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In 2021, two worlds collided when my luxury real estate practice was presented with a trailblazing opportunity to represent Meta Residence One. This was no ordinary home. Yes, it was slated to be built on a real plot of land, but a virtual copy of it would also exist in the metaverse. In this respect, it was the very first property of its kind.
That’s because the metaverse is quickly becoming a platform, or a collection of several platforms, where more and more people are spending their time and their money. These are interactive spaces where you can advertise, socialize, build, and explore. It’s no wonder we’ve started to imagine how to bring real estate to this realm.
The metaverse and real estate markets were made for each other
Upon closer inspection, it becomes evident that real estate and the metaverse are entirely compatible. After all, real estate is a tangible asset in which a person purchases a piece of property and the home that occupies it, or they can build a home on an empty lot. The transaction involves real money or financing, and the purchaser receives a deed indicating ownership.
In the metaverse, the purchase of real estate is represented by an NFT — a non-fungible token which is a type of inimitable digital identifier. The token demarcates distinct coordinates, just like real-world parcels. The combination of several adjacent parcels results in an estate.
This type of virtual land is purchased with cryptocurrency and property owners can develop their land into a wide variety of worlds, events, and experiences. So in effect, the concept of real estate remains consistent regardless of whether it takes place on a city block or on a blockchain.
My team and I may have broken new ground with the launch of Meta Residence One, but new developments have since followed — notably, the purchase of 19 commercial metaverse properties by Curzio Research for $5 million in May 2022. This is just the beginning. But like all beginnings, it’s important to remember that opportunities also come with challenges.
The metaverse is in the midst of a dynamic evolution and growth
Picture a freshly-formed earth, ever-changing, full of turbulence and possibility as new ecosystems explode across its surface. That analogy shows where the metaverse was a few years ago; novel and strange, with its first denizens tentatively figuring things out as they lay the foundations for future construction and exploration.
It’s evolved a lot since then, but the evolution hasn’t slowed, nor has the turbulence completely subsided. Today’s metaverse may be increasingly sophisticated, but it’s still not regulated — and in fact, its continuity isn’t necessarily inevitable. If your assets were attached to a platform that was retired or sabotaged, it’s possible to lose them permanently. The constitutional restrictions that protect owners of traditional real estate simply don’t exist in this emergent virtual world.
Moreover, transactions in the metaverse occur on smart contracts — blockchain-based programs that automatically ensure and secure agreements between parties. While this technology has already been adopted for multiple real-world applications, the question of whether or not it’s enforceable in the context of real estate has been a subject of debate.
And the metaverse, being a sphere of digital activity, certainly isn’t free from scammers and hackers. Phishing and other types of data theft remain a legitimate concern, and I would never advise my clients to purchase virtual property without also cautioning them to seek the professional counsel of their attorneys and financial advisors.
The metaverse is a new frontier in the future of luxury properties
Nevertheless, all signs point to growth in this space. The rise of blockchain, digital assets, and NFTs in recent years has been meteoric, and it’s rare for technology to backslide when it has achieved this level of innovation, investment, and popularity.
Some forecasters predict the market could soon surpass $1 billion based on the current growth rate. As more companies engage through online platforms such as gaming, selling NFTs, hosting events, advertising products and services, and attending business meetings with 3D avatars, they’re making tangible investments in virtual spaces.
With the launch of Meta Residence One, my team and I have already witnessed and experienced what it’s like to bring the online and offline worlds together through the metaverse. By purchasing the property as an NFT, the buyer’s investment is secured — and not only do they receive a parcel of land in the real world which will then be developed, but they can view and visit its virtual version ahead of time.
In some ways, entering the metaverse is like finding a habitable new planet. Few flags have been planted, huge value can be created, and the potential appears limitless. This is a unique time to understand and embrace the possibilities of real estate’s virtual future.
Ranked as a top producer at ONE Sotheby’s International Realty, Michael is one of South Florida’s most distinguished and innovative leaders in the luxury real estate industry. He has over $174M in closed and pending sales year to date, taking the title for the #1 sales agent in the highly sought-after community of Pinecrest. Humble and well-connected, Michael leverages more than 21 years of extensive knowledge of Miami’s investment opportunities, widespread market knowledge, digital advertising, marketing expertise, and profound negotiating skills to close record deals. Born and raised in Miami, Michael is proficient in both Spanish and English.