Real estate digital securities backed by hotels (security tokens, hereafter “ST”) are starting to look very different from one deal to the next. A 399-room hotel deal in Yokohama offered in August 2026 was priced at ¥500,000 per unit with an expected average distribution yield of 4.1% per year, and it was structured as an all-equity vehicle that uses no bank borrowing at all. Yet other hotel-backed deals carry forecast distribution rates of 2.5% and of 5.6%.

The asset class is the same, and so is the pitch that individuals can buy in from a few hundred thousand yen per unit. So why do distribution rates vary by more than a factor of two? This article lines up the publicly disclosed hotel-backed ST deals and breaks them down along two axes: capital structure (loan-to-value) and acquisition price per room. Finally, we compare them with the acquisition price per room of the 300 domestic properties held by Japan’s seven listed hotel REITs, to see which price bands of hotel assets STs are actually channeling to individual investors.

Five Disclosed Deals Side by Side — ¥100,000 to ¥1 Million per Unit, 2.5–5.6% Distribution Rates

First, we list the ST deals that are backed by hotels and were publicly offered in a form ordinary individuals could apply for. The platforms differ, but all use a beneficiary-certificate-issuing trust structure, with beneficial interests managed on a blockchain platform.

The spread is not small. The lowest, W OSAKA at 2.5%, and the highest, Maihama-2 at 5.6%, differ by a factor of 2.2. The minimum investment per unit also varies tenfold, from ¥100,000 to ¥1 million, so the early generalization that “an ST means ¥100,000 per unit” no longer holds.

The counterintuitive part is that the Yokohama deal, with no borrowing at all, targets 4.1% a year, which beats both the leveraged Kyoto deal (3.5%) and the W OSAKA deal (2.5%). In textbook terms, when leverage is positive, borrowing should raise the equity yield. The fact that it does not here means the main driver of distribution rates lies outside capital structure.

Acquisition Price per Room Drives Distribution Rates — ¥9.6 Million vs ¥188 Million

Dividing each deal’s acquisition price (or appraisal value / asset size) by its room count separates the deals clearly. For quasi-co-ownership deals, we converted rooms in proportion to the ownership share.

Ranked by price per room, the Yokohama deal is ¥9.6 million per room while W OSAKA is ¥188.01 million, a 19.6x gap. Distribution rates line up roughly in the reverse order. Because gross yield is “annual rental income ÷ acquisition price,” deals with a lighter cost per room have more room to fund distributions even without leverage.

The Yokohama deal’s underlying asset, Chisun Hotel Yokohama Isezakicho, is a large hotel completed in October 1990, with a gross floor area of 15,674.50㎡ and 18 floors above ground plus 2 below. According to the IR of originator Loadstar Capital, the company raised its ownership stake in stages from 2016, changed the operator, carried out large-scale repairs and renovated guest rooms to add value before structuring this deal. It reads as a deal that fractionalizes existing stock whose upgrade work is already done, while keeping its low acquisition cost.

By contrast, the W OSAKA and Kyoto deals are both newer luxury / lifestyle properties. W OSAKA is a 30-story building completed in October 2020 with 33,369.54㎡ of gross floor area; Dhawa Yuraku Kyoto was completed in January 2019 with 6,271.73㎡. Their asset values are high, so their gross yields are thinner. Investors receive lower distribution rates, but put the other way, these are deals whose prices already reflect expectations of capital gains.

What Does “All Equity” Buy? — Sensitivity at 0%, 50% and 60% LTV

The Yokohama deal’s press release states plainly why it uses no borrowing: “In light of recent interest-rate trends, we did not borrow from financial institutions at the structuring stage and adopted a scheme that acquires the real estate trust beneficial interest solely with funds raised from investors (all equity). This makes cash flow less susceptible to changes in borrowing rates even in a rising-rate environment” (Loadstar Capital release, July 16, 2026; our translation).

So how much yield is traded away for that “less susceptible”? Holding the property price constant, we estimate how equity distribution yield changes as NOI yield and borrowing rate move.

In the base scenario, equity distribution yield at 60% LTV is 8.25%, 3.75 points above 4.50% at 0% LTV. Choosing not to use leverage means giving up those 3.75 points in normal times.

In scenario 4, however, where both stresses hit at once, 0% LTV yields 3.60% and 60% LTV yields 3.75%, a gap of only 0.15 points. Borrowing barely pays off. In general, equity distribution yield flips against LTV once the NOI yield falls below the borrowing rate. With the refinancing rate at 3.5%, the benefit of leverage disappears once NOI yield falls 22.2% below the 4.5% base case.

The Kyoto deal’s loan carries a floating rate based on JPY TIBOR, with a scheduled senior loan repayment date of May 31, 2029 (final maturity May 31, 2032). This shows the issue is not abstract. The prospectus also explicitly names the risk that “an increase in the refinancing interest rate or in refinancing costs” could affect “the trust’s earnings.” For hotel ST deals with terms of 10 to 15 years, at least one refinancing will come during the term.

In other words, what the all-equity vehicle buys is “independence from mid-term interest-rate scenarios,” in exchange for the extra yield leverage would provide in normal times. We read the design philosophy as offering individual investors, who cannot predict the rate path over a 10-year term, a narrower range of distribution outcomes.

Compared with REIT Acquisition Prices per Room — Median ¥24.41 Million; Yokohama Sits in the Bottom 17.3%

Whether an ST deal’s price per room is high or low can’t be judged in isolation. As a benchmark, we use the acquisition prices of properties held by the seven listed hotel REITs. In our ownership master (as of September 14, 2026), the seven REITs hold 302 properties with total acquisition price of ¥1.8401 trillion and 52,352 rooms. Excluding 2 overseas properties, we analyzed the 300 domestic properties (total acquisition price ¥1.8042 trillion; 52,337 rooms).

Overlaying the ST deals on this distribution makes their positions clear. The Yokohama deal’s ¥9.6 million per room sits right next to the band of REIT properties under ¥10 million per room (54 properties, 18.0%): it would rank 52nd from the bottom, at the 17.3rd percentile. That is a relatively thin price band in listed REIT portfolios.

Meanwhile, only 8 of the 300 REIT properties (2.7%) exceed the Kyoto deal’s ¥120.29 million per room, and just 2 exceed W OSAKA’s ¥188.01 million. Assets in an ultra-high price band that is very rare even in listed REIT portfolios are being allocated to individuals in units of ¥100,000 or ¥1 million.

To sum up, hotel-backed STs are stretching toward both ends at once: the cheap band that REITs don’t buy, and the expensive band that even REITs hold only a handful of. Compared with listed REIT portfolios, which are concentrated around the ¥24.41 million median, STs are smaller vehicles and so tend to swing toward the extremes of the price range.

Locations of the Four Deals and Estimated Settled ADR by Area

Plotting the underlying assets on a map shows that all of them sit close to a major terminal station or a theme park. Circle size shows room count, and color shows the price-per-room band.

The estimated settled ADR for Naka Ward, Yokohama was ¥11,156 in August 2026 (N=51 properties). Assuming 80% occupancy (full-year; a modeling assumption), annual room revenue per room comes to about ¥3.26 million, and the Yokohama deal’s ¥9.6 million raised per room is about 2.9 times that. It is a rough gauge that uses room revenue alone as the denominator, but it gives one yardstick for where the low price per room comes from.

Kanagawa’s estimated settled ADR was ¥14,478 in August 2026, 7.5% below ¥15,648 a year earlier. Peaks such as ¥15,574 in November 2025 and ¥15,286 in April 2026 remain, so the overall level has not collapsed. For a vehicle designed to run for a decade, what matters is not month-to-month moves but whether the acquisition price per room is low enough to keep paying distributions within this range of swings.

Practical Implications — How to View STs as an Exit Vehicle

One more vehicle-level issue is liquidity. Among the deals covered here, those designated as transfer-restricted offer limited opportunities to sell during the term. For deals with terms over 10 years, this becomes a real risk factor. Several deals also give the issuer an option to extend the term, so investors should assume the redemption date is not fixed. For a broader comparison of fractional vehicles, see our article comparing listed REITs, private funds and STs by minimum investment and disclosure frequency.

Related Reading

• Own a Hotel from ¥100,000 — Security Tokens Open a Third Funding Route
• Hotel Acquisition Costs 7.1%: A 6.5% Gross Yield Becomes 4.65% Net