Two of the biggest movers and shakers in the real estate world globally – brothers Tal and Oren Alexander – recently decided to partner with a metaverse company called Republic Realm to develop digital property across 19 “worlds” in Sandbox.
And they paid $4.3 million (US) for the privilege. Think about that for second.
Two of the world’s most successful real estate developers at one of the most wildly successful real estate firms on the planet decided to drop more than $4 million on digital land in a “multi-verse” called Sandbox that most people have never even heard of.
Metaverse Real Estate
In this metaverse economy, virtual real estate is at high value, and quickly becoming a trillion dollar a year industry.
If that doesn’t tell you that the real estate industry is going to change dramatically as the metaverse picks up steam nothing will.
Real Estate in the Metaverse
While the Alexander brothers are busy working to develop those 25,000 plots of digital land they purchased other people are spending small fortunes on digital property in the metaverse, too.
Earlier this year and anonymous buyer snapped up a piece of multi-verse property snuggled between Snoop Dog for a cool $450,000. The value of that property doubled almost overnight.
Adidas went in on the real estate market in the metaverse, too, securing 144 plots of “land” for an undisclosed seven-figure some – even though they said they have absolutely no idea how to develop the property right now.
This is real money spent on real estate in the digital world.
VR Property is a Trillion Dollar a Year Industry
According to the folks at Grayscale (one of the biggest crypto asset management companies under the sun) VR property and real estate has the potential to generate up to $1 trillion in cold, hard cash every single year – and that’s their more conservative estimate!
The Alexander brothers we mentioned a moment ago really made their name in the physical real estate world working with some of the most exclusive clients on the planet. Kanye West, Tommy Hilfiger, and other superstars have all work hand-in-hand with these developers.
Today, though, the Alexander brothers (through their partnership with Republic Realm) are mostly focused on hunting down “trophy properties” in the multi-verse – properties that are 100% digital, fully editable, and have no real scarcity whatsoever.
How Does Real Estate Work Without Scarcity?
The lack of scarcity in the digital multi-verse is causing a lot of people used to the traditional real estate world quite a bit of heartburn.
This is where these investors just can’t quite get over the idea of investing in real estate that isn’t real at all.
After all, big piece of the puzzle behind the success of the traditional real estate world is that land is always in demand and they aren’t making much more of it.
This (obviously) drives the value of physical real estate through the roof, pushing it higher and higher each year because of the increased demand and lower levels of supply.
In the multi-verse, though, supply problems – LITERALLY – did not exist.
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A piece of property that sits next to a celebrity superstar in a particularly glitzy part of the metaverse can be duplicated infinitely – with that exact same lot, that exact same view, and that exact same structure being sold over and over again without any restriction whatsoever.
The metaverse is going to have to resolve this conflict in the future if these properties are going to be worth the kinds of numbers some real estate industry insiders believe they could be valued at.
How they figure that out, though, is a bit of a mystery.
There’s a Mountain of Risk Ahead, Too
Though there are lots and lots of developers eager and excited to dive headfirst into the new digital land rush that is the metaverse, plenty of others are a little skeptical about how things could shake out.
These properties are, after all, properties that cannot be “lived in” and properties that exist solely in the digital realm. The scarcity issue we highlighted a moment ago is something that has to be wrestled with, too.
At the end of the day, though, it’s important to remember that when the internet was first introduced to the world it was thought of as a passing fad and a waste of time. So was cryptocurrency.
There are plenty of metaverse skeptics out there, too.
Don’t be surprised if (like all the others) metaverse real estate takes off like wildfire and rewards early adopters and risktakers more than anybody else!