With home prices continuing to soar in popular markets across the country, first-time homebuyers are finding it increasingly more difficult to score a small piece of the burgeoning real estate market. Yet recently published reports have splashed head-scratching breaking news about virtual real estate properties selling for $4 million or more in newly emerging metaverse platforms.
Described as an alternate digital reality where people can work, socialize, play, and interact, the metaverse is a newly emerging technology offering virtual 3D environments complete with avatars in a sophisticated cartoon-like atmosphere.
Republic Realm, a virtual land investor and developer, recently dropped $4.3 million for virtual property in The Sandbox–the largest metaverse land purchase to date. Meanwhile, Tokens.com, a digital investment firm, paid $2.4 million for a virtual estate in Decentraland. Both of these deals involved non-real real estate; the big question many have is why would anyone spend such a huge amount of money on something that’s intangible?
In a recent Zoom press conference, Janine Yorio, CEO of Republic Realm, referred to the acquisition as a “dedicated space inside an interactive video game experience”—something completely different from real-life real estate purchases.
“If you consider the costs of actual real estate and the amount of money spent on banner ads and domains, $4.3 million is really not that huge of an amount,” she said. “We bought the equivalent of an entire city with global reach, where we can build something extravagant and interactive.”
Yorio argues that the whole point of the metaverse is to give users access to something they can’t do in real life and to generate a demand for these experiences.
“In the metaverse, you can do things like fly a spaceship, explore other planets, or time travel,” she said. “It’s more engaging than Netflix or Facebook, and our goal is to create a place that people want to come back to again. Plus, it lets them connect with others around the world.”
Implying that the metaverse is the next evolution within social media, Yorio believes platforms such as The Sandbox and Decentraland are just the beginning of future interactive 3D environments.
Founded in 2021 in New York City, Republic Realm invests in, manages, and develops assets including virtual real estate, metaverse platforms, gaming, and infrastructure. The company is among the largest “land” owners in The Sandbox, Decentraland, Treeverse, and Axie Infinity.
One of its newest luxury virtual offerings is Fantasy Islands, a master-planned real estate development within The Sandbox. It’s a series of private islands that originally sold for $15,000 per island, with the most recent island sale up to $270,000.
“We even have virtual boats for the avatars to get to the island,” Yorio said. “They started at about $500 each and are currently valued at close to $20,000 each.”
The Sandbox, founded in 2018, is a blockchain-based virtual world where players can build, own, and monetize their content, as well as immerse themselves in experiences that include virtual shows, concerts, art expos, museums, games, and social hubs. To date, more than 200 brands, such as The Walking Dead, Snoop Dogg, Atari, Adidas, and many others have bought virtual land or built exclusive experiences there.
“Virtual real estate isn’t actually a new concept. It’s been a common feature in global games, such as GTA Online, where users can buy virtual land and other digital assets,” Sébastien Borget, co-founder and chief operating officer of The Sandbox, told The Epoch Times. “As more brands bridge into the metaverse, this simply creates more experiences. It’s a virtuous cycle that will only keep building as the metaverse evolves.”
In addition to Republic Realm’s record-breaking purchase, Borget noted that someone recently spent $450,000 to become Snoop Dogg’s virtual neighbor. Last year, The Sandbox saw tremendous growth, with a more than 1,000 percent increase in users and a 400 percent growth in virtual landowners. Published reports indicate that total virtual land sales to date top $211 million, with over 166,000 spaces left.
Borget is also predicting mega-expansions for 2022.
“The Sandbox will continue to grow as a vibrant, engaging, and fun place to hang out, bringing the first virtual shows and concerts to the platform and attracting people of all kinds and backgrounds,” he said. “Our focus is on enabling the passions of the thousands of creators and builders that use our platform to express themselves, build their creations, and craft unique experiences for others.
“That’s why we’re such strong proponents of the open metaverse, which is free of a single gatekeeper that owns all virtual worlds.”
Alex Montalenti, a co-founder of RealGrader, a digital marketing agency for real estate professionals, said the virtual acquisitions are really all about people’s perception of what will escalate in value.
“Yes, it may seem very weird, but it’s virtual technology, and people will spend money on what they believe will eventually appreciate in value,” he told The Epoch Times. “It’s similar to investing in the stock market—you’re not buying anything physical, but you invest in it to ultimately make more money. If the audience is there, the metaverse properties will sell.”
Montalenti equates the metaverse to a cyberspace upgrade to the internet.
“When the internet first started to become popular, nobody really understood what it was, but now everyone knows what ‘being online’ means,” he said. “The metaverse is simply an online interactive space where you can do everything from playing games to conducting business meetings and networking with others anywhere in the world.”
Montalenti grew more “metaverse-savvy” watching his children playing on Roblox, a three-dimensional cyberspace community.
“I noticed they started buying things like virtual toys and pets for $5 to $10, and now my daughter has about 20 cyber-pets,” he said. “It’s similar to those design apps where people can decorate rooms of virtual homes and literally buy virtual furnishings for them.”
Today, Roblox is ranked as one of the top online entertainment platforms for audiences under the age of 18, with earnings surpassing $761 million.
Just as children create their avatars to navigate through these types of game worlds, business professionals are now using the same technology to hold meetings, attend events, and network with other businesspeople.
“It’s way more interactive than Zoom—they can go into a virtual trade show, walk around, and talk to other people anytime they want,” Montalenti said.
Even real estate firms are venturing into these new cyberspace platforms. Montalenti has actually conducted presentations as an avatar inside eXp World, a private metaverse that’s available 24/7 for all eXp Realty agents and staff worldwide.
“All I had to do was create my character, go in, and have conversations with agents using their avatars. It’s a much faster way of meeting people,” he said.
Founded in 2009, eXp Realty is now one of the fastest-growing real estate brokerages in the world with over 60,000 agents in 14 countries. eXp Realty created eXp World in 2018 with the acquisition of Virbela, creators of 3D virtual environments.
With the exception of its corporate headquarters in Bellingham, Washington, and some brick and mortar locations, eXp operates primarily with remote staff and agents.
“Every Friday, our agents and employees can go into eXp World for our global company meeting that we also live stream through our internal network,” Jennifer Van Burkleo, senior director of events and social media, told The Epoch Times.
They also use the virtual world for real estate classes, meetings, presentations, networking, and social events.
“It’s a lot easier than Zoom because hundreds of people can be in the same space with each other and we can send private chats or actually speak,” she said. “Plus, in eXp World, you don’t even have to get dressed since your avatar is attending the events.”
The company is also intent on providing fun and excitement for agents and staff with offerings such as virtual soccer games and boat races. Recently, eXp hired DJ Jazzy Jeff to host a virtual club experience, complete with dancing avatars.
“I think the metaverse is the future of real estate, and it’s a great support system for our agents,” Van Burkleo said. “Of course, in the real world, they’ll be meeting face-to-face with home buyers and sellers, but this offers the best way for agents to learn and connect with colleagues around the world at their convenience.”