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THE ASPENCOIN - A CASE STUDY

■ Maximize Revenue  

■ Increase Occupancy During Off Peak Seasons 

■ Selective Renovations To The Hotel 

■ Increase Margins On Food And Beverage Sales 

■ Improve Marketing And Management Of The Resort 

■ Increase Brand Recognition 

■ Build Up ADR (Average Daily Rate) 

CONCLUSION

SolidBlock technology enabled the first successful commercial real estate issuance  on the blockchain. This represented a combination of technical innovation along with an intensive campaign which raised $18 million for St. Regis Aspen Ski Resort

SolidBlock's knowledge, strategic planning, technical expertise, and service oriented focus led to the rapid development of a securitized smart contract and management platform 

The SolidBlock platform enables the creation of fractional ownership in a transparent environment, facilitating real estate trading in the form of tokens on the blockchain. SolidBlock has a clear understanding of blockchain, real estate and the securitization industry and is result-oriented.

Beyond the initial security token offering (STO) phase, SolidBlock’s marketplace, along with its partnerships with leading exchanges around the world, provides multiple paths to liquidity through secondary trading, ensuring ongoing flexibility and growth for both investors and asset owners.

This capability was exemplified when a token issued by SolidBlock became the first property-backed digital security that is trading on an industry-leading alternative trading system.

SolidBlock is committed to both immediate and long term results, working with a global network of top-notch partners to ensure successful offerings and growing the market for secondary trading of private assets.

In mid-2018, Elevated Returns (ER), a New York-based asset management company servicing the hospitality, real estate and consumer brand industries, approached SolidBlock to tokenize the equity of the coveted St. Regis Aspen Colorado resort through a security token issuance on SolidBlock’s blockchain technology.

One of ER’s key focuses is the recapitalization of high-end properties around the world. To do so for St. Regis Aspen, the objective was to raise capital to:

As traditional efforts of raising capital did not yield the required funding, alternative solutions were explored.

FINDINGS


■ Capital required: $18 million 

■ Equity value: 19.14%

■ ER's multi-prong approach was to secure funding and included digitizing the offering to qualified investors. Thereupon, they engaged SolidBlock to tokenize the equity through a security token issuance on the blockchain. 

■ For the first time in US history, SolidBlock produced a blueprint for future real estate tokenization that was effectively mainstreamed, provided global exposure, public access, liquidity, and transparency. Yet, most importantly, it was fully regulated and compliant, in accordance with SEC regulation. 

■ The tokenization and token distribution were completed by Q4 2018.  

■ In Q3 2020, AspenCoin (now known as Aspen) began secondary trading through the tZero alternative trading system (ATS). Secondary trading opens the door to even greater liquidity and flexibility for investors 

TRADITIONAL OFFERINGS vs. TOKENIZED OFFERINGS 

■ Assets are paper certificates

■ Higher admin costs involved

■ High liquidity risk

■ Market slow down/crash - difficult for investors to exit (5-10 yr lockup)

■ More challenging to manage transaction

■ After NOI - expenses = profits, pecking order for dividends

■ High liquidity cost - should investors choose to exit, penalties and taxes, additional broker and attorney fees will be incurred

Traditional 

■ Securitized tokens replace paper certificates 

■ One Master document 

■ Low liquidity risk 

■ Market slow down/crash - investor has an exit strategy 

■ Easier asset acquisition (financing model benefits both issuer and investor)

■ Asset is liquid 

■ Easily tradable 

Digital Secured Asset 

Phase 1: 
Aspen Strategic Planning

Phase 2: 
Aspen Offering Documents

Phase 3: 

Aspen Smart Security Development, Launch and Management Tokenization

Phase 4: 
Smart Contracts Audited By 

 

■ Overview of the business, risks, financial reports

■ Offering details

■ Regulatory planning

■ Corporate structure 

■ Incorporation location 

■ Target jurisdictions

■ Tokenization structure

■ Dividend distributions

 

 

■ Whitepaper

■ Offering Memorandum

■ Private Placement

■ Sales Agreements

■ Working with Aspen’s premier legal team:  Clifford Chance


 

■ Set up infrastructure for Issuer and Investor (incl. backend)

■ Price per Aspen Digital Token:  $1.00 per share

■ Hard Cap set at: $18 million 

■ Tradable Currencies:  USD, EUR, BTC or ETH

■ Secondary Trading restricted to trades by existing securities regulations

■ Platform Management - provide ongoing support per token limits set for raise

■ Website offering - market and promote high end fully compliant website to qualify accredited investors (built-in KYC and AML international rules)

■ Date when offering ends


 

■ E&Y

■ KPMG


@2019 SolidBlock

THE ICONIC ST. REGIS BRAND

Trophy property: 179 units

Property Appraisal Value: $224million

Mortgage: $130 million

Equity: $94 million

NOI: $13.2 million

SECONDARY MARKET TRADING

In August 2020, AspenCoin continued to make headlines, becoming the first third-party security traded on the industry-leading tZero alternative trading system (ATS).

With enthusiastic news coverage and a well-known name behind the token (abbreviated as ASPD), the value of the token increased by almost 30% within 18 months of issuance. With tZero being one of the leading markets for secondary trading, the token continued to trade strongly despite overall market uncertainty surrounding COVID-19

As AspenCoin has demonstrated so far, secondary trading provides ongoing benefits, both for asset owners and investors:

  • Broadens investor access beyond initial STO

  • Offers user-friendly, regulated online trading infrastructure

  • Provides  investors liquidity and flexibility

  • Reduces cost of capital for asset owners

  • Builds investor confidence and trust

Over the long term, secondary trading also has the potential to boost the value of the underlying real estate asset, creating even greater returns.

Through its industry partnerships with tZero and additional ATSs and exchanges, SolidBlock is able to safely provide advanced trading capabilities that were previously only possible for other types of assets.

ASPEN'S  TOKEN ISSUANCE PROCESS DELIVERED BY SOLIDBLOCK

Following the filing for Reg D prospectus exemption offering in January 2018, SolidBlock created a smart contract and digitized platform for the tokenization of the St. Regis Aspen. The hotel became the first private single asset real estate investment trust (REIT) in the US to issue a Security Token Offering

Phase 5: 
Partnering with Secondary Markets 

 

■ Access to Alternative trading systems (ATSs)

■ Other private exchanges

■ Public exchanges offering digital securities trading

■ Secondary markets offer:

  • Robust trading infrastructure
  • Established investor base
  • Built-in KYC/AML 
  • Qualified/accredited investor check process
  • Due diligence in offering quality standards

Phase 5: 
Partnering with Secondary Markets  

 

■ Access to Alternative trading systems (ATSs)

■ Other private exchanges

■ Public exchanges offering digital securities trading

■ Secondary markets offer:

  • Robust trading infrastructure
  • Established investor base
  • Built-in KYC/AML 
  • Qualified/accredited investor check process
  • Due diligence in offering quality standards