The real estate world is making itself at home in the metaverse, that digital kingdom in which thousands of intangible properties are sold for millions of dollars every day, and where someone can also become the owner of a stunning mansion for no more than $2,400 – provided you can pay in the cryptocurrency the platform requires.
Just as in the physical real estate market, the final cost depends on when the deal is done, the metaverse in question, the size of the property and its location. With great speed, a colossal digital real estate market is coming into being, above all since last year, when Mark Zuckerberg changed Facebook’s name to Meta. Since then, interest in this parallel universe has taken off, and the key factors are speculation, major asset volatility, and reasonable doubts as to whether all these bricks, which can’t even be touched, will create a new internet bubble.
Sales in the four principal metaverses – Sandbox, Decentraland, Cryptovoxels and Somnium – reached $501 million in 2021, according to MetaMetric Solutions. During 2021, 268,645 virtual properties (digital assets) were sold. Of these, 62% belonged to Sandbox and had an average price of $12,700 per plot. This metaverse and Decentraland are the most popular, although also the most expensive. In fact, some sales have exceeded several million dollars. It’s estimated that in 2022 sales will double, up to a billion dollars. The cofounder of the digital real estate business Metaverse Group, Michael Gord, explained the potential to The New York Times: “Imagine if you came to New York when it was farmland, and you had the option to get a block of SoHo.”
That’s why there is a growing number of real estate businesses and luxury real estate agents jumping feet first into this universe, where the participants interact using avatars. This week the residential properties of a new metaverse, Keys, have gone on sale. Up for grabs are 8,888 digital mansions, realistic and rendered in 3D, and available for the holders of the currency key.
The owner of Prestige Realty Group, Tony Rodríguez-Tellaheche, who operates in Miami, has bought 18 of these residences, which is the maximum for each virtual wallet. The price per mansion is about $2,460 (which corresponds to 0.88 ethereum, according to its value last Friday). “It’s like the real world. I want to resell various metamansions in the future, but I’d also like to hold onto others for a longer time. Sometime in the future we want to have a meeting like this [referring to the video call] in my mansion in the metaverse,” he says. Following the sale of its residential zoning, this metaverse will sell properties where one can construct whatever they like. For example, “you can open a furniture company for digital mansions or for physical sales, with shipments to your real house,” he says.
Rodríguez-Tellaheche is convinced of the potential of the revaluation of the mansions that he has just purchased, as has already happened in other metaverses. “I sell real estate in Miami, where houses are 35% more expensive than two years ago because there’s no stock and a lot of demand. In the Keys metaverse the same thing will happen, some will have more value than many real-world houses,” says this agent, who is convinced that the next bubble is coming.
The virtual real estate development business Everyrealm, which was previously known as Republic Realm, is present in 13 metaverses. It has the world record so far for the highest such payment: $4.3 million for a virtual plot in Sandbox. The seller was the video game company Atari. Their business strategy, as announced, is to achieve an attractive cost effectiveness adjusted to risk through the acquisition, management, development and sale of digital plots. The brand has already created a museum of digital culture for NFTs, a mall and the first university – all in the metaverse. In August 2021, it designed Fantasy Islands, a luxury residence in Sandbox anchored in 100 islands, which sold out within 24 hours. The starting price was $15,000, although resales have reached $300,000.
Another example is that of Metaverse Group, which has bought a property in Decentraland for $2.43 million to host fashion events and retail stores. A host of businesses, large brands and investors is beginning to buy properties to build their commercial spaces. No one wants to miss this train, although many companies don’t know at the moment if it will arrive to its destination or fly off the rails. Nike, Adidas, Sotheby’s, PwC, JP Morgan, Samsung – the list is immense – have already spent a fortune. There’s enormous commercial opportunity for these businesses, which can advertise themselves and organize events for a younger digital audience.
The Spanish universe
That’s what’s happening in the first Spanish metaverse. Uttopion is the platform selected by Lanzadera, the startup accelerator created by Juan Roig, the president of Spanish supermarket chain Mercadona. This metaverse has recently put its first thousand properties on presale for a price of between $2,200 and $22,000. It’s divided into communities. “We have two, one focused on music and another on sports. In each there are 500 finite properties. There aren’t going to be any more because they’re created using NFT technology,” says Soraya Cadalso, the cofounder. In their digital properties, which for now can be bought with euros, it’s possible to build a virtual replica of a club, a concert hall, a stadium or a festival. Although there are also plots for other activities: cryptobanks, trade... “The buyer can do anything from position their brand to sell products or give exclusive content to clients,” Cadalso explains.
Once acquired by the owner, each property is an NFT guaranteed by a unique code through a digital contract which can be used, sold or rented. “Fewer than 20 days ago we closed the presale registry and we began with the sale of the Terras [as their properties are named]. Since then 30% of the Terras have been sold,” Cadalso says. The sizes run from about 4,300 square feet for the smallest ($2,200) to 42,000 square feet for the largest ($22,000).
Also in Spain, Metrovacesa is the first promoter to immerse itself in the metaverse, although still in a limited form. It doesn’t sell digital property, rather real property, thanks to its alliance with the Spanish start-up Datacasas Proptech. This test of concept begins with the promotion of Málaga Towers in Decentraland, with the possibility of accessing other virtual worlds in the future.