BrickMark: Tokenised Real Estate on the Swiss Blockchain

BrickMark Group holds a singular position in Switzerland’s tokenisation history: in January 2020, it completed what was at the time one of the largest real estate tokenisation transactions in the world — the acquisition of a prime Zurich commercial property on Bahnhofstrasse, partially funded by a token sale of approximately €50 million. The transaction demonstrated that tokenised real estate was not merely a technical curiosity but a commercially viable structure capable of funding the acquisition of trophy assets in one of the world’s most expensive retail real estate markets. Five years on, BrickMark is managing a portfolio of tokenised European prime commercial real estate and has become the benchmark case study for Swiss real estate tokenisation.

Founding and Business Model

BrickMark Group was founded in 2018 in Zurich, combining real estate investment expertise with blockchain technology capabilities. The business model is distinctive: BrickMark is not a technology platform that facilitates third-party tokenised real estate transactions — it is a real estate investor and developer that tokenises its own property acquisitions, selling fractional token interests to investors.

This direct ownership model differs from competitors such as Tokenestate (which tokenises fund units that invest in property portfolios) and RealUnit (which backs a stablecoin with Swiss real estate). BrickMark’s investors directly hold economic interests in identifiable properties — a specific building on a specific street — rather than interests in a fund or diversified portfolio. This direct exposure appeals to a segment of institutional and sophisticated individual investors who want real estate tokenisation to mean exactly that: tokenised ownership of real estate, not tokenised units in a real estate vehicle.

The business model requires two competencies that are rarely combined in a single organisation: real estate sourcing, due diligence, acquisition, management, and disposition; and blockchain technology, smart contract development, token legal structuring, investor KYC, and secondary market operation. BrickMark has assembled teams with expertise across both domains, making it one of the more operationally complex fintech-adjacent businesses in Switzerland.

The Landmark Transaction: Zurich Bahnhofstrasse

In January 2020, BrickMark acquired a premium commercial property on Bahnhofstrasse — Zurich’s primary luxury retail and commercial thoroughfare, consistently ranked among the most expensive retail streets in Europe — for a total consideration of CHF 130 million. Approximately CHF 80 million of the acquisition was funded through traditional debt (mortgage financing from Swiss banks) and equity; the remaining approximately €50 million (approximately CHF 55 million at then-prevailing exchange rates) was funded through a token sale.

The token sale involved the issuance of BrickMark tokens representing equity interests in the Swiss GmbH that owns the property. Investors who participated in the token sale received tokens proportionate to their investment, giving them:

• Economic participation: a proportionate right to net rental income generated by the property
• Capital appreciation exposure: a proportionate interest in the property’s capital value, realised on sale or refinancing
• Liquidity mechanism: the ability to sell tokens on a regulated secondary platform, providing an exit mechanism that physical real estate ownership does not normally provide

The legal structure — equity interests in a Swiss GmbH that owns property, represented by blockchain tokens — was carefully constructed to comply with Swiss corporate law, Swiss financial market law (FINMA’s asset token classification), and Swiss Anti-Money Laundering Act requirements. FINMA classified BrickMark tokens as asset tokens — a category of securities — requiring the preparation and publication of issuance documents equivalent to a prospectus, and restricting initial sale to qualified or professional investors.

At the time of its completion, the Bahnhofstrasse transaction was one of the largest real estate tokenisations globally. Comparable transactions — the St. Regis Aspen hotel tokenisation in Colorado (USD 18m, 2018) and various European real estate pilots — were materially smaller in absolute terms. The CHF 130m transaction size, involving one of Zurich’s most recognisable commercial properties, demonstrated that tokenised real estate could operate at the scale of institutional investment rather than as a retail crowdfunding exercise.

Legal Structure: GmbH Equity via Asset Tokens

BrickMark’s legal structure has become a template for Swiss real estate tokenisation. The architecture works as follows:

Property ownership entity: a Swiss GmbH (Gesellschaft mit beschränkter Haftung — limited liability company) is established as the direct owner of the property. The GmbH is a simpler corporate vehicle than an AG for this purpose, as Swiss GmbH shares are not subject to the same formalities as AG shares in transfer documentation.

Equity token issuance: BrickMark Group issues tokens (on a blockchain, initially Ethereum-based) representing equity interests in the property-owning GmbH. Each token corresponds to a specified fraction of the GmbH’s equity.

Token holder rights: token holders exercise their GmbH equity rights — economic participation, limited voting on fundamental corporate decisions — through the token platform rather than through traditional GmbH governance mechanisms. Smart contracts implement distributions of rental income proportionate to token holdings; property disposal proceeds flow through the same mechanism.

FINMA asset token classification: BrickMark tokens are classified by FINMA as asset tokens — tokens that represent claims on an underlying asset or enterprise. Asset tokens are securities under Swiss financial market law, triggering:

• Prospectus / issuance document obligations (under FinSA, the Swiss Financial Services Act)
• Distribution restrictions (to qualified/professional investors in Switzerland; cross-border offering rules apply internationally)
• Secondary market requirements (trading only on regulated platforms)

Custody: BrickMark uses Taurus Group’s PROTECT infrastructure for token custody, integrating Taurus’s institutional-grade key management into the BrickMark investor experience.

The Secondary Market: Providing Liquidity for Illiquid Assets

Real estate is structurally illiquid: selling a physical property takes months, involves transaction costs of 2–5%, and requires a buyer willing to acquire the entire property. Tokenisation’s most compelling value proposition in real estate is the creation of a secondary market — a mechanism by which token holders can sell fractional interests to other investors without requiring a full property sale.

BrickMark has developed secondary market functionality for its tokens, operating under a regulatory framework that permits secondary trading of asset tokens between professional and qualified investors. The secondary market is not a public open order book — it operates as a matched-principal market with BrickMark or a designated broker intermediating between buyers and sellers.

The secondary market’s limitations reflect the structural constraints of tokenised private real estate:

Thin liquidity: BrickMark tokens are held by a relatively small population of professional investors with similar risk profiles and investment time horizons. Natural seller-buyer matching is infrequent compared to a public equity market.

Pricing complexity: private commercial real estate requires periodic formal valuations (typically annual, by RICS-accredited valuers) to establish a fair market price for secondary trading. In the absence of continuous market pricing, investors must rely on periodic appraisals.

Restricted investor pool: FINMA’s classification of BrickMark tokens as securities restricts the secondary market to professional and qualified investors, limiting the breadth of potential buyers relative to a retail real estate fund.

Despite these constraints, BrickMark has demonstrated that secondary transactions occur — token holders have transferred positions, and external investors have acquired tokens on the secondary market. The liquidity improvement relative to direct property ownership, while limited, is genuine.

Portfolio Development: Beyond Bahnhofstrasse

Since the Bahnhofstrasse transaction, BrickMark has expanded its portfolio to include additional European prime commercial real estate:

Frankfurt properties: BrickMark has acquired commercial properties in Frankfurt’s central business district, continuing its focus on prime European commercial real estate locations. Frankfurt’s position as Germany’s financial capital and the home of the European Central Bank makes it a logical target for institutional-quality tokenised real estate.

Portfolio focus: BrickMark’s acquisition strategy focuses on premium commercial real estate — retail, office, and mixed-use — in major Swiss and European cities. The emphasis on prime locations reflects both the investor demand for trophy asset exposure and the liquidity characteristics of well-located property: prime assets are easier to value, attract stronger tenant covenants, and have historically shown more resilient capital values than secondary locations.

Total assets under management in tokenised form across BrickMark’s portfolio are estimated at approximately CHF 350 million as of 2025, based on publicly available transaction disclosures and estimated portfolio additions.

The Lex Koller Constraint

Switzerland’s Lex Koller (Federal Act on the Acquisition of Real Estate by Persons Abroad) imposes restrictions on the acquisition of certain Swiss real estate by foreign investors. Residential real estate is most heavily regulated; certain commercial real estate in tourist areas is also restricted. Prime urban commercial real estate — the Bahnhofstrasse asset category — is generally exempt from Lex Koller restrictions.

For BrickMark, Lex Koller is a structuring constraint rather than a business-model obstacle: by focusing on Lex Koller-exempt commercial real estate, BrickMark can accept international investors in its token offerings without Lex Koller complications. A BrickMark strategy that extended into Swiss residential or hospitality real estate would face materially more complex Lex Koller structuring requirements.

Challenge: The Dual Expertise Requirement

The most significant operational challenge facing BrickMark — and any organisation attempting institutional real estate tokenisation — is the dual expertise requirement. Real estate investment and development requires deep property market knowledge, transaction sourcing networks, due diligence capabilities, asset management expertise, and relationship management with tenants, lenders, and advisors. Tokenised securities issuance and management requires blockchain technology, smart contract development, token legal structuring, FINMA regulatory compliance, investor KYC/AML, and secondary market operation.

These are two entirely distinct professional disciplines. Real estate investment management firms typically have no blockchain expertise; blockchain companies typically have no real estate investment management capability. BrickMark has assembled both, but maintaining dual excellence at institutional quality in both domains simultaneously is an ongoing organisational challenge.

Comparison with Stableton

Stableton Financial (Geneva) offers the contrasting approach to tokenised alternative asset access: where BrickMark tokenises direct property ownership, Stableton tokenises feeder fund interests providing access to private equity and venture capital strategies. The comparison is instructive:

BrickMark’s direct real estate model: investors hold economic interests in specific properties; income flows from rental income; capital appreciation is tied to property-specific value. Portfolio concentration is higher; the investor has direct real estate exposure.

Stableton’s tokenised fund model: investors hold interests in funds that invest across diversified PE/VC portfolios; income flows from portfolio company performance; capital appreciation is tied to private equity fund performance. Greater diversification; indirect exposure to underlying assets; fees layered at fund level and tokenisation platform level.

Both models address the same underlying problem — enabling investors to access illiquid alternative assets with lower minimum investment requirements and potential secondary market liquidity — through fundamentally different asset structures.

Infrastructure: Taurus Partnership

BrickMark’s use of Taurus Group’s PROTECT platform for token custody illustrates how Switzerland’s DLT company ecosystem operates in practice: BrickMark (issuance and real estate), Taurus (custody infrastructure), and FINMA (regulatory oversight) are distinct layers that combine to create a regulated tokenised real estate product. This layered model — where each participant focuses on its core competency within a regulated ecosystem — is the Swiss institutional DLT model applied to real estate.

Outlook: Tokenised Real Estate in Switzerland Through 2030

BrickMark is building in a market that does not yet exist at scale but has clear structural tailwinds: the demand for fractional access to prime real estate among family offices, pension funds, and sophisticated HNWI investors is large; the administrative efficiency advantages of digital share registers over paper structures are unambiguous; and the Swiss DLT Act’s Registerwertrecht concept provides a clean legal foundation for continued development.

The primary constraints on market development are secondary market liquidity and investor pool depth. Both are addressable through growth — more tokenised properties outstanding means more potential counterparties for secondary trading; more institutional adoption of digital assets means more investors eligible to participate in asset token markets.

ZUG DLT estimates that Swiss tokenised real estate outstanding will grow from approximately CHF 350–500 million in 2025 to CHF 2–4 billion by 2030 as additional platforms enter the market and existing platforms scale. BrickMark, as the Swiss benchmark in prime commercial real estate tokenisation, is well-positioned to benefit from this growth.

Published by ZUG DLT — Donovan Vanderbilt. zugdlt.com provides independent institutional intelligence on Switzerland’s distributed ledger technology ecosystem.