Ocree Capital Inc. has launched a Canadian regulated real estate platform utilizing blockchain, and a $51.97-million Winnipeg apartment complex is its first listing.

The Ocree platform, built exclusively on Polymesh blockchain, enables fractional ownership of commercial properties through a point-and-click interface. Its simplified approach to property fractionalization provides liquidity to owners while enabling accredited investors to access asset classes traditionally limited to institutional investors and industry professionals, the company states.

“You know how much is invested, how your return is doing and that the proper due diligence is being done on the property,” Ocree Capital chief executive officer Ted Davis told RENX. “Those are all the pieces that it offers on the sell side, so they know that it's happening the right way, as well as on the buy side because now you're going into it with more confidence that there's a regulatory body who's overseeing the whole process.” 

If his name seems familiar, Davis also serves as principal and chief operating officer for real estate services provider Avison Young’s Canadian operations.

Ocree’s revenues come from origination fees paid upon settling a transaction and platform fees that cover ongoing reporting required in the management of investors who come into the platform. 

Ocree’s leadership

Ocree is registered as an exempt market dealer in all provinces and territories except Quebec. Its platform is specifically tailored to the commercial real estate industry.

“This is not part of Avison Young but it is complementary with Avison Young and, arguably, the rest of the real estate industry,” Davis said, adding that he’s working closely with Avison Young chairman and chief executive officer Mark Rose.

In addition to Davis, Ocree’s executive team also includes: 

• vice-president and co-founder Nick Boertien, an Avison Young principal;
• chief compliance officer and head of legal Anne Ramsay, the managing director of financial technology advisory firm Ramsay Advisors;
• Ocree Financial president Ryan Wilkinson, an Avison Young principal and sales representative;
• and Ocree Shared Services president Ryan Parkinson, the director of operations for interior styling and staging studio OKLU.

Ocree also employs back-end people, including dealer representatives and those involved with compliance and information technology.

Polymesh and blockchain

Polymesh Association is a not-for-profit dedicated to the growth of the Polymesh ecosystem through Polymesh and Polymesh Private. Polymesh is a public-permissioned blockchain which was purpose-built for real world assets in order to streamline capital markets and open the door to new financial products.

Blockchain is a decentralized, distributed ledger technology that records transactions across multiple computers, ensuring security, transparency and immutability. Each transaction is grouped into a block, verified by a network of computers, and added to a continuous chain of records.

The technology reduces the need for intermediaries and is widely used in supply chain management and financial services.

“The blockchain infrastructure allows a digital ledger in order to help complement the trading and the efficiency of settling for the ownership of the assets,” Davis said. 

Lot 6 in Winnipeg

The Ocree platform’s first listing is Lot 6, located at 15 Berwick Ct. in Winnipeg. There’s $4 million of equity being offered through Ocree’s streamlined process to investors to purchase fractional ownership in the professionally managed, 156-unit, class-A apartment complex.

Hughes Development owns and is the asset manager for 15 Berwick Ct., which is property managed by Cushman & Wakefield.

The energy-efficient complex has geothermal heating and cooling and amenities that include fitness centres, rooftop social spaces, electric vehicle charging stations, a Starbucks kiosk and a business centre.

“It has stabilized income, it's a newer build in under the last five years, it has very low vacancy, it’s close to a light rail transit line and there's future development possible in the area,” Davis said, listing some of the selling points of the property.

“It's a very stable investment for somebody who's interested in investing in multiresidential or apartment buildings.”

Future investments

While there are no minimum or maximum amounts that can be invested into properties listed by Ocree, it targets accredited investors and gives them an opportunity to directly invest in a particular asset, as opposed to a real estate investment trust where multiple properties are bundled together.

Davis said Ocree is talking to owners of income-producing properties for future projects, but it would also consider involvement with development land going through rezoning.

“We assess investments on a deal-by-deal basis and the geography doesn't necessarily matter,” Davis said, adding that Ocree goes through 64 lines of due diligence on each asset.

The next projects in Ocree’s investment pipeline are a retail plaza and a property site plan-approved for a multiresidential development.

“We want to hit different asset classes in order to best illustrate what the platform can do and where people's options are for investment,” Davis said. “We want to get this first one done and then we've already started the due diligence on the additional properties.

“There has been very strong demand from the property owner side and we continue to get calls and reach-outs from different groups.”

Ocree is also investigating expanding into the United States in the future.