How to tokenize commercial property to raise capital (2026).

The reason this route exists is that a building throwing off rent is, to an investor, an income stream with a hard asset behind it, which is precisely what a security can be written against. Traditionally you had two ways to turn that into cash without selling outright: a mortgage from a bank, or an equity partner who takes a large stake. Tokenization adds a third, where you sell the same equity or debt claim to a wider set of investors in exact fractions, and the instrument is a security token rather than a loan agreement or a deal with a single counterparty.

What tokenization does not do is change the underlying credit. A building well let to solid tenants on long leases is a straightforward raise, on-chain or at a bank. One that is half empty or let to weak tenants is a hard raise everywhere, and dressing it as a token does not fix that. So read the rest of this guide this way: the token and the SPV are the mechanical part, and the quality of the building and the work of placing the tokens are what decide whether you raise.

Everything downstream, how much you can raise and on what terms, rests on the valuation, so start there and make it independent. For income-producing commercial property the valuation is built on the income the building produces, not on what it cost to build or what you paid. The two inputs are the net operating income, the rent left after operating costs, and a market capitalisation rate, the yield investors currently accept for that asset in that location. Divide one by the other and you have an income-based value.

As an illustration only, and you should verify the numbers for your asset, a logistics unit with EUR 600,000 of net operating income valued at a 6 percent cap rate implies a value of around EUR 10 million; at a 7 percent cap rate the same income implies closer to EUR 8.6 million. The takeaway is not the exact figure, it is that small movements in the cap rate move the value a lot, which is why the valuation has to be independent and grounded in real comparable evidence rather than in your own optimism.

Three things move the cap rate, and therefore the value: occupancy, tenant covenant strength, and lease length, often measured as the weighted average unexpired lease term. A fully let building on a long lease to a strong tenant commands a keener cap rate and a higher value; one with short leases, weak tenants, or vacant space is valued more cautiously. Get an independent valuer to set this: it is the number every investor underwrites, and it decides how large a raise the building can honestly support.

Once you have a value, the building has to sit in a vehicle that investors can hold a claim against cleanly, which is what a special-purpose vehicle is for. You put the property into an SPV, a company whose only job is to own that one building and collect its rent. The security tokens are then a claim on that SPV, its asset and its cash flow, and nothing else. That ring-fencing is the point: an investor buying a token is exposed to that building, not to the rest of your business or your other properties.

That separation helps the raise both ways. Investors get a clean, bankruptcy-remote claim on a defined asset, far easier to underwrite than a stake in a sprawling operating company. And you keep the tokenized property walled off from the rest of what you own, so a raise against one building does not entangle the others. The SPV also gives the token a clear thing to be: a share of the company's equity, or a debt instrument it issues.

How an SPV is set up, why it is bankruptcy-remote, and what it does and does not protect are covered in full in the how a tokenization SPV works guide. For planning, treat the SPV as the container that makes a single building tokenizable, and its setup as a structuring decision to take with counsel rather than a form to fill in.

With the building in an SPV at a defensible value, you have two genuinely different ways to raise against it. The first is equity: you sell a fraction of the SPV's equity at the agreed valuation, so investors own a slice of the building and its upside. The second is debt: you borrow against the building at a conservative loan-to-value, issuing a debt token that pays a coupon serviced from the rent. Equity raises capital you never repay but dilutes your ownership; debt keeps you the full owner but has to be serviced and is capped by how much the building can safely carry.

For the debt route, the size is driven by loan-to-value and debt-service coverage. As an illustration only, verify for your asset, a property raise is often sized between 50 to 70 percent of value depending on the asset, so a building worth EUR 10 million might support debt of EUR 5 million to EUR 7 million. What moves the number within that band is occupancy, tenant covenant strength, lease length, and asset quality: a fully let, long-leased, well-located building sits at the top; a weaker one at the bottom or below. On top of that cap, you size the coupon so the rent comfortably covers it, a debt-service coverage ratio well above 1.

For the equity route, the size is simpler arithmetic but a bigger decision: at a EUR 10 million valuation, selling 30 percent of the SPV raises around EUR 3 million and hands 30 percent of the ownership and upside to investors. How large a raise either route can support, and how the sizing works, is the subject of the how much can you raise guide, and the three-way comparison of tokenized equity, tokenized debt, and a bank facility is in the tokenization versus bank debt guide.

The token you issue against the SPV is a security, and getting the classification right from the start matters. A token that gives its holder equity in the SPV or a debt claim serviced by the rent is a financial instrument under MiFID II, so it lives under mature securities law and its supervisors. It is not a MiCA crypto-asset: MiCA governs crypto-assets that are not financial instruments, and a claim on a real building's cash flow sits on the securities side instead. Where that boundary runs, and what pulls a token onto the MiFID II side, is set out in the MiCA and CASP licensing guide.

Being a security does not mean you need a full approved prospectus. Most tokenized property raises fit an exemption under the EU Prospectus Regulation: an offer only to qualified investors, an offer to fewer than 150 non-qualified investors per member state, or a high enough minimum ticket. Each exemption shapes who you can market to and how, so the route you choose is a strategic decision, not a formality. The routes and how each constrains the raise are in the prospectus exemptions guide.

The last piece is where the SPV lives. The jurisdiction affects your tax, the ease of the structure, and how comfortably European investors can hold the tokens, and it is a genuine trade-off rather than an obvious default. How the usual EU jurisdictions compare for a tokenized raise is the subject of the best EU jurisdiction guide. Together, the classification, the exemption, and the domicile are the legal frame around the raise, worth settling with counsel before you approach a single investor.

Everything up to here, the valuation, the SPV, the equity or debt choice, the legal wrapper, is what a good adviser and good counsel can put together in a defined process. Placing the tokens is the part that decides whether you raise, and the part people underestimate every time. A perfectly structured, fully compliant security token that no investor buys has raised nothing.

Placing it means reaching the right investors, the qualified investors or the limited group your exemption allows, presenting the building and its income in terms they will underwrite, and getting them to commit. That is a distribution job, not a legal step, and it is why the desk both structures the raise and runs the placement. How to reach those investors is covered in the reach investors guide, and how to size a raise to what you can realistically place is in the how much can you raise guide.

Two honest caveats. First, the setup cost of a tokenized raise is higher than arranging a bank loan; you pay for structuring, the SPV, issuance, documentation, and distribution, and the cost guide sets out realistic ranges. Second, secondary liquidity, the idea that investors can trade the tokens on later, is a maybe and not a promise; it depends on the venue, the investor base, and demand, so present it as a possibility, not a feature. What tokenization reliably adds over a bank loan is wider reach and precise fractions, not a liquid market.

Read the table top to bottom and the shape of the job is clear. The first two rows are the groundwork; the middle two, equity or debt, are your main decision; the wrapper is settled ground you use rather than invent; and the last row, the raise, decides whether any of it becomes capital. Every figure is illustrative. Verify each one for your asset, and treat none of it as investment advice.

The straight version, the opposite of how tokenization is usually pitched: tokenizing your building widens who you can raise from and lets you sell precise fractions of equity or debt, but it does not make a bad building good. A well-let property with strong tenants and long leases is a good raise whether you take it to a bank or to token investors; a vacant or weakly let one is a hard raise in both places, and putting it on-chain changes the packaging, not the credit.

Be clear about effort and cost too. The token and the SPV are the mechanical, predictable part of the job, and a competent adviser and counsel can assemble them in a known process. The raise, the placing of the tokens with real investors, is the slow, uncertain, valuable part, and it is where a raise is won or lost. Keep one thing from this guide: the token is the easy part and the raise is the hard part, so choose an adviser on whether they can do the second, not just the first.

One more distinction worth keeping straight: this guide is written for you, the owner raising capital against a building you control. If you are on the other side of the desk, weighing whether to put money into a fraction of someone else's tokenized property, the questions are different, and they are covered in the companion is tokenized real estate a good investment guide. Same instrument, opposite seat.