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The Protocol Newsletter Issuer Spotlight: Liberty Fund

Read the latest edition of the Protocol Newsletter featuring Michael Flight, Principal and CEO of Liberty Real Estate Fund. Michael is a real estate entrepreneur and Security Token evangelist who is an expert in Shopping Centers and Net Lease commercial real estate investment and real estate on the blockchain.


1. Please tell us a little bit about Liberty Real Estate Fund and what you do.

Liberty Real Estate Fund is the World’s First Single-Tenant Net-Lease Security Token.

Liberty Real Estate Fund acquires brand name, Single-Tenant Net-Leased (NNN) real estate assets that include auto service (Firestone), convenience stores (7-11), mobile phone providers (AT&T, Verizon), medical service (DaVita Dialysis), supermarkets (Aldi), and essential business retail properties (Dollar Tree, CVS) operating in high growth markets throughout the United States. The Liberty portfolio is designed for investors to achieve: Geographic Diversification; Industry Diversification; Credit Tenant financial security and consists of hard assets that have intrinsic value. These Net Lease properties have long-term contractual rents backed by some of the world’s largest and best brand name, exceptionally well-capitalized companies.

Utilizing a security token Liberty is able to provide investors with more than 30 years of institutional real estate experience to invest in Net Lease properties that deliver stable, diversified, tax-efficient returns combined with blockchain technology to create access, liquidity, and new investment optionality.

Liberty Real Estate Fund I, LP is an SEC 506 (C) Regulation D investment available to US Accredited Investors and Regulation S available for non-US investors.

2. How did you first get interested in real estate?

I went to a “How to buy property with no money down” seminar in 1985, bought the guy’s book but was not able to buy any real estate without a job. But I was hooked on real estate investing because it is the greatest wealth generator in the history of the world. From there I went on to become a commercial real estate broker, worked for a large shopping center private equity firm, and then co-founded our business in 1990.

3. What is a net lease property and what makes them special?

Net Lease properties (also known as Triple Net or NNN) are some of the most stable, secure real estate investments you can make. A Net Lease is a contractual agreement where a tenant signs a long-term lease to pay not only monthly rent but also pay all the expenses of the property.

In essence, an investor gets “Nothing but Net Income” all the expenses such as real estate taxes, insurance, utilities and even maintaining the building are “Netted out” so you get paid monthly income with no surprise expenses. We like to describe the properties as “Corporate bonds wrapped in real estate”.

4. What changes have you seen in technology and asset servicing in the real estate fund industry over your career?

So many things have changed. To make me look really old, I was describing carbon paper and typewriters to one of our 23-year-old interns today.

My first computer in 1988 was a Compaq 286 that cost $4,500 and you needed to load MS-DOS to boot it at the start.

We were using an IBM mainframe for “computerized” property management. Now it is cloud-based SaaS.

I would say the internet revolutionized communications. My first mobile phone was a car phone literally installed in the trunk of the car. We had to pay for “long-distance” phone service. Now with WhatsApp, Telegram, Zoom, and Skype, we have an international team that works for us.

You had to know how to use a map for business travel. Now you can research properties on multiple commercial listing services, drive the market with Google Street View, get demographic trends and even tour the property with a drone.

The most important thing I see coming is that blockchain will be changing finance the same way the internet changed communications. With blockchain, DLT and smart contracts finance will be truly international, 24/7 along with being more transparent to prevent fraud and bad actors.

5. Describe your first introduction to blockchain technology and the moment you understood its implications for the real estate industry.

My first introduction to blockchain was from very smart guys in 2014 talking about Bitcoin. I did not really understand the implications of blockchain because I only conceived it as a new software. Then during the ICO craze of 2017, I started speaking with my blockchain/crypto adopter friends and asked “Why not tie the value to a hard asset, like gold or real estate?” Better yet, why not tie a Coin to a portfolio of Net Lease properties; some of the most stable, conservative, income-producing, tangible assets available. Furthermore, specifically design that portfolio to be diversified geographically, by industry and with many financially strong brand name tenants. I wanted to create “Crypto with Cash Flow”.

6. What other factors do you think have helped the real estate industry become one of the early adopters of digital securities (security tokens)?

Real estate holds most of the world’s wealth and economic stability. It is at the center of every economy from sleeping, energy production, agriculture, transportation, trading, and more.

Forward thinkers in real estate investment see that the asset class holds the most promise for Security Tokens to open up more than $280 trillion of currently locked-up value. In addition, real estate investment sponsors will now be able to access a worldwide investor base, potential for investor liquidity, and the ability to tokenize and fractionalize large, high-quality, cash-flowing real estate access.

7. What specific aspects of digital securities make you believe that they are a great fit for Liberty Real Estate Fund?

We wanted to make institutional-grade management coupled with high-quality US commercial real estate assets available to investors worldwide. Investors get access to a diversified portfolio of properties for a fraction of what would be required to acquire just one of our properties.

Additionally, digital securities provide extra options for our investors by improving the benefits of private real estate investments. In the past, investors have been locked into long-term capital commitments. Security Tokens will allow them enhanced liquidity through peer-to-peer, ATS and 24/7 trading on exchanges.

One of the coolest options, which no one is discussing, is the portability of investor income distributions. Investors can be paid monthly income anywhere they are in the world. And if they take their distributions in a USDC or other stablecoin, that money is now in the digital financial system and not tied to any particular location or country.

Now with the advent of DeFi, individuals will be able to collateralize their digital assets by either lending them or borrowing against them. It creates even more options for liquidity and financial flexibility.

8. How do you see digital securities influencing the future of the real estate industry?

In the last 30 years, billions of people have risen from poverty into the middle class. With digital securities, security tokens, and tokenization of assets, those people and more following them will be able to invest in high-quality real estate investments from anywhere in the world.

I can see an engineer in Kenya, a teacher in Thailand, an architect in Peru, and a farmer on his tractor in the middle of Iowa all using their mobile phone to invest $10 to 10,000 Ƀ (name your preferred currency) in high-quality real estate. Digital securities allow people to invest from anywhere in the world in assets all over the globe.

Real estate is the world’s most proven asset class for generating wealth and raising living standards. Unlocking that wealth with digital securities will establish new opportunities for financial inclusion and producing passive income.

About Liberty Real Estate Fund

Liberty Real Estate Fund is the World’s First Single-Tenant Net-Lease Security Token, using more than 30 years of institutional real estate experience to invest in Net Lease properties that deliver stable, diversified, tax-efficient returns combined with blockchain technology to create access, liquidity, and new investment optionality.

Liberty Real Estate Fund acquires brand name, Single-Tenant Net-Leased (NNN) real estate assets that include auto service (Firestone), convenience stores (7-11), mobile phone providers (AT&T, Verizon), medical service (DaVita Dialysis), supermarkets (Aldi), and essential business retail properties (Dollar Tree, CVS) operating in high growth markets throughout the United States. The Liberty portfolio is designed for investors to achieve: Geographic Diversification; Industry Diversification; Credit Tenant financial security and consists of hard assets that have intrinsic value. These Net Lease properties have long-term contractual rents backed by some of the world’s largest and best brand name, exceptionally well-capitalized companies. The assets can be described as “Corporate bonds wrapped in real estate”.

For more info, please visit: www.libertyfund.io

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