The metaverse may be digital, but its real estate market is booming
Once Facebook’s parent company, Meta, made its announcement in 2021, the business world took note of this change. One key difference is that Second Life and many other virtual reality worlds like it are more or less managed by one player, a digital space created and set up by one company. The metaverse will be something different—Meta is attempting to build it, but it will be more akin to the internet itself: an interconnected space inhabited by many users and companies. Roblox and Microsoft, among others, have announced plans to also join in this vision.
“It’s a future beyond any one company that will be made by all of us,” said Facebook CEO Mark Zuckerberg in his keynote address on the topic.
Colliers’ national research manager for retail services, Nicole Larson, laid out in a study why companies need to be strategic about paying attention to these changes and the impacts they could have on business.
“Property owners who embrace the virtual world will enjoy new revenue streams, while those who choose to ignore it could potentially see their real estate assets depreciate in value,” Larson wrote. “The global billboard business is a billion-dollar industry. With augmented reality, any building in the world can become a canvas for media and host outdoor advertisements without being subject to permitting restrictions.”
She went on to note major international brands that are taking advantage of this kind of shift, including Nike, Ralph Lauren, Louis Vuitton, Tommy Hilfiger and many more. Even restaurants, she noted—though visiting one is traditionally an in-person experience—are exploring how to build their brands on the platform.
The underlying takeaway across the real estate industry is that the metaverse is neither irrelevant nor a threat to business in the real world. Instead, Colliers’ staff members argue, it has major implications for the future and opportunities to increase revenue for companies. For their clients, this can mean expanding their footprint by embracing digital sales online if they are a retailer or by building advertisements for their real-world offerings. Either way, companies should not be turning a blind eye to the opportunities available.
Anjee Solanki, national director for retail and practice groups at Colliers, wrote in a 2021 study that the metaverse would be a prime location for companies to expand their advertising, real estate and retail offerings.
“As the technology advances, retail developers partnering with their digital counterparts may expand their offering, replicating physical assets into the transactional-based immersive environment,” she wrote.
In a podcast on the subject with MIT real estate technology expert Steve Weikal, Solanki underscored the potential opportunities involved.
“There’s a whole economy around developing the real estate—you actually acquire the digital real estate in the town, whether it’s a fanciful made-up town or an actual digital version of, say, Manhattan,” Weikal told Solkani. “But there’s a system, a mechanism for you to acquire the land and to do the development. The same process that you do in the real world.”
Exemplifying the importance of metaverse opportunities for all kinds of businesses, Solkani noted the takeaway for retail brands in particular, envisioning a shopping environment that integrates our real-world malls with the convenience of online shopping.
“There’s an endless amount of virtual square footage to be created for all of us shopping fans to go into these shopping centers and malls and essentially shop 24/7,” she said.