In a Bid to Lure Investors, a REIT Turns to Bitcoin Payments
You can buy a bottle of wine, a movie ticket, a laptop, a cruise with bitcoin.
Now, you can buy a small piece of a parking garage, a warehouse or a cold storage facility — properties that broadly fall into the supply chain logistics category — with bitcoin too.
It’s still not exactly common, but a growing number of merchants are working with bitcoin payments firm BitPay to let people spend their cryptocurrency without running it through an exchange or putting it on a debit card that just sells it at the point of sale (POS).
But commercial real estate is something new, and not just because you can do it with crypto.
NOYACK Capital is creating a real estate investment trust (REIT) that invests in supply chain real estate — a low volatility, lower risk, cash flow-focused type of real estate investment that is, as a rule, only available to what the Securities and Exchange Commission (SEC) calls “accredited investors” — a good shorthand for millionaires, hedge funds, family offices and other institutional investors.
That’s something NOYACK Capital wants to change with its new NOYACK Logistics Income REIT, CJ Follini, the firm’s managing partner, principal and chief information officer, told Karen Webster.
The firm “is taking the industry of private investments, also called alternative investments … and opening it to all investors — retail investors,” Follini said.
There will be three investor classes with minimum investments of $200,000, $20,000 and the unheard-of level of $2,000.
While Follini said he prefers the term “aspirational investors,” these are people who have “generally never had access to private investments. They were simply closed clubs,” catering to giant hedge funds, sovereign wealth funds, pension funds and the like.
That means “there is a complete lack of access for many investors to some of the most successful asset groups of investments in history,” he said.
Non-Crypto Curious
It’s those non-accredited, aspirational investors that brought NOYACK Capital to BitPay for the tools to easily and seamlessly accept payments in bitcoin (BTC) and a half dozen other cryptocurrencies from ether (ETH) to dogecoin (DOGE), as well as five stablecoins.
Follini said NOYACK Capital’s analyses led it to conclude that it’s worth pursuing “a cryptocurrency bitcoin enthusiast, maybe a professional investor who has been involved in the investment of cryptocurrency for years,” who has managed to collect substantial assets — often without much experience in or even knowledge of traditional investing.
With the geopolitical and economic risks growing to levels unseen for decades — inflation is at a 40-year high, for example — he said “it is our opinion that people who have been doing one thing for a long period of time are saying, ‘I’m a professional investor. I’ve been focused on [crypto], and the world has changed. Maybe I should look at diversifying.”
That doesn’t mean turning their focus away from crypto, he said. But diversifying into more conservative assets will give them the comfort to keep pushing into other crypto opportunities with more risk and potential reward.
That’s why, Follini said, NOYACK Capital’s only marketing at this crypto-focused, aspirational investor “is content marketing, it’s education marketing, it’s thought leadership. It’s the only way to do that.”
While an accredited investor would know what supply chain real estate actually means, and what it entails, it’s not something people outside that world would necessarily know about — even professional crypto investors who may have the funds to qualify as accredited, at least in terms of the financial requirements.
On top of that, few have the memory dating back to the last time inflation was above 7% — four decades ago.
“We are going to explain ourselves to people who have had one type of experience investing within cryptocurrency — a very successful one — but now there’s a different landscape,” he said. “They have to see what works in that landscape. We’re here for an alternative.”