A real estate trust is a trust whose assets are a plot of land, a building or the money to build it. A trustee manages it for a specific project and investors receive completed units, rents or a share of the sale. In Argentina the at-cost trust prevails; in Mexico, the trust with a trustee bank.
How it works
The basic structure has four pieces. The landowner contributes it to the trust in exchange for units or a price. Investors join the contract and contribute money according to a payment plan. A developer manages the construction. And the trustee, which in Argentina can be the developer itself or an independent company, manages the funds, pays the construction company according to progress and, at the end, deeds the units in favor of each investor.
For the developer, the advantage is financing with future buyers instead of a bank and isolating each project in its own assets. For the investor, their money is not mixed with other projects or with the developer's debts.
At cost or investment: the two variants
| Aspect | At-cost trust | Investment trust |
|---|---|---|
| What the investor receives | A completed unit | Rents or a share of the sale proceeds |
| Price | Open: you pay what it actually costs to build | Defined contribution; the return depends on the project |
| Adjustment | Installments updated by a construction cost index, in Argentina the one from the Argentine Chamber of Construction | No additional installments, unless the contract provides for extra contributions |
| Main risk | Cost overruns and delays | That the sale or rent falls below the plan |
| Typical profile | End buyer looking for off-plan price | Investor who does not want the unit |
In Mexico the most widespread scheme is the development trust with a bank as trustee, because there only authorized institutions can act in that role. For large-scale rental income there are FIBRAs, real estate investment trusts listed on the stock exchange. And there is a country-specific use: the restricted zone trust, which allows foreigners to use and benefit from housing in the 100-kilometer strip from the borders and 50 kilometers from the beaches, where they cannot be direct owners, with permission from the Ministry of Foreign Affairs.
Risks worth reviewing before structuring
- Cost overruns. In the at-cost model, the final price is not guaranteed. With high inflation, installments can exceed the planned amount by a wide margin.
- Default by other contributors. If some investors stop paying, construction stalls for everyone.
- Conflict of roles. When the developer is also the trustee, it controls the funds it should oversee. An independent trustee costs more, but reduces that risk.
- Insufficient assets. In Argentina, if the assets are not enough to pay the trust's debts, there is no bankruptcy: a judge liquidates the estate using rules taken from insolvency proceedings. The investor collects whatever is left.
- Zero liquidity. Transferring the position in a private trust requires finding a buyer and, normally, the trustee's consent.
The tokenized version: interests as tokens
Tokenizing a real estate trust consists of representing each interest as a token. The investor does not buy square meters: they buy rights over the trust assets, whether rents, a share of the sale, or the award of a unit. The promise is to lower the minimum ticket and facilitate transfer. The legal limits are concrete.
In Argentina, the CNV's tokenization regime allows participation certificates of financial trusts with public offering, in a sandbox that RG 1150/2026 extended until December 31, 2027. The important nuance: we are talking about financial trusts, with an authorized trustee and under CNV supervision. An ordinary at-cost trust that issues tokens and offers them to the public runs the risk of making an unauthorized public offering. One of the first cases under the regime was a financial trust over agricultural fields, placed in December 2025 and managed by a registered financial trustee company. The full process is in the guide to asset tokenization in Argentina.
In Mexico there is no regime that recognizes tokenized securities. The real estate crowdfunding platforms under the Ley Fintech exist, but they do not issue securities on blockchain, and trust rights offered to the public may be subject to the Ley del Mercado de Valores. In practice, the token is a contractual layer over trust rights, suitable for private circles and with case-by-case legal analysis, as detailed in the guide to asset tokenization in Mexico.
In both countries the token does not change the nature of the business: there is still construction, cost risk, and dependence on the trustee. What changes is how the interest is recorded and transferred.
If the investors are in Europe
When the goal is to raise funds in euros, the European structure does not use a trust. A Spanish special purpose vehicle owns the project or finances it, issues shares or bonds, and registers them in an ERIR under Ley 6/2023. It is the route developed in the guide to tokenization for real estate developers, and it makes sense for medium-sized amounts with European investors. For a building sold to local buyers, the trust remains the natural tool.
Frequently asked questions
What is an at-cost trust?
It is a real estate trust in which investors finance the construction by paying its real cost, without a fixed price. They contribute installments according to progress, normally adjusted by a construction cost index, and at the end they receive their unit. It is widely used in Argentina because it allows buying at off-plan price, in exchange for assuming cost overruns and delays.
What happens if the real estate trust cannot finish the construction?
First, what the contract provides applies, normally additional contributions from the trustors. If even then the assets are not enough, in Argentina the trust does not go bankrupt: a judge orders its liquidation following, where relevant, the rules of insolvency and bankruptcy. Creditors and investors collect from what remains of the trust assets.
Can the interests in a real estate trust be tokenized?
Yes, with limits. In Argentina the CNV allows it for financial trusts with public offering within its tokenization regime. An ordinary trust that offers tokens to the public may constitute an unauthorized public offering. In Mexico there is no specific regime, and the token works as a contractual layer over trust rights.
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This content is informative and educational. It does not constitute legal, tax, or investment advice. Check the current version of each regulation in the BOE and on EUR-Lex.
HokenFi is a software and infrastructure provider; it does not provide regulated services (CASP, ESI, EAF, or ERIR). This article is informative and does not constitute financial or legal advice.
