When someone in Colombia hears about "fractional real estate investment," they often think it is a new trend, perhaps imported from Silicon Valley or the blockchain era. The reality is different: the idea that multiple people can own the same real estate asset has more than 65 years of history, government backing, solid regulation, and a global market worth over two trillion dollars. This article tells that story from the beginning.
The Origin: United States, 1960
On September 14, 1960, President Dwight D. Eisenhower signed the law that created Real Estate Investment Trusts, better known as REITs. Congress's intention was explicit:
"To give all investors, especially small ones, access to the income-producing real estate market, in the same way they access other asset classes." — NAREIT
Before REITs, investing in real estate required enough capital to buy an entire property. The fractional model came to solve exactly that: allowing people with less capital to participate in assets that were otherwise out of reach.
In plain words: a REIT is a fund that buys properties and trades on an exchange like a stock: you buy a stake and the rental income is distributed to you. Example: instead of buying a whole apartment, you buy a stake in a fund that owns 300 apartments, and you can sell it whenever you like, the way you would sell a share.
The first REIT in history was American Realty Trust, founded by Thomas J. Broyhill in 1961. In the first two years of the law, 19 public REIT offerings took place, with sizes ranging between 10 and 50 million dollars. That same year NAREIT was born, the association that today is the leading source of data and research on the sector worldwide.
The core idea was simple but powerful: democratize access to the real estate market without each investor needing to buy an entire building.
The Global Expansion: From One Country to More Than 40
What began in the United States took a little more than a decade to cross borders.
Australia (1971) was the second country in the world to adopt the model, with the creation of the first exchange-listed property trusts. Today it is home to Goodman Group, the largest REIT outside the United States, with a market capitalization of approximately 40 billion dollars.
In plain words: market capitalization is what the whole company is worth if you multiply its shares by the price of each one. Example: a company with 1 billion shares at $40 each has a $40 billion market cap — that is not money in its bank account, it is what the market believes it is worth.
The Netherlands was the first European country to establish REIT legislation, paving the way for the continent.
Canada (1993) adopted the structure 33 years after its creation in the U.S., consolidating the model in North America.
Japan (2001) brought REITs to Asia. J-REITs began trading on the Tokyo Stock Exchange in December of that year, making Japan the pioneer of the model in the most populated region on the planet.
The United Kingdom and Germany (2007) formalized their regulatory frameworks in the same year, consolidating Europe as a mature market for collective real estate investment.
Today, according to NAREIT, more than 40 countries have adopted some version of the REIT model or of fractional real estate investment. It is not an emerging trend — it is a global financial structure with more than six decades of history and regulatory validation on every continent.
The Modernization: From Paper to Digital Platform (2000-2016)
The arrival of the internet transformed the model without changing its fundamental principle. What once required stockbrokers, physical paperwork, and accounts with institutional brokers became accessible from any device.
Platforms like Fundrise in the United States began to digitize the collective real estate investment process, removing intermediaries and lowering minimum entry amounts. For the first time, it was possible to invest in diversified real estate portfolios from amounts that were previously unthinkable for the retail market.
In 2012, the JOBS Act in the United States legalized investment crowdfunding, opening the regulatory door for digital platforms to raise capital from individual investors for real estate projects. Without that law, much of the digital fractional investment ecosystem that exists today would not have been possible.
In plain words: crowdfunding is pooling money from many people to finance a single project. Example: 2,000 people put in $500 each and together they raise the $1 million that one large investor would previously have had to provide alone.
The Tokenization Era: 2017 Onward
The next leap came with blockchain. In 2018, the first tokenization of a real estate property in Manhattan was executed — 12 luxury condominiums at 436 & 442 East 13th Street, East Village, valued at 30 million dollars, tokenized on the public Ethereum network by Propellr LLC and Fluidity. The principle was the same as that of the 1960 REITs: multiple people as owners of the same asset. The difference: the technology that made it possible.
In 2018, Elevated Returns tokenized the St. Regis Aspen Resort Hotel in Colorado, raising 18 million dollars through digital tokens. For the first time, an institutional-grade luxury asset was fractionalized for individual investors using smart contracts on blockchain.
In plain words: a blockchain is a digital ledger copied across thousands of computers that nobody can edit alone, and a smart contract is a program that executes itself once the agreed conditions are met. Example: the contract can split the rent among 500 owners automatically on the 5th of every month, with nobody signing anything.
In 2020, Spencer Rascoff — co-founder of Zillow — launched Pacaso, a platform that allows multiple people to co-own high-value second homes. Pacaso became a unicorn (valuation above one billion dollars) in just 5 months — the fastest in U.S. history. The fractional model proved that it worked even in luxury segments.
In 2021, Arrived Homes — backed among others by Jeff Bezos — launched its platform for investing in individual properties from 100 dollars. When one of the most recognized entrepreneurs in the world bets on the fractional model at low minimums, the market takes it as a signal of global validation.
By 2024, the tokenized real estate market was estimated at less than 300 billion dollars worldwide. And according to projections from the Deloitte Center for Financial Services, published in April 2025, that figure could reach 4 trillion dollars by 2035 — with a compound annual growth of 27%.
In plain words: compound growth means growing by a percentage of what already grew last year, not of the starting point. Example: $100 growing 27% a year does not reach $370 in ten years, it passes $1,000 — because each year the percentage applies to a bigger number.
The Strongest Countries Today
🇺🇸 United States — the dominant market
Unmatched. American REITs manage more than 4.5 trillion dollars in gross real estate assets, with 2.5 trillion in public REITs and a market capitalization exceeding 1.4 trillion dollars. They represent more than 58% of the global REIT market. They are also the origin of the largest digital fractional investment platforms in the world: Fundrise, Arrived Homes, Roofstock, CrowdStreet, and Pacaso.
Source: NAREIT — REITs by the Numbers
🇦🇺 Australia — the Pacific giant
Australia was the second country in the world to adopt the model and today is home to the largest REIT outside the United States. Goodman Group, headquartered in Sydney, has a market capitalization of approximately 40-41 billion dollars. The Australian market is characterized by its sophistication and its integration with Asian investment flows.
Source: Brevitas — Largest REITs by Market Cap
🇯🇵 Japan — the Asian pioneer
Japan was the first country in Asia to adopt REITs (2001) and remains the region's largest market by historical capitalization. J-REITs trade on the Tokyo Stock Exchange and offer average yields of 5.4%, making them a well-established asset class for Japanese institutional and retail investors.
Source: Cushman & Wakefield — Asia REIT Market Insight 2024-2025
🇸🇬 Singapore — Asia's financial hub
Singapore is Asia's second-largest REIT market and one of the most sophisticated in the world. Its REITs offer the most competitive dividend yields in the region (6.9% on average), which attracts institutional capital from around the world. The Singaporean model is a reference for emerging markets looking to develop their own collective real estate investment structure.
Source: Cushman & Wakefield — Asia REIT Market Insight 2024-2025
🇨🇳 China — the fastest-growing market
C-REITs (REITs in mainland China) grew 85% in market value during 2024, positioning themselves for the first time among the three largest REIT markets in Asia. It is the sector's most accelerated growth story in recent years, driven by the Chinese government's regulatory reforms to modernize its real estate capital market.
Source: Cushman & Wakefield — Asia REIT Market Insight 2024-2025
🇬🇧 United Kingdom and Europe — regulatory maturity
The United Kingdom introduced REITs in 2007 and today has a mature market integrated with European capital flows. The Netherlands was the first European country to adopt the model, and Germany followed also in 2007. Europe as a whole represents a relevant market, although more fragmented than the U.S. or Asia.
Source: PwC — Worldwide REIT Regimes
Latin America: a region under construction
Latin America has the fastest proportionally growing real estate market in the world at this stage. The regional real estate investment market reached 731.7 billion dollars in 2025 and is projected to reach 1.29 trillion by 2034, with a compound annual growth of 6.33%.
Brazil leads the region with 40.85% of the Latin American residential market, driven by the Minha Casa, Minha Vida program and strong institutional co-investment. It also has FIIs (Fundos de Investimento Imobiliário) — its local version of REITs — as a consolidated asset class.
Mexico projects to attract real estate investments of more than 32 billion dollars in 2025, with sustained growth of 15% per year.
Colombia is projected to grow at 6.92% per year through 2031, driven by accelerated urbanization, the digitalization of the real estate market, and the adoption of proptech models. In 2024, 92% of Colombians began their home search online — a clear signal that the Colombian buyer is already ready to operate in digital environments.
Sources: IMARC Group — Latin America Real Estate Investment Market · Mordor Intelligence — Latin America Residential Real Estate
Colombia: the legal framework that makes it possible here
Colombia has legal instruments that allow fractional real estate investment to be structured transparently and with regulatory backing. The SPV (Special Purpose Vehicle) model — in which each project operates as an independent legal entity and participants are linked as shareholders through share subscription agreements — offers real asset separation and contractual clarity for the investor.
In plain words: an SPV, or special purpose vehicle, is a company created to own one single project and nothing else. Example: if building A and building B sit in two separate companies, a legal problem at building A cannot drag down your investment in B.
There is no need to wait for the legal framework to mature. It already exists. What is being born is mass adoption.
What's Next: the fractional model as a global standard
The history of real estate fractionalization is the history of financial democratization. What began as a law signed by Eisenhower in 1960 so that small investors could access the U.S. real estate market is today a global model with more than 40 countries on board, two trillion dollars in capitalization, and projections that take it to four trillion by 2035.
The model is not new. What is new is that it is finally reaching Colombia with the technology, the regulation, and the ecosystem to do it well.
Main Sources
- NAREIT — The History of REITs
- NAREIT — REITs by the Numbers
- NAREIT — Global Real Estate Investment
- Cushman & Wakefield — Asia REIT Market Insight 2024-2025
- PwC — Worldwide REIT Regimes
- Deloitte Center for Financial Services — Tokenized Real Estate (April 2025)
- CoinDesk — Global Tokenized Real Estate Market Could Reach $4T by 2035, Deloitte Forecasts
- S&P Global — $30M condo becomes 1st blockchain tokenized property in Manhattan
- CryptoSlate — St. Regis Aspen Resort Raises $18 Million via Security Token Offering
- IMARC Group — Latin America Real Estate Investment Market
- Mordor Intelligence — Colombia Residential Real Estate CAGR
- Pacaso Press Release — Unicorn Valuation March 2021
- Brevitas — Largest REITs by Market Cap
- Wikipedia — Australian REIT History
Published by
Jonathan Moncada