Real estate companies are increasingly accepting cryptocurrency
Yahoo Finance's Jennifer Schonberger explains why Magnum Real Estate is only accepting bitcoin for three condos in Manhattan and the trend of crypto in real estate transactions.
Video Transcript
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JULIE HYMAN: You're perhaps not using crypto or Bitcoin to buy your pizza, but it is being used for an increasing number of items like NFTs, for example. But what about luxury transactions or large ticket transactions, like real estate? That's something that Yahoo Finance's Jennifer Schonberger has been looking into. And that actually does seem to be happening.
JENNIFER SCHONBERGER: Hey, good morning, Julie. Yeah, crypto is being used more and more for real estate transactions. In fact, the very first commercial real estate property has been put on the market in New York for Bitcoin. Magnum Real Estate group is selling three retail condos, complete with a fully rented out retail bottom floor in Manhattan's Upper East Side for $29 million, but they're only accepting Bitcoin.
And while it's the first commercial property listing for Bitcoin, we've seen real estate transactions and crypto on the residential side picking up the past few years. Bill Zielke, CMO of BitPay, a cryptocurrency payment processor that's processing the real estate transaction for Magnum, says that the payment processor has been handling crypto real estate transactions the past few years for international buyers, and more recently, in the US for ski homes in the Western US and properties in New York. Before listing its commercial property, Magnum Real Estate did three residential deals for Bitcoin, including one on the Upper East Side for more than $15 million in Bitcoin.
Ben Shaoul, the managing partner of Magnum Real Estate, says he expects transactions in crypto to continue to grow.
BEN SHAOUL: I see the runway for transactions with crypto only increasing exponentially. The fact that Bitcoin is at record highs, you know, obviously helps. But I think also investors are investors and they've done very, very well owning Bitcoin. And now, they're looking for cash flowing assets.
JENNIFER SCHONBERGER: And as the price of Bitcoin has continued to skyrocket along with other cryptocurrencies, there is a correlation between those record highs and the demand for real estate from investors. So as Shaoul mentioned, we should expect the crypto transaction part of the real estate market to continue to grow in the coming years. Julie?
JULIE HYMAN: But of course, whenever I hear about this stuff, the price moves so much. Like, how do you decide how much Bitcoin is going to be transacted? Like, when is the-- you know, what happens if you decide you're going to buy this apartment in Bitcoin and then the price moves big? Like, how do they-- I don't know. How do you figure all that out?
JENNIFER SCHONBERGER: Yeah, I mean, I guess it really just-- like you said, it does depend on the price. But if you've amassed enough of a fortune and you feel like you want to cash out and you want to deploy that into another cash flow asset-- whether it's an investment or it's, you know, where you actually want to live-- then you're able to transfer that. And by the way, it's very interesting, because when you deal in Bitcoin or crypto, the settlement process is incrementally faster.
It only-- it settles the next day instead of taking 30 to 90 days to try to settle this transaction. So I guess if you're in a hurry or you're an international buyer or investor, this certainly eases the payment process as well.
JULIE HYMAN: Maybe so. All right, we're going to count on you to keep us posted on this trend, this burgeoning trend.
