to explore asset-backed property loans, which could be the solution to keeping their properties in this environment. Since 2008, private debt has always been a more attractive investment asset compared to public debt due to the former's higher annual returns. Now, the extended low-interest environment is expected to further open up investors' appetites and, consequently, turn them towards private debt. Investors' interests are expected to help supplement the demand for private debt.
The RACE™ Protocol
RACE™ plans to facilitate secure cross-border transactions on its platform to cushion the impending economic impacts by providing timely rescue capital and private debt to owners and developers of real estate and commercial assets. The platform aims to accomplish this by allowing qualified investors to buy into rescue capital private debt opportunities, thus supporting stressed commercial property owners and business owners in a timely fashion. Making private debt financing available on the platform to qualified users is expected to connect demand and supply directly and more efficiently across the globe, relieving global economic implications of the virus. To further relieve stressed property owners, specialized compliant instruments are expected to be made available on RACE™, with functionally akin to Optionally Convertible Debentures (OCD). The platform is expected to provide an avenue by which commercial property owners can have access to rescue capital and private debt. RACE™ is expected to smoothen capital flows between owners and general partners, and, concurrently, between investors and limited partners. RACE™ intends to use the latest technologies such as AI and blockchain to build software that enables cap table automation and other key features.
In the current buyer's market, demand is still apparent as investors' interest remains high for stressed assets. While the concerns of recovering from the economic downturn are valid, real estate assets remain attractive due to its stability and less risk in the long term, both of which are crucial factors in such an economy. The high demand for stressed real estate now also echoes the overarching trend from previous crises that increased allocations to real estate investment assets can be expected.
RACE™ is being designed to fulfill market needs as a secure and reliable decentralized platform and protocol. Pursuant to and in compliance with applicable regulations and jurisdictional restrictions, it aims to facilitate seamless long-distance investments and create more efficient transactions over time. These are accomplished through direct deal processes between stakeholders in a global community, effecting reduced layers and friction costs. Through the planned integration of novel technologies such as blockchain technology, combined with Web 3.0 and Machine Learning technologies, the platform's vision is to disintermediate the existing real assets and real estate finance ecosystem. Instead of having many layers of processes and friction, the platform plans to enable developers' listing projects for consideration by community-vetting and allows the global community access to institutional-grade investment projects, subject to proper regulatory compliance. The dependable and secure transactions that are soon to be enabled on the RACE™ platform are expected to support general partners and owners of commercial property amidst the pandemic period and beyond.
The RACE™ platform aims to be focused on the growth of the entire community, from investors and real estate developers to service providers such as accountants, brokers, and custodians. The ecosystem plans to provide ease of investments, deal transparency, reduction of layers and friction costs, and a sheer collaborative digital momentum of moving investments online.
Fintech, proptech and online wealth management have been growing and evolving at a rapid pace even before COVID-19, and now the virus has given additional impetus to accelerate digital transformation, even in the most conservative of industries.
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