Virtual Real Estate

David Goldsmith

All Powerful Moderator
Staff member
I confess that at this point it still looks to me like some large scale scam, but perhaps someone will explain it here in some meaningful way.

Virtual real estate speculators notch another record deal​

The $4.3 million purchase in The Sandbox almost doubles last week’s record​

The number of virtual real estate deals is rising as quickly as their real-world value.
Republic Realm, an investor and developer of virtual land, paid $4.3 million on Tuesday for property in The Sandbox, a popular metaverse oriented toward gaming that launched this week after four years of development, according to the website NonFungible.com.

That easily tops the $2.4 million that Tokens.com, which facilitates investment in digital assets, paid for an estate last week in Decentraland, the other dominant metaverse. Toronto-based Tokens is also building an 18-story skyscraper there to be leased for meeting, events and advertising space.
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Some 4,400 sales, valued at a cumulative $70.6 million, took place in the past week in The Sandbox alone.
It may be too soon to say if the speculative frenzy surrounding digital real estate — conceived by futurists and crypto specialists as the mall, playground and meeting place of the future — is a bubble or the start of a whole new asset class. Virtual land within many emerging metaverses is still significantly underdeveloped.
Republic Realm will partner with Atari, the seller and one of the earliest and largest landholders in The Sandbox, to co-develop the property, which includes several parcels, including a 24-unit-by-24-unit estate that’s among the largest in the virtual world. Each one-by-one plot is the real-world equivalent of 96 meters by 96 meters in length and 128 meters in height.

Republic Realm, perhaps best known as the creator of the Fantasy Islands NFT project, a luxury, master-planned real estate development in The Sandbox, doesn’t yet have firm plans for its new purchase. Janine Yorio, co-founder of the company, said any project will probably be aimed at play-to-earn games in which players compete for cryptocurrency.

Yorio’s company also developed a shopping mall in Decentraland called Metajuku, where it currently leases space to digital-only fashion brands DressX and Tribute Brand. Rent is based on a percentage of sales of NFTs such as digital wearables.
“People have forgotten that the metaverse has to be entertaining,” Yorio said. “It’s not just about making money. It’s about making content that makes people want to come back over and over and over again, like social media does.”

Before venturing into financial technology, Yorio spent several years as a portfolio manager at NorthStar Realty Finance, where she specialized in hospitality. Building an entertainment venue in the metaverse is like building a great hotel, she said.
“It’s not enough to put a pool in a bar. You have to have events, the right music, the right people showing up, and designers that make you feel cool,” she said.

Digital property has attracted more than just gamers and the crypto rich. Hedge funds, family offices and other traditional real estate market investors are also scouting the market, Yorio said. They typically find the metaverse easier to understand than crypto finance.
“There are so many crypto projects, it’s very hard to figure out what their business model is and why the token should be valuable,” she said. “This is much easier for people to wrap their head around.”
 

David Goldsmith

All Powerful Moderator
Staff member

Douglas Elliman’s Top Brokers Are Selling Luxury Real Estate in the Metaverse​

Tal and Oren Alexander, the brothers who became famous for closing megadeals in their early 20s then moved onto the biggest deals ever in their early 30s — they represented Ken Griffin when he bought that record-setting $238 million penthouse at 220 Central Park South in 2019 — recently announced that they’ll be developing and selling luxury real estate in the metaverse. That is, in virtual reality. It’s all imaginary construction; it can’t be lived in but exists only to be bought and sold and conspicuously consumed. Which sounds about right.

Like others in the moneyed Miami set, Oren already invests in crypto, and the brothers and everyone else with money and/or hustle seem to be trying to get rich(er) off NFTs and the metaverse right now. Mark Zuckerberg is falling all over himself to get in on and/or control every piece of metaverse action. And people are spending real money, or at least “real” “money,” to buy virtual yachts. Presumably, they will also spend upward of half a million dollars to own virtual mansions?

The Alexanders certainly seem to think so. The brothers have formed a partnership with Republic Realm, a metaverse developer that recently paid $4.3 million for virtual property in the Sandbox, one of the more popular metaverses. (It also owns a 259-parcel virtual estate in Decentraland that it bought for about $900,000.) “We want to just focus on trophy properties in the various metaverses,” Alexander told the Real Deal. This will take the form, according to Republic Realm, of an “architecturally significant master-planned community.” Which sounds a little (or very?) depressing.
Real estate has always been about status and shelter, skewing increasingly toward the former as one moves up the economic ladder. Speculators like Republic Realm and the Alexanders are banking (literally) on the fact that you can take the shelter piece out of the real-estate equation altogether, leaving just speculation and status. And the brothers, who have always made a point of living as their high-flying clients like Kanye West and Tommy Hilfiger do (a recent Instagram post shows Oren holding up a man-size tuna he spear-hunted in French Polynesia), seem to have a good read on the buzzy elite. “Oren and Tal have a knack for being at the right event during Art Basel, at the right camp at Burning Man, and at the right party at the Oscars,” Jay Parker, chief executive of Douglas Elliman’s Florida brokerage, once told the L.A. Times.
It’s also unclear what, if any, actual money the Alexanders are putting down to develop virtual properties with Republic Realm. So why not? It may all be a bubble of course, but people can make a lot of money off of bubbles before they burst. And while many have looked to the dream of the metaverse for its utopian potential over the years, the way things have gone with the internet has tamped down that idealism in favor of more practical considerations, like not letting Facebook, or Meta as it’s now called, control everything. The rosier visions generally involve people owning their own avatars and content such as, say, NFTs. “The thing I really care about is that you as an individual own objects. Property ownership is a tool. It works. It brings financial incentives,” Kayvon Tehranian, the founder of a marketplace for NFTs, told the New York Times earlier this year. That wasn’t dystopian, he maintained, just realistic. “We’re still talking about human nature, which is greedy and selfish.”

 
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