$125B Real Estate Giant Ready to Tokenize, But Regulators Say No

$125 billion in assets under management. That's the firepower Barry Sternlicht commands at Starwood Capital Group. And he's ready to unleash it on blockchain-based real estate tokenization — if only regulators would get out of the way.

The $4 Trillion Opportunity Stuck in Red Tape

Speaking at the World Liberty Forum in Palm Beach, Sternlicht didn't mince words: "We want to do it right now and we're ready." The frustration in his voice was palpable as he added, "It's ridiculous that our clients can't do it in token."

He's talking about tokenization — converting physical real estate into blockchain-based tokens that can be traded like stocks. Instead of needing $10 million to buy a commercial building, investors could own fractional shares for $1,000 each. It's not just about making real estate more accessible; it's about injecting liquidity into one of the world's most illiquid asset classes.

The numbers tell the story. Consulting giant Deloitte projects tokenized real estate will explode from $0.3 trillion in 2024 to $4 trillion by 2035 — a staggering 27% compound annual growth rate. That's not just growth; that's a complete market transformation.

The Technology Is Ready, But America Isn't

Sternlicht's enthusiasm for the technology is infectious. "The technology is superior," he declared. "This is the future." He even compared tokenization's current state to artificial intelligence, noting it's "far behind where AI is today" in terms of adoption.

But here's the irony: while American regulators drag their feet, other players are moving forward. Propy, a real estate blockchain firm, announced a $100 million expansion plan last year to acquire mid-size property title firms across the U.S. They're betting on streamlining an industry still drowning in manual processes and paperwork.

Winners, Losers, and the Bigger Game

Who benefits if tokenization takes off? Retail investors get access to previously exclusive real estate deals. Property owners can unlock liquidity without selling entire buildings. Platforms and intermediaries capture new revenue streams.

But traditional players face disruption. Real estate brokers, title companies, and banks that profit from the current system's inefficiencies have reasons to resist. And regulators? They're caught between innovation and investor protection, unsure how to classify these new digital assets.

The global implications are massive. Countries that embrace tokenization early could attract capital and innovation. Those that don't risk being left behind as digital assets reshape finance.