The hype around investing in the metaverse – the sophisticated and still somewhat obscure collection of online virtual spaces that proponents say is the future of gaming, shopping and human interaction – has created a boom in sales of virtual land on various platforms.
Although parcels are called real estate and the appellation real estate is used to describe the metaverse “land,” the connection between building development and the development of metaverse spaces is loose at best. Some fickle pioneers have dismissed the interests and investments of traditional commercial real estate firms as misleading and misleading.
But new efforts by two big CRE players suggest that new approaches to evolving online platforms may be taking shape, both as a marketing medium and as a gateway to additional customer services.
Jamestown, an Atlanta-based developer focused on adaptive reuse and retail, has already created a metaverse version of its One Times Square property, the 26-story former headquarters of The New York Times, where 20,000 people attended a virtual New Year’s Eve celebration in December. It plans to create more metaverse versions of some of its iconic projects, including Ponce City Market in Atlanta and Chelsea Market in Manhattan’s West Side (which it sold to Google for $2.4 billion in 2018).
“in my opinion, [the metaverse is] “Evolution in how we engage,” Jamestown Director and President Michael Phillips said. Bisno.
It makes sense for the design-focused company, which deals with what Philips calls interactive and experiential properties, to find a way to engage, message and market on this new platform, he said. The metaverse releases are expected for Ponce City and Chelsea markets later this year.
“Either you are in the game, or you are not in the game,” Phillips said.
Courtesy of Jamestown / GrowYourBase
One Times Square, a Jamestown property, held a New Year’s Eve party in the Metaverse area that drew more than 20,000 people.
The largest commercial real estate company plays as well. Sandeep Dev, chief technology officer and technology officer at CBRE, who oversees the program, said CBRE is piloting a program to test the metaverse collaboration tools for hybrid setup, training and work.
Dave said he “fully embraces” the idea of the metaverse as another potential customer service, he said, but the buying and selling of virtual land “doesn’t dominate our focus at the moment.”
Kunal Lonwat, co-founder and managing partner of Agya Ventures, a real estate technology fund, believes that over the next three to six months, a significant number of real estate companies will announce large Metaverse projects.
“I don’t think it would be strange in five years for retail and luxury apartment developers to have senior metaverses,” he said.
Many metaverse proponents say that traditional real estate operators lack the understanding and skill to properly develop and build in the metaverse. And some of the hype may already be fading: While the number of metaverse land buyers has steadily increased since the start of 2022, according to a research report on the metaverse economy from lead developer and investor Everyrealm, land sales have fallen broadly in price.
Said Andrew Kegwell, CEO of virtual real estate company Metaverse Group and co-founder and CEO of Tokens.com, one of the largest real estate owners in Decentraland. “When you bring real-world real estate guys into the metaverse, it’s a gimmick. I think all of these people are trying to find new sources of income and ways to do things.”
Courtesy of CBRE
The CBRE Virtual Desk is being tested in the metaverse for use in prep and hybrid meetings.
But the strategy Jamestown uses may illustrate one example of how CRE executives think about this particular landscape and opportunity.
While detailed case studies for these types of investments do not exist yet, BisnoA private metaverse survey of nearly 400 CRE professionals found that despite concerns about assessment, fraud, and due diligence, 21% of respondents are seriously considering investing, 6.5% have already, and nearly 45% of respondents have used, or may use the metaverse for use. Personal, such as walking around virtual malls or checking out virtual hotels.
CBRE recently opened a Technology Research Center in Richardson, Texas, where certain teams are testing office communications technology for the metaverse. The environment, currently used indoors for training and rehabilitation, was designed to resemble a typical CBRE office, with the North Texas landscape seen from the window. Dave believes that enrollment, training, and other uses will become more valuable to tenants as technology improves and demand increases.
Jamestown has Digital Asset Investing and Funding Strategy, which invests in infrastructure and companies that create the metaverse, including digital design firms like GrowYourBase that build 3D buildings online. This investment is used to benefit existing real property; Philips compared it to investing in proptech, as well as traditional branding and messaging.
Websites and building brand identities aren’t new, and it’s clear that communities can unite around apps and social media, as well as services like Hello Alfred, an app-based personal assistant for tenants. Phillips said the metaverse is an extension and gateway for people to engage with a building in a remote way, increasing awareness and knowledge of the physical building.
“I think this will be ubiquitous in the real estate culture in 10 years,” Phillips said. It’s not a question of ‘What value do I see?’ It’s, ‘How can I not see the value here?’ It’s like saying I don’t need an iPhone, I have a flip phone.”
At the same time, the way brands interact with the metaverse is evolving, indicating greater value in marketing and marketing events and making connections with consumers – especially younger, more digitally savvy shoppers. Lunawat said brands, especially luxury fashion brands, are seeing success selling collectibles and creating space on leading platforms like Decentraland and Sandbox.
Decentraland also recently held Metaverse Fashion Week, which attracted 108,000 visitors, according to Kegel. Tokens.com built a store for Forever 21, which, at its peak during the show, attracted 800 people, who spent an average of 27 minutes searching for costumes for themselves and their avatars. Several brands participated, including Dolce & Gabbana, and they asked not to be placed near some other brands they did not want to be associated with, similar to the way retail customers seek to position themselves in malls.
“This is a viable way to interact with your target audience in a way that is more comprehensive than a website,” Kegel said. “We’ve made it fun, and if you can find a way to engage the consumer, that’s a way to build brand loyalty.”
Courtesy of Jamestown / GrowYourBase
A stage at the Jamestown Metaverse New Year’s Eve party in One Times Square.
Many metaverse experts have said that the notion that real-world real estate and metaverse real estate are similar assets that require similar skill sets is a gross misunderstanding of what the metaverse represents. Everyrealm CEO Janine Yorio said that simply reconstructing digital twins of buildings in the real world will not create the excitement and attraction necessary to bring users back over and over again.
“It’s not that they can’t figure it out,” she said. “Real estate companies are very well capitalized. But they have to start from scratch. There is nothing they have today that makes them particularly suitable to build in the metaverse.”
Kiguel said CBRE’s idea of focusing on office work is way ahead of technology, essentially complicating something that can be done over Zoom.
“People hear the word metaverse and they think they have a great idea and they can take it to the metaverse,” he said. “I don’t think the technology is smooth enough to do work in the office.”
CBRE’s Dave has discovered that technology is now more fluid and efficient than it was just years ago, and he expects the pace of change to accelerate. With mixed-working policies and practices remaining undefined, he said it’s important to “stay close to all technology” as office tenants find their way back into the workspace.
And Philips is still not deterred. Although many in the real estate industry are reluctant to invest in the metaverse, he sees it as an increasing part of reaching future clients.
“People have marketing messages that they’re doing this, but there’s not a lot of evidence, because there is more skepticism than there is a real understanding of what it is,” Phillips said.