In March, contractor Gabe Sierra, whose family has been in the construction business for more than 30 years, will receive the latest offer for an 11,000-square-foot, seven-bedroom, pool mansion in Pine Crest, Miami.
To shore up the deal, he put in the exact same house and a bright green King Kong-sized gorilla that scales downtown skyscrapers and stalks the streets of South Florida.
The twins’ home is in the Metaverse. It’s a catchphrase for the growing conglomerate of immersive digital worlds where avatars work, play and shop.Pixelated land parcels are being bought and sold on the market and built on top of them currently worth $1.4 billionthe Metaverse will be a new frontier for real estate builders and investors.
Sierra, an avid gamer who uses a purple gorilla as one of her avatars, paid $10,000 for a digital parcel in an online world called Sandbox, then voxel architectsis an architectural firm that specializes in virtual 3D properties, building digital homes combined with physical objects. All of these will go up for auction in March, and he expects a sale price of around $10 million.
“This is a project that blends the physical and digital boundaries as much as possible in a home,” Sierra said of the home. Meta Residence One. “We combine real-world construction and extend it in the digital space. As these technologies become more immersive, they will become more meaningful.”
Similar to real-world real estate, where prices fluctuate according to supply and demand principles, Metaverse real estate operates at a fixed scale. The internet itself may be infinite, but most virtual game worlds are already divided into a fixed number of parcels, and prices rise as the number of buyers increases.
Financial transactions in the Metaverse will be processed in cryptocurrencies and powered by blockchain, a digital decentralized public ledger that eliminates the need for third parties such as banks. Despite the FTX collapse and crypto winter predictions, the metaverse real estate market $5.37 billion increase By 2026.
In one of the most popular Metaverse worlds and a sandbox Sierra bought for $10,000, much of the virtual land rush is in the hands of global companies such as Adidas, Atari, and Warner Music Group. is buying space to create. Entertain, sell merchandise, launch a virtual headquarters, host immersive gatherings for employees and fans, and more.
Last year, the total value of sandbox land sold through non-fungible tokens (NFTs) was estimated at $167 million. Also, land purchased directly from the sandbox costs him around $400 per lot, but there is an active secondary market and the price can be many times that. Proximity to land owned by celebrities and big brands also drives up prices. After Snoop Dogg bought sandbox lots and named them “Snoopverse” one buyer paid $450,000 just to be his neighbor.
“Land is becoming the infrastructure of the metaverse,” says Sandbox co-founder Sebastien Borget. “There are entities in this ecosystem that develop and provide services that help people find suitable land, buy suitable land, and understand the value of that land.”
The Metaverse has been around since 2003 with the launch of Second Life, a three-dimensional virtual world platform. But it wasn’t until Mark Zuckerberg announced that the social media platform formerly known as Facebook would now be called Meta that virtual real estate took off in earnest that the future of the next digital frontier would come to life in a big way. It wasn’t until late 2021 when it announced it would be placing a bet on.
And now, in addition to billboards and hamburger shops for Avatar, housing is being built on these parcels. They offer no shelter or a place to sleep. But as we go online, it gives us a place to gather and brag.
“Buying property in the Metaverse for residential purposes is a kind of prestige,” says Christie Waterworth, a journalist and contributing analyst to the magazine. motley fool A regular writer on Metaverse real estate.
It’s also an opportunity to bend the laws of physics. all areasis a metaverse technology and infrastructure company that has partnered with artists such as Misha Khan and Daniel Arsham to The Row, a futuristic collection of digital homes featuring melted angles and dreamy floating spheres inspired by Salvador Dali. The homes premiered at Arthi Basel in an immersive exhibit and are not yet for sale, but Everyrealm CEO Janine Yorio expects them to sell for around $75,000 each. He said he does.
Buyers will receive a certificate of authenticity and a 3D model of their home, which they will be able to place in the land of their choice in the online game world.
“We asked for a lot of cultural references, and one of them was the Sears house idea. I was able to do it,” Yorio said.
Some online worlds display a digital map of the Earth, allowing buyers to purchase places and coordinates of sentimental or historical value. Detroit real estate investor TJ Brisebois, 37, owns about a dozen parcels of land in the Motor City, but none on the planet. highlands, a game portal mapped to the real world. He buys them, marks them up and resells them. He estimates his 10% return on funds has been earned since starting in 2022.
He said his purchase was just an extension of his business in the real world.
“I didn’t really know until I got really interested, but I was actually going to put a few bucks into it,” Brisebois said. “For people in the real estate industry, this is important because there is real opportunity here.”
Mike O’Brien, who heads the Web3 and digital assets team at Ernst & Young, said buyers worried about property taxes on virtual real estate can rest easy. Tax laws on virtual real estate are evolving, but “we haven’t yet seen a property tax on real estate issued by the government,” he said, adding that indirect taxes such as sales tax, sales tax and gains consideration apply. He added that there are many. .
Mr. O’Brien is the owner of a digital estate located in Superworld, another digital world mapped on Earth. He recently bought a plot of land in New York City that will be home to the bar where he met his wife.
Brick-and-mortar homebuilders are also leveraging the Metaverse for opportunities to reach new customers. in January, KB homeOne of the largest homebuilders in the United States cut the ribbon in the community of Decentraland. This community allows potential buyers to participate, explore and experiment with customization options for 3 model homes.
Buyers can swap out everything from countertop materials to the overall architectural style. KB Home Chief Marketing Officer Amit Desai said the move is a natural result of the virtual walkthrough options that have increased since 2020.
“Even before the pandemic, we were on this path of providing enhanced digital tools, but with the pandemic, we are making it easier for prospective homebuyers to find a home in the comfort of their current home. The need has accelerated,” Desai said. “The Metaverse is an extension of that.”