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Bisnow Survey Shows Many In CRE Already Investing In The Metaverse, Dystopia Fears Be Damned

The metaverse is just now emerging from nonexistence, but the commercial real estate sector is already considering how the virtual reality platform will send their business to the next level. 

There's certainly a place for CRE in the metaverse, as investors snap up virtual parcels of land and build offices, stores and entertainment venues within the platform, a virtual world made up of interconnected virtual communities that users can access through virtual reality headsets, augmented reality glasses, smartphone apps or other devices.

While there's still a level of investor wariness, almost 90% of respondents from Bisnow's first-ever survey on the metaverse have at least some knowledge of the platform, and they are largely interested in learning more. 

The survey, a compilation of opinions from nearly 400 respondents over the past month, showed that more than a third of respondents are either interested in investing in the metaverse or have already done so, despite its newness.


"You can't stop the tide of international demand in utilizing this new form of value," PEP Real Estate Property owner John Pasquale said.

Others remain skeptical at best. 

"It's a step toward dystopia," Soft dB Regional Sales Manager Mike Smoyer said. "A lot of dystopian depictions of the future are very much focused on the idea of people's complete removal from one another. That's now actually being pushed by our most powerful tech companies."

One major CRE investor disagrees, as the platform picks up interest from the sector. Real estate giant Jamestown paired with Digital Currency Group at the end of 2021 to re-create One Times Square in Decentraland, one of about a dozen major community platforms within the metaverse. 

Jamestown sees "big growth" opportunities in the metaverse, principal and President Michael Phillips said Tuesday at Bisnow's Atlanta Adaptive Reuse and Conversions Boom event. 

“We will be sort of ... creating our whole portfolio in a series of metaverses," Phillips said. “Some of the most valuable assets in the real estate space have been digital assets. Times Square signs, the advertising in search engines. As we move into that space, the connection to people ... and their ability to work and create wealth and income totally virtual is something we’re all seeing."

The metaverse has been front and center of many conversations — tech or otherwise — of late, spurred last year by a number of high-profile moments. In October, tech billionaire Mark Zuckerberg announced his firm Facebook would change its name to Meta, highlighting the company's stake in the metaverse, or "the next evolution in a long line of social technologies," the company said. 

In the two months after that announcement, the term "metaverse" appeared in more than 12,000 English-language news articles, after appearing in fewer than 4,000 during the first nine months of 2021, The Washington Post reports, citing Factiva data. Google searches for the term spiked toward the end of the year as well.

In November, acquired a 116-parcel "estate" in the Fashion Street district within Decentraland via a new subsidiary, Metaverse Group. It paid 618,000 mana, an Ethereum-based token used as currency in Decentraland, for the deal, which roughly converts to about $2.4M.

In a first-of-its-kind metaverse real estate deal, a venture capital firm took out a $30K mortgage from Canadian technology firm TerraZero last month to occupy space within Decentraland. 

Goldman Sachs and Morgan Stanley both reported they see $8T worth of opportunity in the space, and major institutional investors like BlackRock are looking to get into the sector in a bigger way.


Bisnow's metaverse survey includes responses from 386 readers across the U.S. and UK, with participants answering questions about their knowledge of the metaverse, its relationship to real estate, and whether they or their companies would be willing to invest in the metaverse.

About 21% of respondents are thinking seriously about investing, while 6.5% already have. 

"The metaverse promises that in the future, we will be inside the internet. It will be conversational in a three-dimensional way," Agya Ventures Managing Partner Kunal Lunawat said.

Some asset classes may translate better in the metaverse, sources note, such as retail and hospitality. 

About 45% of respondents have, or might use the metaverse for personal use, such as by wandering around virtual shopping centers.  

"It's rethinking customer engagement," Lunawat said. Nike, for example, sells a digital sneaker that allows customers to go to special events and discounts. 

"Retail mall owners might soon own physical space plus metaverse space."

The metaverse will also have applications in the meeting industry, and thus an impact on hotels, according to Liesl Leary-Perez, vice president of corporate marketing at virtual event platform Hubilo. 

"There's a whole new generation of people who don't actually feel like they have to go to a conference or trade show in person," she said. "Gen Z is definitely going to be using virtual technology for that purpose. They're already familiar with it, because they're already playing very exploratory games."

Phillips also pointed to younger demographics as a key reason to invest in the metaverse. 

"Generation Alpha is just around the corner. They're playing with Legos in your living room. And they will be the third generation of completely digital native people and they'll have a very different experience about how they'll consume things," Phillips said. 

The metaverse also enables companies to debut products or experiences that aren't yet possible in the real world, M2 Studio CEO Michael Potts said.

"There might be special rocket shoes or laser jet skis that don't exist in the real world, but that will give you superpowers or some special skill that you can do in the metaverse."

Almost 29% of respondents believe real estate applies to the metaverse.

Though she has bought a few small "apartments" in a multiverse platform, Gran Inc. Regional Property Manager Michelle Marchello said they aren't serious investments, but more of a pastime.

"It's just for fun," she said. "It's novel, it's sort like buying and selling property in Monopoly."  


More than two-thirds of respondents said their companies are not exploring metaverse investment opportunities. The main factor holding them back is knowledge — 43% of respondents don’t understand the metaverse enough yet to see where the opportunities are or have confidence in it.

"We've having conversations about tokenizing real estate, and we still don't understand whether that's good, bad or even workable," Schwartz Co. President John Schwartz said. "Today, a good many stakeholders have to agree on a real estate development. Selling tokens is a different animal."

Some respondents are in a wait-and-see mode; 23% said they need more time to see how the early investments turn out.

"Investing in a fake world seems illogical," said one anonymous respondent, while another said "it feels like throwing darts at this point," and another quipped that "P.T. Barnum was a smart man," referring to how the famed showman built a business on the belief that the public was exceedingly gullible.

Regulation also appears to be an important factor: More than 57% of respondents believe regulation would make people and companies feel more comfortable investing.

The metaverse differs from physical real estate in that it doesn't have the same due diligence process, CXRE Investment Sales Manager Robin Francis-Baker said. 

"What I've found is that it's kind of — sort of — like real estate," Francis-Baker said.

Schwartz's main concern is fraud, noting "there are no rules" for undertaking due diligence to verify that an asset exists, or that a token represents ownership.

One of the most cited worries about the metaverse is that scarcity isn't built into the concept, unlike physical real estate. One platform might be limited, but other platforms can be created.

"Valuation is a big TBD," said Karen Whitt, head of real estate management service for Colliers. "Values will be based on the individual platforms," and will help determine which are successful. 

Phillips addressed concerns about scarcity at this week's Bisnow event, comparing it to the hospitality industry. 

“There’s a million hotels in the world, and you go to the brands that appeal to you or you go to the cities or vacation spots that appeal to you. I don’t think scarcity is necessarily an issue," Phillips said. "There’s only scarcity of people and talent, and [we've] got to create those places that people really associate with.”

Others are worried about the more practical challenges for wide acceptance of the metaverse, such as the accessibility of VR headsets. It will be a challenge to get companies to invest in tech for the metaverse, which one anonymous respondent referred to as a "3D Zoom conference."

Regardless of stance, many survey respondents expect the metaverse to continue to play a role in real estate conversations. 

Survey respondent Stephania Stefanelli, a Realtor associate with Douglas Elliman Real Estate, compared the metaverse to the birth of the internet in the 1990s, and to the roll out of smartphones and Facebook in the early 2000s, two events that represented enormous economic and social changes.

Form 4 Architecture Chief Artistic Officer John Marx said he has already used the metaverse and can imagine a time when entire digital twin buildings — even whole cities — will be part of it. 

"The reality is, the metaverse will change the human condition," Marx said. "It may not be all good, but it will be a vast change." 

CORRECTION, FEB. 24 10 A.M. ET: An earlier version of this story misattributed a quote by M2 Studio CEO Michael Potts to another person. The story has been updated.