Real-Estate Securities

1. The default: a single-asset SPV

For 90% of active real-estate raises — a specific property, a specific development, a specific bridge loan — the operating structure is a single-asset SPV: a limited liability company formed to hold exactly one asset (or one linked asset pool) and to accept investor capital via a Reg D 506(c) offering.

The typical structure:

Sponsor entity (the operating company) forms the SPV and serves as its Manager.
SPV holds fee title (or leasehold) to the property.
Investors hold membership units (Class A) with pro-rata economic rights.
Sponsor holds a separate class (Class B, or "promote") entitled to a share of upside above a preferred return hurdle.
Debt (if any) is secured by the property, non-recourse to investors, and often carved out with bad-boy guaranties from the sponsor.

This is the pattern the Unykorn Legal Ops SPV-in-a-Box tool generates end-to-end.

2. The alternative: pooled vehicles (funds, REITs, DSTs)

Private Real-Estate Fund

Multi-asset pooled vehicle. Master LP + GP (or LLC + Manager). Investors commit capital to be deployed across a diversified portfolio. Blind-pool or committed-pipeline. Typical horizon 7–10 years with 3-year investment period. Reg D + 3(c)(1) or 3(c)(7) exclusions from ICA registration.

Best for: institutional capital, diversification-seeking investors, sponsors with pipeline visibility.

Non-Traded REIT

Real Estate Investment Trust that files a public offering (S-11 or 1-A) but doesn't list on an exchange. Retail-accessible. Must distribute at least 90% of taxable income to shareholders. Subject to SEC reporting. Tokenized versions increasingly common.

Best for: retail distribution, tax-efficient income, sponsor with scale + audit readiness.

Delaware Statutory Trust (DST)

Pass-through vehicle designed for 1031-exchange investors. Beneficial interests treated as direct property ownership for tax purposes. Highly rigid: no reinvestment, no new debt, no new investors after closing. Purely a passive-hold structure.

Best for: 1031 buyers seeking to defer capital gains from a prior sale, with a stabilized income-producing asset.

Qualified Opportunity Fund

SPV or fund that invests in property in a Qualified Opportunity Zone. Investors defer capital gains and eliminate tax on new appreciation after 10-year hold. Requires 90% of assets deployed in QOZ property, substantial improvement requirement, active-business rules.

Best for: investors with recent capital gains + development-stage assets in QOZ census tracts.

3. CMBS tranching — the debt-side structure

Commercial Mortgage-Backed Securities are the primary vehicle for institutional real-estate debt at scale. A CMBS transaction packages a pool of commercial mortgages into a trust, which issues bonds (tranches) with progressively lower priority claims on the underlying cash flow.

Tranche	Priority	Rating (typical)	Yield
Senior (A / AAA)	1st in line for interest + principal	AAA / AA	Lowest — treasury + spread
Mezzanine (B)	Subordinated to Senior	A / BBB	Middle — premium over senior
Preferred Equity (C)	Subordinated to all debt, priority over common equity	Below investment grade	Equity-like return, ideally 15%+
Common Equity	Residual claim after all above are paid	Unrated	Highest expected return, first loss

The Unykorn Legal Ops System supports CMBS tranching in the SPV structure — see the cmbs field on the deal record.

4. Construction-draw escrow — the "milestone-locked" pattern

For ground-up development deals, investor capital is not deployed all at once. It is placed into escrow and released against milestone-completion attestations. The typical draw sequence:

Site preparation + entitlements complete
Foundation + framing to slab
Vertical construction to weather-tight shell
MEP + interior buildout
Certificate of occupancy + punch list

Each draw requires: (i) an inspector or drone/BIM oracle attestation that the milestone is complete; (ii) a mechanic's-lien waiver from the general contractor and each material sub; (iii) an owner's-representative sign-off; and (iv) proof that construction insurance and worker's-comp are current.

Smart-contract-based draw escrow implements this on-chain: multi-sig approvers plus attested oracle input plus signed waiver hashes.

5. Tokenization patterns for real estate

Fractionalized single-asset

SPV holds one property. Units are tokenized on ERC-3643 or ERC-1400. Each token represents a fractional membership interest. Best for high-value single assets ($5M-$50M range).

Tokenized REIT shares

Existing REIT (private or non-traded public) issues digital shares alongside or instead of paper. Share ledger lives on-chain. See Securitize + REIT sponsors.

Tokenized loan participation

Underlying commercial mortgage loan is participated to multiple lenders via tokenized participation certificates. Enables secondary trading between qualified purchasers.

Tokenized rent stream

Tokens represent the right to receive a portion of net rental income. Structured as revenue-share (not equity), potentially simpler securities profile depending on structure.

6. The compliance layer — what changes vs. traditional

A tokenized real-estate offering adds three requirements on top of a traditional 506(c) SPV raise:

On-chain transfer restrictions (where the operating agreement calls for them). Compliance modules commonly enforce the restrictions the sponsor and counsel elect — accredited-only transferees, issuer consent, holding-period gating tied to Rule 144(b)(1)(ii). Note that Rule 144 itself imposes no accredited-purchaser condition on a non-affiliate of a non-reporting issuer after one year; accredited-only resale is a contractual feature (or reflects reliance on Section 4(a)(7)). ERC-3643 with configured compliance modules is a common implementation.
ONCHAINID identity. Every token holder must have an on-chain identity claim proving accredited status. Verification is typically outsourced to a claim issuer (Verite, ONCHAINID, Circle Verite).
State securities-agent status for the token infrastructure provider. The technical vendor (Securitize, INX, Prometheum, Texture Capital) often takes on registered broker-dealer or transfer-agent status. Confirm before selecting.

7. Tax posture

Most real-estate SPVs elect partnership taxation (Subchapter K). This means:

The SPV files Form 1065 annually; each Member receives a Schedule K-1.
Losses and deductions (depreciation, mortgage interest) flow through to Members' individual returns.
Distributions are generally not taxable events (they reduce basis first).
Ordinary rental income, capital gains on eventual sale, and Section 1231 gain each get separate treatment.

Tokenized structures do not change this — the token is just a certificate representing the K-1-eligible membership interest. The K-1 still goes to the wallet-associated legal entity.