$ 29M property offered exclusively in Bitcoin

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Slowly but steadily, Bitcoin (BTC-USD) is being used to buy everyday items like coffee and cars – and now real estate is joining the fun as well.

The first commercial property in New York is bringing digital coins to market. Magnum Real Estate Group is selling three complete commercial condos with a fully let downstairs on Manhattan’s Upper East Side for $ 29 million – but will only accept Bitcoin.

Located at 385 First Avenue in a new construction luxury residential building in Gramercy Park, the condos cover 9,000 square feet and the ground floor is fully leased by ProHealth, Mighty Pita and M&T Bank.

“There is a demand for real estate and nothing is being offered to crypto holders,” Ben Shaoul, managing partner of Magnum Real Estate Group, told Yahoo Finance.

“Our idea is to offer something unique and to try to match crypto holders with those who want to sell real estate,” he added.

This is not the first crypto transaction for Shaoul. He closed three residential deals in 2018, including the sale of a retail condo on the Upper East Side for $ 15.3 million in Bitcoin. And Shaoul expects real estate transactions using crypto to grow.

“I see the track of crypto trading growing exponentially,” Shaoul said.

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“It helps that bitcoin is at record highs, but I also think investors have been very successful in owning bitcoin and now they are looking for cash flow in assets and [real estate] gives someone the option to buy long term real estate with cash flow so that they can either withdraw tokens from the table or transact and sell the asset in a few years as its value is appreciated by another crypto buyer, ”he added.

Shaun Pappas, partner at real estate law firm Starr Associates LLP, compares acquiring real estate using crypto to upstream diversification with dividends.

“Commercial sales with crypto were the next logical step as this section of the market matures,” Pappas explained. “Commercial real estate in New York, especially in this location, will be here forever. The owner will always have access to the tenants.

Still, real estate transactions involving crypto are not that new. Bill Zielke, CMO of BitPay – a cryptocurrency payment processor that processes the real estate transaction for Magnum – says the payment processor has processed crypto real estate transactions for the past few years for international buyers, and more recently homes. ski resorts in the western United States and properties in New York.

How it works

Fifth Ave and West 33rd St street sign at sunset in New York City – Urban concept and road direction in downtown Manhattan – World famous US capital destination on a dramatic and warm filtered look

The bitcoin transaction has efficiencies and benefits. This means the process settles the next business day, instead of the usual 30-90 days, and the buyer sends their cryptocurrency from a digital wallet to Bitpay’s wallet.

Magnum Real Estate doesn’t have to touch crypto. Day-to-Day Settlement is processed by the U.S. Automated Clearinghouse for Electronic Funds Network, which handles financial transactions for consumers, businesses, and governments, and Magnum receives U.S. dollars.

Then BitPay takes the cryptocurrency, Magnum gets paid in dollars, and the buyer’s sale is complete and settled within a day. The transaction could be done 24/7 from anywhere in the world – and because it is bitcoin and takes place on the blockchain, no bank or cable from traditional payment is not involved and it is secure.

If the transaction is funded, BitPay settles the crypto portion of the transaction and the funded portion will be handled by the real estate company through normal financial lending channels.

As the price of bitcoin and other cryptocurrencies has reached record highs, investors are looking to cash in and buy something with this crypto, be it real estate, cars, electronics, or cash. jewelry.

“There is a correlation with our volumes and the price,” Zielke said. “As the price goes up, people tend to spend… I expect this trend to continue. More people are buying and holding crypto than ever before. So as this increases, the expenses will also increase. “

Luxury purchases using crypto are on the rise. BitPay, which has relationships with global yacht broker Denison and luxury car dealers, including Ferrari and Lamborghini, is experiencing strong growth. About 32% of BitPay’s processed volume in October came from purchases of luxury goods, including jewelry, gold, yachts and real estate.

In the third quarter, BitPay recorded similar amounts with around 30% of the volume (dollar amount of sales) of the luxury goods category. The cryptocurrency of choice was bitcoin, which accounted for 60% of the volume.

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