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Tokenizing real estate involves converting ownership or economic rights in property into digital tokens on a blockchain platform. Blockchains can replace outdated land records, and smart contracts can automate real property transactions. Tokenization of real estate assets on blockchains could change the global real estate industry, but better integration of legacy systems with blockchain platforms and better regulatory frameworks will be needed.

Real estate is traditionally an illiquid asset class that requires significant capital investments and involves time-consuming and expensive transaction processes reliant upon numerous intermediaries. New technologies, including blockchain platforms and smart contracts, will bring greater efficiencies and lower costs. Tokenization will be impactful because it will streamline transactions and lower the barriers to investment by enabling ownership interests to be divided across a wider pool of investors. Deloitte has predicted that the global-tokenized-real-estate market could grow from around $300 billion currently to as high as $4 trillion in 10 years.

Land records are typically maintained by a combination of local, state and federal government agencies. Most deeds, mortgages, encroachments and other interests affecting the title to real property are recorded at the local level. Some counties still rely on fragmented and outdated systems that are paper-based or poorly digitized. Other jurisdictions offer online access to records to allow officials and the public to search property information, plats and transaction histories. Technology innovations, such as digitization, geographic information systems (GIS) and online search tools, are improving the accessibility, reliability and management of land records. Digitization of land records will be required to tokenize residential, commercial, or mixed-use properties and portfolios. Blockchain platforms and smart contracts will need to be developed and deployed to automate token issuance, transfers, distributions and governance.

Blockchain platforms are digital infrastructures that provide the tools and frameworks for building and managing applications that are decentralized, secure and transparent. They record data and transactions across a network of computers and employ protocols to validate transactions across the network. Once information is recorded, it cannot be altered retroactively. Most platforms support smart contracts or self-executing digital agreements that encode deal terms directly into computer code. These agreements automate processes and reduce the need for intermediaries, including attorneys, title companies, notaries and government officials. No single party controls the smart contract or its execution. Smart contracts should be secure, transparent and auditable to prevent manipulation and fraud. Once deployed, they can release funds, transfer digital assets or trigger notifications when specified conditions are met.

The tokenization of real estate involves a number of steps: (1) a property or portfolio is professionally appraised to determine its market value; (2) a special-purpose-legal entity (SPV) is formed to hold the title to the property or portfolio and comply with applicable laws; (3) tokens for the property are issued on a blockchain platform, typically representing fractional ownership or income rights; (4) smart contracts are encoded onto the blockchain platform to automate token issuance and transfers; (5) investor eligibility requirements are defined, and tokens are traded on compliant blockchain platforms to enable secondary-market trading; and (6) transparent record-keeping and governance is handled on the blockchain platform, with regular reporting to investors. Benefits of tokenization include cost efficiencies due to the elimination of intermediaries and trustworthiness due to a blockchain record that cannot be easily tampered with.

Teton County, Wyoming was the first county to implement a blockchain-based system for recording land titles and property records with Medici Land Governance (MLG) in 2019. Baltimore, Maryland's blockchain land records pilot launched in December 2023, focused on recording the city's inventory of around 13,000 vacant properties to streamline transactions, reduce title fraud and accelerate rehabilitation. Bergen County, New Jersey, announced the largest blockchain-based-land-record-management project in the United States — a five-year agreement with Balcony to digitize over 370,000 deeds representing around $240 billion in real-property value onto the Avalanche-blockchain platform, serving nearly one million residents. The Dubai Land Department announced a multibillion-dollar-tokenization project in March, publicly launched on May 25, designed to transform property ownership by 2033 with tokenized assets projected at around $16 billion, with investments starting at around $540.

RealIT acquires properties globally and places each into an SPV; ownership is divided into digital tokens representing fractional interests, issued on the Ethereum-blockchain platform, with token holders gaining voting rights on property-management decisions. Since 2019, over 700 properties have been tokenized across the United States and three other countries. Manifest has launched $USH, a tokenized-real-estate asset backed by U.S. residential properties, expanding access to international investors including in India. The growing list of companies enabling fractional ownership in 2025 includes Propy and AssetBlock in the United States, Polymath in Canada, SolidBlock in Israel, Brickblock in Germany and Antier Solutions in India.

Jurisdictions tend to focus first on digitizing existing land records rather than a complete overhaul with blockchain technology. Bureaucratic resistance to change and opposition from potentially displaced intermediaries slows adoption. Integrating blockchain with legacy systems requires standardized protocols to address risks such as fraud and data fragmentation. Any transition requires substantial investments in infrastructure, training and public support. Blockchain technology also has limitations related to data storage, data integrity, coding complexity, privacy features and processing speeds, and networks can be hacked when access controls fail. Another significant concern is the evolving and currently insufficient regulatory framework surrounding blockchain technology and smart contracts.

Notwithstanding these obstacles, the adoption of blockchain platforms to tokenize real estate appears to be gaining traction. Regulatory-compliant solutions should be favored by large and small investors. Tokenization will expand beyond residential and commercial buildings to include data centers and other infrastructure. Citi Ventures has noted that tokenized real estate could serve as an alternative to REITs because it is more transparent, has lower fees and improved liquidity, with a broader reach to medium-income investors.