The Metaverse is Experiencing a Virtual Land Boom

Big tech companies are investing substantial sums in the virtual real estate market with a bet that the future of work will be in the third dimension.

The hottest new real estate market isn’t in the physical world but in the metaverse, which comprises multiple digital realms. Already digital property sales are setting new records, and soon the global market for goods and services in the metaverse will be worth an estimated $1 trillion. 

The metaverse is a 3D virtual world where avatars live and work and is familiar to anyone who has place Fortnite or Animal Crossing. The metaverse creates an immersive digital experience through virtual reality, artificial intelligence, video, and gaming. Each virtual world has cities where users can navigate their avatars into shops where they can buy digital goods using cryptocurrency and hang out with avatars of real-life friends.

Several investment firms are acquiring digital land in metaverse “cities” where players simulate real-life activities like shopping or attending concerts. These investment firms are betting that people and companies will buy virtual homes and storefronts, which will rise in value as more people join the metaverse.

Metaverse Group is one of the world’s first virtual real estate companies. It is based in Toronto but has a virtual headquarters in Decentraland’s Crypto Valley, which is the metaverse’s answer to Silicon Valley. While the metaverse is virtual, the money invested is real. Republic Realm, a firm that develops real estate in the metaverse, paid $4.3 million for land in the world Sandbox, the largest virtual real estate sale to date. Before this purchase, a subsidiary of Canadian investment firm Tokens.com Corp. paid around $2.5 million for land in the world of Decentraland’s Fashion District.

Land ownership is recorded through nonfungible tokens (NFTs), digital identifiers that act as de facto deeds. There are only a handful of digital realms where investors can buy and sell real estate, and all of these realms use their cryptocurrency. The blockchain powers finance the metaverse and money in this digital world is cryptocurrency. People in the metaverse can buy or trade music, art, or even homes with NFTs—unique blockchain-based collectibles that are digital representations of real-world items. 

“eXp Realty is the fastest-growing real estate company in the world, due in large part to our early investments in the metaverse with Virbela,” says Dawn Conciatori, CRP, GMS. “Our company has grown into a multi-billion dollar business growing to 70K real estate agents globally today. Through Virbela and the metaverse, we have expanded into 15+ int'l markets without stepping foot on an airplane, and have been named one of Glassdoor's Best Places to Work for four years in a row.”

eXp Realty real estate agents receive training, transactional support, unparalleled collaboration, and networking without brick-and-mortar offices. “Most importantly,” says Conciatori, “through the metaverse, we have the best of both worlds: we are delivering outstanding real estate and relocation services to our customers all with a very personal touch. Virbela continues to build more virtual environments for work, learning, and events while helping organizations around the world recreate the office experience, connect their global workforces, and build communities online. Using the metaverse seems limitless!”

What are people buying in the metaverse? Luxury brands like Louis Vuitton, Gucci, and Burberry have already leased space.

Like in the real world, zoning rules limit where and what companies can build in the metaverse. But unlike the real world, metaverse buildings can defy the laws of physics as they levitate above the ground or bend in gravity-defying ways. Metaverse real estate is also similar to real-world in that virtual real estate is not infinite. For example, Decentraland is 90,000 parcels of land, each roughly 50 feet by 50 feet. Real estate in the metaverse is similar to actual real estate in other mundane ways, like how real estate companies employ virtual managers who manage rentals and handle tenants in the metaverse.

While an exciting new frontier, investing in the metaverse is speculative and risky. Even during a market downturn, actual real estate usually retains some value. The value of virtual properties can fall to zero if the metaverse becomes unfashionable and people stop visiting. 

The metaverse may change the way we work

Bill Gates, the Microsoft co-founder, predicts that the future of work will be shaped by the metaverse and the virtual worlds that tech companies like Facebook (now called Meta) and Microsoft are building.

The Covid-19 pandemic has already changed the modern workplace, and more companies are offering flexible remote work schedules to employees. Gate says these changes will intensify over the coming years as more workforce enters the metaverse. 

“Within the next two or three years, I predict most virtual meetings will move from 2D camera image grids...to the metaverse, a 3D space with digital avatars,” Gates writes in a blog post.

Gates says that Microsoft is currently working on making its Teams workplace software metaverse-friendly and complete with 3D avatars. In the metaverse, workers will be assigned a 3D avatar that will attend meetings in a virtual office space and will be able to interact with co-workers’ avatars. Adopting this new way of working will take time and willingness from employers and their employees.