As home prices soar, companies offer investment alternatives

In an effort to increase financial equality, a blockchain-based real estate platform will soon offer users the chance to invest in digital square feet of property in the country’s most sought-after neighborhoods.

As part of the investment vehicle’s launch, Parcl has teamed up with NFL star Ndamukong Suh’s charitable organization, the Suh Family Foundation, to giveaway a down payment on a home worth up to $100,000. One winner will also receive a year’s worth of mortgage and tax payments.

Parcl and Suh hope the platform and giveaway help level the playing field for those priced out investing in a top asset class or owning a home. Suh has seen the exponential increase in home prices firsthand since signing with the Tampa Bay Buccaneers in 2019. While currently a free agent, Suh called Tampa home over the last three NFL seasons.

The S&P CoreLogic Case-Shiller Index recently reported that the value of Tampa Bay homes increased 34.8% for the year ending in March, and Kellan Grenier, co-founder and COO of Parcl, said the Superbowl winner is a strong advocate for financial equality.

“He’s (Suh) very focused on the issue around homeownership … or the inability for more and more people to access the real estate market,” said Grenier. “Ndamukong was quite interested in what we were working on and our mission, which is delivering real estate to everyone, lowering barriers to entry and giving everyone access to this market in a liquid way – in a way that they just can’t today.”

Kellan Grenier, co-founder and COO of Parcl, called the rapid rise of home prices in the Tampa Bay market “shocking.”

The first collaboration with Suh was through Parcl’s Homeowners Association Giveaway. The company minted non-fungible tokens (NFTs) of 7,777 unique combinations of homes from four cities – Los Angeles, New York, Phoenix and Miami. Owners receive early access to the Parcl Protocol, invitations to real-world events, merchandise and staking benefits, where available.

Grenier said proceeds from the NFT sale fund the giveaway, which closed to applicants on June 3. Participants uploaded short videos to the social media site TikTok, sharing how the housing crisis has negatively impacted their lives. Parcl and the Suh Family Foundation will pick five semifinalists this week, and NFT owners will vote on the grand prize winner next week.

Parcl will also help the winner secure their loan structure, make the offer and close on the home.

“Hopefully, we’ll have that wrapped up sometime this summer,” said Grenier.

While based in New York, Grenier said about half of the company’s employees work around the country. His data also shows a 35% increase in home prices throughout the Tampa Bay region, which he called “shocking.”

“We’ve been talking about that quite a bit internally,” said Grenier. “Part of our work with Ndamukong and his team is drawing attention to that and helping think through some solutions.”

Parcl hopes to democratize real estate investment by lowering barriers to entry. That includes reducing the capital and time needed and providing diversification and liquidity. Grenier called real estate the largest global asset class while remaining the most inaccessible.

A lack of supply has increased inflation, said Grenier, and as a result, down payments require a significant portion of a potential buyer’s income. Oftentimes, people are priced out of homeownership altogether.

“And so, what we’ve done, is look at all the options available for folks to get exposure to the real estate market, beyond just buying a home,” added Grenier.

Grenier said real estate investment trusts operate on stock exchanges but limit investors to pre-selected portfolios. There are also other fractionalized ownership platforms, but he said those are usually only open to accredited investors, invest in specific properties or developments and lack liquidity.

Grenier said Parcl created tracking indexes for “basically” every city and neighborhood across the country to solve for issues commonly found in other real estate investment platforms. Eventually, the company will expand internationally. He said Parcl collects real-time transaction data to create a representative price.

“We believe that every neighborhood has a price,” said Grenier. “And if every neighborhood has a price, we should be able to create a liquid market around that price.”

The prices feed into smart contracts, and users can invest in the index utilizing blockchain technology,. With no minimum investment required, Grenier said users could buy “a digital square foot” of real estate in any neighborhood Parcl offers for as low as a cent, based on a value determined by the index.

The Parcl protocol is built on and backed by the Solana blockchain, and its proprietary valuation index – Parcl Price Feed – tracks the underlying price movements. Grenier said users could “cash-out” at any time, and after two test nets or beta versions, the official platform will launch in the next month.

Grenier said Parcl would focus on metro areas with the highest quality data available, beginning with New York, Los Angeles, Miami, Phoenix and Seattle. From there, the plan is to offer the chance to invest in all 32 NFL cities – including the Tampa Bay market.

“That kind of resonated with Suh,” said Grenier. “Those are large metro areas, with enough people to support an NFL franchise.”

Grenier said many people involved with Web3, blockchain and cryptocurrency believe that real estate, as the most recognizable global asset, should also be the easiest to invest in and understand. He added that even if people do not comprehend the underlying technology, they should understand the rising value of places like SoHo or Miami Beach.

“Effectively, all you’re doing on the Parcl protocol is getting exposure to the price appreciation or depreciation of those neighborhoods,” said Grenier. “And we’re just using crypto to bring that to you.”

For more information on Parcl, visit the website here.