USPC is not a REIT, although it has some features in common. Both USPC and REITs are viable real estate investments providing dividends for their investors, a hedge against inflation, and are highly liquid.

Is USPC a reit?

When it comes to both individual and institutional investments, real estate stands out as the most critical and significant asset class in the world. According to Savills World Research, the total value of global real estate assets was USD 326.5 trillion as of the end of 2020.

That’s partly thanks to the surging growth of the REIT segment. For instance, REITs invested $85 billion in new constructions in 2020 and owned more than $4.5 trillion US assets.

However, real estate investments have historically been unstable across some economic cycles. That has led to the development of interesting new opportunities in real estate investing over the past few years, such as United States Property Coin (USPC).

USPC intends to provide investors with reliable returns, hedge against inflation, portfolio diversification, low transaction costs, and lower market entry barriers.

Keen observers found a close resemblance between USPC and REITs. The question is, are these two sides of the same coin, or are the similarities farfetched? That’s what this article seeks to explore.

What is USPC?

USPC is a security token developed to enable fractional ownership of a diversified property investment portfolio in high-demand urban markets across the US. Its developers made it in response to the instability of utility tokens and the effects of inflation on fiat currencies, dollar-backed stablecoins, and algorithmically-backed coins.

USPC incorporates cutting-edge technology with a time-tested investing strategy to lower the barrier to entry for real estate and as a means of wealth preservation. Primior, a major property development corporation based in Southern California, provides the financial backing for USPC.

Token holders will hold a stake in a broad portfolio of multifamily housing developments, healthcare institutions, and hospitality properties across the United States.

What are REITs?

A REIT refers to a corporation that invests in and manages properties to earn a return on investment. The company’s stocks are traded on a national stock exchange to facilitate open transactions and timely transmission of relevant price information.

Some of the property types REITs invest in include offices, retail complexes, residential buildings, hotels, resorts, and self-storage units.

Investors pool their money and buy shares of a trust to earn the profits or income generated by the trust’s holdings in real estate. REITs do not invest in developing real estate properties to resell but primarily intend to operate them as allotments to their investment portfolio.

Is USPC a type of REIT?

In a nutshell, no. However, USPC and REITs have similar characteristics:

1. Frictionless transfer

USPC provides a peer-to-peer (P2P) transfer of tokens between wallet holders. Investors can transfer their USPC tokens directly from one person to another without a third party acting as an intermediary (so long as both parties are qualified investors who meet the regulatory requirements outlined under Regulation D Rule 506(c) and Regulation S).

REIT investors do not own physical property. They cannot legally change ownership of any property, but they can sell their shares in those properties whenever they choose.

2. Hedge against inflation

The consumer price index (CPI) was 7.7% in October 2022, the highest since 1982, a major headache for real estate investors.

Thankfully, USPC has no link to the dollar, which can’t unshackle itself from the effects of inflation. USPC has its backing in the US urban real estate, which has a long history of appreciating in value.

3. Property fractionalization

The initial investment, marketing, and upkeep costs associated with real estate development are vast and beyond the financial means of most people.

USPC and REITs provide property fractionalization, where investors own a piece of real estate. That allows more people to get into real estate because of the low barrier of entry. Moreover, they are more convenient than outright property ownership for investors looking to diversify their portfolios.

4. High liquidity

Unlike traditionally illiquid real estate investments, it is easier to convert REITs and USPC units to quick cash. You will be able to trade USPC on a token exchange (with some restrictions), while REITs trading happens on legacy exchanges.

Many REITs are highly liquid as their listings are on major stock exchanges and trade at high volumes. USPC, on the other hand, provides investors with easy access to the property market that operates 24/7 and without the constraints of the local stock market.

5. Yield

The IRS requires REITs to distribute at least 90% of their taxable revenue as dividends to shareholders. That happens periodically, typically quarterly or semi-annually, bringing in passive income for the investors with tax advantages.

With USPC, investors receive distributions with earnings calculated during the holding period. However, the company has no tax obligation to provide its profits to its shareholders, and can instead use the funds to reinvest into more property – potentially compounding returns and increasing the book value of USPC.

REITs vs. Tokenized Real Estate (Security Tokens)

As you can see, there are similarities as well as differences between REITs and tokenized real estate investments. It is important to understand both investment vehicles in order to choose the one that best suits your needs. Ultimately, the decision will depend on what kind of return you’re aiming for and how much risk you are willing to take on.

But, when it comes to which option is a better investment opportunity, we believe that tokenized real estate security tokens like USPC have significant advantages, including:

  1. 24/7 trading on the Ethereum mainnet, allowing for greater liquidity and an easier access to the underlying U.S. real estate globally;
  2. Lower fees and commissions than REITs or other traditional investments;
  3. Decentralized fractional ownership of real estate vs. centralization that comes with REITs;
  4. The ability to transfer tokens peer to peer.

Of course, we always encourage investors to seek their own financial advice before consider investing in any type of security, and the above statements reflect our opinions only.

USPC provides a more secure and convenient alternative to traditional real estate investment using Web3 technology, allowing more people to get a piece of the lucrative and booming United States property market on a global scale. With USPC, you have the chance to profit from one of the most stable investments – real estate – with a lower barrier to entry and a more accessible way to invest in U.S. real estate internationally.

Final word

USPC is not a REIT, although it has some features in common. Both USPC and REITs are viable real estate investments providing dividends for their investors, a hedge against inflation, and are highly liquid. However, there are definitely differences between the two products and this article provides a helpful overview to help you decide which one is right for you.

We hope that this article has been informative and assists in making an informed decision by understanding the differences between USPC and REITs.

Necessary Disclosures
Informational Purposes for Discussion Only

This general analysis is for general informational purposes only and does not constitute a prospectus, an offer document, an offer of securities, a solicitation for investment, or any offer to sell any product, item, or asset (whether digital or otherwise). The information set out in this general analysis is for community discussion only and is not legally binding.

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USPC and its affiliated persons and their respective shareholders, members, officers, directors, managers, employees, counsel, advisors, consultants, and agents (“Representatives”) reserve the right, in their sole and absolute discretion with or without notice, to alter any and all of the information of this general analysis.

You acknowledge that: (1) the information contained in this general analysis is subject to change without notice, and no one shall assume from the lack of any updates to this general analysis that the contents of this general analysis have not changed since the date of this general analysis; (2) this general analysis could become outdated due to changing circumstances; and (3) USPC or any of its Representatives does not hereby obligate itself in any manner to periodically or otherwise to update the information in this general analysis or to maintain the availability of any information in this general analysis.

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Nothing in this general analysis constitutes business, finance, legal, or tax advice. You agree to consult professional advisers before engaging in any activity related to the information provided in this general analysis.

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This general analysis does not constitute an offer of securities, a prospectus, an offer document, or solicitation for an investment of any kind. Information contained in this general analysis is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

You acknowledge that: (1) this general analysis and the information shown herein is not an offering of any securities nor a solicitation of an offer to buy any securities and (2) this general analysis and the information herein shall not be construed as any description of the business of USPC or any of its Representatives in conjunction with any offering of securities.

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This general analysis does not constitute or imply a contract or an offer to enter into a contract. This general analysis is provided solely for informational purposes only and does not constitute any binding commitment by USPC or any of its Representatives. No person is bound to enter into any contract or binding legal commitment in relation to anything in this general analysis.

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Neither USPC or nor any of its Representatives shall be held liable for any use of or reliance on the information described and/or contained on this general analysis. USPC and its Representatives do not and do not purport to make, and hereby disclaims, all representations, warranties or undertaking to any entity or person (including without limitation warranties as to the accuracy, completeness, timeliness, or reliability of the contents of this general analysis, or any other materials published by USPC or its Representatives). To the maximum extent permitted by law, USPC and its Representatives shall not be liable for any indirect, indirect, special, exemplary, incidental, consequential, or other damages or losses of any kind, however caused and on any theory of liability, whether in contract, strict liability, or tort (including, without limitation, any liability arising from default or gross negligence on the part of any of them, or any loss of revenue, income or profits, and loss of use or data) arising in any way from the reading of this general analysis, including but not limited to the reliance upon or the use of the general analysis (including, without limitation, inaccurate information, errors, omissions, outdated data, etc.) or otherwise arising in connection with the same.

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Any historical information or information based on past performance included herein is for informational purposes only and has inherent limitations and is not intended to be a representation, warranty, or guarantee of future performance. Projected performance data shown constitutes “forward-looking information” which is based on numerous assumptions and is speculative in nature. Actual results may vary significantly from the values and rates of return projected herein.

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You will have the sole responsibility for verifying the accuracy of all information furnished in this general analysis. There shall be no recourse against USPC and its Representatives in the event of any errors or omissions in the information furnished, the methodology used, the calculations of values or conclusions.

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USPC or its Representatives does not imply any affiliation with, or endorsement by, any third party. Such references in this general analysis are for illustrative purposes only.

Regulatory Approval

No regulatory authority has examined or approved, whether formally or informally, of any of the information set out in this general analysis. No such action or assurance has been or will be taken under the laws, regulatory requirements, or rules of any jurisdiction.

Legal Compliance

You will and shall at your own expense ensure compliance with all laws, regulatory requirements and restrictions applicable to you.

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USPC Now Live On DigiFinex!

We’re excited to announce that USPC is now live on the DigiFinex exchange. This is an important milestone for USPC as it marks our first listing on any crypto exchange. This also represents a major victory for tokenized real estate, as it demonstrates the potential for decentralized real estate investing!

Join The Waitlist

USPC is slated to launch in late March, 2023, and we’re currently building our waiting list for early supporters who want to get in on the action.

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