A deep dive into GreatX

GreatX is developing a first-of-its-kind platform that seeks to provide consistent cash flow with increasing yield targets each year as well as uncommon capital protection through the use of US Treasuries. 

We talked with Managing Member, Lakshmi Narayanan, about this unique offering on Republic.

Why did you launch the GreatX model using hotel real estate?

Lakshmi Narayanan: We chose hotel real estate for several key reasons. 

The first is higher cash flow generation. Hotels can generate higher yields compared to other real estate asset classes. There’s also a higher appreciation value, especially when it comes to commercial real estate with brand associations, such as Marriott and Hilton. Global hotel brands offer prestige and worldwide appeal.

In my opinion, hotels provide a better internal rate of return (IRR) in a shorter period, often within three to five years, as well as a favorable long-term return.  

Another big reason is transparency. Hotel performance data is easily accessible through travel websites and ratings. Plus, STR reports [an industry benchmarking tool] provide detailed performance metrics for hotels.

Finally, it’s easy to educate audiences about this asset. The concept of a hotel is universally understood, making it easier to explain to a global audience compared to other real estate asset classes with varying terminology across regions.

What led you to focus on US asset types versus other hotels around the world?

Lakshmi: The US offers a stable economy and geography, and the US Dollar is the largest reserve currency in the world. This makes America a highly desirable investment destination, as it’s home to major stock exchanges and liquidity trends.

There are also simple numbers. In 2024, the US hotel industry sold nearly 1.3B room nights in 64k+ hotels with 5.7M guest rooms. This activity supported approximately 9.2M jobs and contributed $894.1B to the GDP. Sales topped $352B for the year.

In general, US assets provide stability in terms of revenue, currency, and geographical location. There’s a high reward with comparatively less risk compared to other countries.

So while we have plans to include assets from other countries in the future, the initial focus on US assets provides a solid foundation for our model.

The income yield, with fixed, preferred returns, is scheduled to go up 6 full percentage points each year. How does that work?

Lakshmi: Our model provides three key benefits: consistent cash flow, capital protection, and uncapped upside potential.

The target yield is laddered over time, projected to start at 6% in Y1 and with the goal of increasing by 6 percentage points each year, with the business plan to eventually reach 42% by Y7.

67% of the raised capital is initially invested in US Treasury bonds for protection, while 33% goes to working capital and go-to-market strategy.

An acknowledged risk is a potential delay in the token launch, which is currently targeted for Q3 2025. Even with delays, the principal protection and returns remain intact.

The model is designed to provide the projected returns even if the platform performs at only 20% of the projected value.

What do you consider the venture-like elements of this? The platform? The hotel assets? 

Lakshmi: The venture-like elements are composed of four key components: real assets, our platform, a unique product structure, and diverse revenue models. 

The physical hotel real estate is the asset. Our platform provides customer lifetime value and user stickiness. Our product structure offers a novel approach in the tokenization world. Finally, we derive revenue from token-as-a-service, platform-as-a-service, and white-labeling solutions, where we build the technological and token infrastructures for other real estate organizations to feature their properties. They have access to our GreatX token, which becomes the primary token for all these platforms.

What do treasury bonds as capital protection mean for investors in practical terms? How do I get my money out if I decide this isn't for me?

Lakshmi: 67% of the total investment is backed by US Treasury bonds beginning on day one. Then, the Treasury-backed portion increases yearly, with a goal to reach 90% coverage by Y3 and 100% coverage by Y4. 

There is an initial hard lock-in period of 12 months. After that, investors can exit 12.5% of their investment value quarterly with prior notice through an embedded put option feature. That means by the end of Y3, investors can potentially recover their full principal.

Our structure provides investors with a measure of capital protection and flexibility to exit after the initial lock-in period.

What are your plans for extending the platform beyond hotel investments to other property types?

Lakshmi: While phase one starts with hotel assets, we plan on expanding into multifamily, single-family, student housing, and other real-world assets. 

We will also white-label our platform. Instead of building one from scratch, we provide the platform, technology, and know-how to companies involved with real estate assets. They gain access to all the technological tools they need, yet no matter who we white label to, we use GreatX tokens, which provide consistent long-term income for our shareholders.

Will shareholders have the opportunity to buy great X tokens once they’re available?

Lakshmi: American investors generally cannot buy security tokens due to regulations. However, as shareholders of the parent company, they are considered internal users, not external entities. 

This means they must complete KYC (Know Your Customer) procedures and fulfill all regulatory compliances. If American shareholders meet all requirements, they will be eligible to subscribe for GreatX tokens within the regulatory framework.

How many properties do you expect to have available for investment when you go live in Q3 2025?

Lakshmi: The target for phase one is properties worth $60-$100 million in assets. From there, we plan on scaling every quarter, reaching $1 billion worth of assets within 4-6 quarters.

The gradual scaling approach is to understand consumer preferences. All properties will be newly procured, ensuring transparency through third-party valuations.