Real estate investor Grant Cardone is positioning his firm to compete with traditional REITs by integrating Bitcoin directly into large-scale property deals.
Grant Cardone is building an alternative to the traditional real estate investment trust by pairing discounted multifamily properties with Bitcoin holdings inside dedicated LLCs. The strategy targets returns of 22 to 32 percent, well above the yield profiles of established REITs like Camden and AvalonBay.
Cardone Capital manages $5 billion in real estate assets across 15,000 multifamily units. Over the last 17 months, the firm has accumulated approximately $1 billion in real estate and roughly 2,000 Bitcoin. Six additional deals are currently in contract.
The model exploits a regulatory constraint embedded in U.S. law since 1960. Traditional REITs must distribute at least 90 percent of taxable income as dividends and cannot hold Bitcoin on their balance sheets due to rules designed around real estate assets. “Can never ever hold Bitcoin on their balance sheet,” Cardone said of legacy REITs.
Cardone Capital’s flagship deal illustrates the structure. The firm purchased a 366-unit multifamily property in Boca Raton for $235 million in cash from a Blackstone-related lender. The property carries a $400 million replacement cost valuation and is expected to generate 4 percent annual returns from operations. Cardone allocated $100 million in Bitcoin to the deal, creating a total investment vehicle valued at $335 million. The structure generated a $50 million tax write-off.
Approximately 80 percent of investors in the Boca fund had zero prior Bitcoin exposure, reflecting Cardone’s stated goal of “onboarding people into Bitcoin that have had zero exposure.” Cardone received 115 Bitcoin as payment for a speaking engagement in Las Vegas, which he continues to hold.
“We believe by combining real estate and Bitcoin and having time, I’ll end up with somewhere between a 22 and a 32 percent return on an asset class that has been boring, consistent, and ancient,” Cardone said.
The REIT sector controls $4.3 to $4.5 trillion in U.S. real estate assets. Cardone Capital has completed road shows with banks but prefers direct-to-consumer raises leveraging his 20 million reported online followers. The firm currently has 20,000 investors.
The hybrid structure does not tokenize real estate on blockchain. Instead, it pairs cash-flow-positive properties with Bitcoin inside LLCs, allowing the vehicle to hold both asset classes without triggering REIT distribution requirements or regulatory restrictions on cryptocurrency holdings.
Commercial real estate typically operates on a 7 to 10 year refinancing cycle. Cardone has not disclosed the legal structure or regulatory status of the hybrid vehicles, the specific banks involved in road shows, or the timeline for any potential public listing of the strategy.
