<a href="/en/glossary/real-estate/commercial-real-estate-cap-rate/" target="_blank">Capitalization Rate (Cap Rate)</a> = Net Operating Income (NOI) ÷ Property Market Value — the most core metric for evaluating commercial real estate yield and valuation. A 3.5% Cap Rate means: buying this building for $100M generates $3.5M annually in net income. Lower Cap Rate = higher valuation (strong market demand); higher Cap Rate = lower valuation (weak demand or rising interest rates). In <a href="/en/glossary/real-estate/commercial-real-estate-tokenized/">Tokenized Commercial Real Estate</a>, understanding Cap Rate helps you judge whether an RWA property <a href="https://claude-me.com/en/glossary/core-concepts/token/">Token</a> is fairly priced.

Dividing a property's ownership into many small fractional shares (tokens), allowing investors to hold a small portion of a property worth hundreds of thousands of dollars with just a few hundred dollars. Fractional ownership opens the real estate market (previously requiring large capital) to ordinary investors, while preserving rental income distribution and potential capital appreciation.

Tokenizing the debt claims (not property ownership) of real estate mortgage loans, allowing investors to act as 'property lenders' rather than 'property shareholders.' Holding a real estate debt token = holding fixed-rate claims on a property loan; if borrowers default, debt token holders' claims have priority over equity holders for repayment (with collateral protection). Representative protocols: RealT's property loan tokenization, Goldfinch's commercial real estate mortgage pools.

Splitting the ownership or income rights of real estate (houses, office buildings, warehouses) into digital tokens, allowing investors to hold a small fraction of a property worth millions for as little as a few dozen dollars. Real estate tokenization fundamentally turns a 'large block' of property into 'many small pieces,' lowering entry barriers, improving liquidity, and enabling investors worldwide to access assets previously only available to large local institutions.

The tokenization of ownership interests or debt claims in commercial-use real estate (offices, retail centers, industrial warehouses, data centers), allowing institutional and some retail investors lower-barrier access to commercial real estate markets. Commercial real estate tokenization is more complex and higher-barrier than residential, but with larger potential yield structures and asset scale.

A Real Estate Investment Trust (REIT) whose shares or underlying property assets are tokenized and circulated on blockchain, allowing investors to participate in a diversified real estate portfolio in small amounts while benefiting from REIT's tax advantages in many jurisdictions, combined with 24/7 tokenized liquidity and DeFi composability.