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‘Calling It Real Estate Doesn’t Make It Real Estate’: What CRE Gets Wrong About The Metaverse Land Rush

Commercial real estate broker and developer Jay Gaudet's biggest recent career breakthrough came from watching his daughter play Roblox. When she asked him for money to buy a virtual house on the popular global gaming platform earlier this year, it sent him down a research rabbit hole. 

“It was telling me everything that's done in the physical world would need to be duplicated in the metaverse, and that spoke volumes to me,” Gaudet said. “Kids have been ahead of the adults for a while on this.”

A rendering of Metajuku, a metaverse shopping experience created by Republic Realm.

Late last fall, 33-year-old Gaudet, who has 13 years of real estate experience in Baton Rouge, Louisiana, started his own firm, SuperWorld Realty, to focus on the metaverse, the nascent series of growing interactive virtual platforms that have been the subject of a real-life land rush in recent months.

Tantalizing tales of massive purchase and asset appreciation have inspired many firms, brokers and speculators trying to find a way to get in on metaverse real estate — in which pieces of digital space are turned into nonfungible tokens and transferred like a deed — despite the technology and graphics of early virtual worlds lagging behind the hype.

DappRadar, a site that tracks NFT and virtual land sales, recorded $330M in trading volume in Q4 2021, and land on leading platforms such as Decentraland and the Sandbox traded at 150% and 500%, respectively, compared to purchases just a few months prior.

The profits have pushed many in commercial real estate to try and quickly grasp the fast-moving, high-priced market, which proponents claim is akin to investing in Manhattan land 250 years ago. Even established consultancies and investment firms such as McKinsey are issuing reports on metaverse investment potential and offering consulting services for top brands. 

But discussions with early leaders of the virtual land sector, while bullish about the market’s future, may dampen the enthusiasm among CRE pros who believe their skill set makes them natural candidates to manage virtual ownership and development. 

“Merely calling it real estate doesn't make it real estate,” said Republic Realm CEO Janine Yorio, whose firm owns millions of dollars of virtual real estate spread across more than 3,000 plots of land on dozens of platforms like The Sandbox. “It's software engineering. It's buying a designated piece of code in what is effectively a very interactive video game-like web experience."

The traditional vision of vertical development and construction needs to be cast aside, said Yorio, who has a background as a property developer for Standard Hotel Group.

“It’s the same way that game developers would be ill-suited to build Hudson Yards,” she said. The metaverse is more like “a hallucinogenic trip, as opposed to a thing where you take an elevator up through it and walk the floor. Why re-create the real world?”

Gaudet said his clients are looking for something slightly different. Gaudet’s firm works to provide investment advice, consulting and services within SuperWorld, a platform that mimics the real world and allows participants to purchase virtual versions of real places. 

“This particular platform is going to be exactly for people like me, who work in this real estate space in the real world, and even people who don't work in the space who want to understand how to buy physical real estate in a digital way,” he said. 

His work so far has been helping clients figure out ways to monetize the land they already purchased in the metaverse or figure out how to purchase property they may have missed in the real world but could pick up in a virtual one. He said he is seeing people start with properties they are familiar with, places in their hometown or big cities, like the Brooklyn Bridge or the Superdome in New Orleans.

Despite Yorio's proclamation, traditional investors are seeing potential in virtual ways to own existing buildings: Citi and UK investment group Abrdn are exploring ways to buy and sell tokens of existing properties.

“Right now in the virtual real estate space, you see a lot of people just are executing on FOMO,” Gaudet said, using the acronym for "fear of missing out." “I want to be a part of it. I don't necessarily know what I'm going to do with it afterwards, but I want to jump into it.”

Jay Gaudet, a Louisiana commercial real estate professional, just launched a metaverse-based brokerage.

Yorio said investing in metaverse space is more parallel to art, entertainment and retail, and she has rebuffed inquiries from investors in the built environment.

"We get calls from developers who want to build in the metaverse and feel like they’re going to make it legitimate," she said. "It’s already legitimate, and nobody cares about your 50,000 apartments. There’s no place for them in the metaverse.” 

The value in a virtual world is being where brands and advertising are congregating, said Andrew Kiguel, the founder and CEO of, one of the larger property owners in Decentraland and other leading platforms. Kiguel is also a leading owner of Metaverse Group, a virtual real estate firm.

Brands are angling for a prime spot in the evolution of the attention economy and getting in front of a younger demographic immersed in gaming. To them, the metaverse is about billboards, not buildings. 

He compares the process to pre-buying advertising space on Facebook and Instagram that circulate through your social feed. Many of the housing and trophy residential projects are, to him, very speculative assets. Nobody needs your fancy virtual mansion, but there is enduring value in having the right ad placement for Gen Z consumers.

Right now, Kiguel's firm is working on the Tower in Crypto Valley, set to include a convention center, a Bellagio-like fountain, and most importantly, lots of room for advertising. will also help put on a massive virtual fashion event in the Fashion District of Decentraland, one of the larger metaverse platforms, where it happens to be the largest landlord. owns the virtual land where this is happening, and it will be renting it out to brands seeking to capitalize on the event. 

“I don’t think it can be disputed that the metaverse is a real thing that people are going to congregate in,” Kiguel said. “We’re just buying advertising blocks, and we now own a piece of the revenue generation of that community.”

Yorio would disagree. For her, there’s value in experiences. Her firm’s partnership with A-list New York City residential brokers Tal and Oren Alexander, a pioneering example of bringing real-world real estate talent to the metaverse, is about creating unique, artist-designed metaverse homes for high-end clients, she said.

The firm’s Fantasy Island collection of virtual villas in The Sandbox has tallied six-figure sales prices, and Republic Realm sold a $650K virtual yacht in November, paid for with cryptocurrency.  

“Why is Google more valuable than your mom's website? Because more people visit and use it over and over and over again,” Yorio said. “Money is not the limiting factor. There’s lots of money in this space. It's ability to deliver really complicated tech alongside a very holistic understanding of who the end user is and why they would actually want to interact with your thing. This is immersive, interactive and social.”

As the platforms, and the business case for virtual land buys, mature, it still remains to be seen just how much traditional real estate skills will matter in the metaverse.

Kiguel sees a future for traditional real estate expertise, mostly in the leasing end of the business. He is recruiting staff with the task of selling virtual storefronts and explaining the value of certain spaces and properties — many of the same skills one would encounter in the traditional real estate world, especially the storytelling skill. That is definitely not something Gaudet lacks. 

“We use the analogy of Jeff Bezos and Elon Musk, and where they started off with Amazon and Tesla,” said Gaudet of his pitch to investors. “If you invested in Amazon back in the '90s, you knew four generations would be taken care of at this point.”