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Last year, if you were asked what Gucci, The Walking Dead, Atari and Snoop Dogg had in common, you could have scratched your head forever. At the end of 2021, what they had in common was ownership of digital real estate in the metaverse and branding strategies so comprehensive that they leave less progressive brands behind. These each established themselves with no less than 75 plots of land in the metaverse platform known as The Sandbox. That equates to hundreds of acres in our physical world today.
Notables from a wide variety of industries recognize the real estate value appreciation aspect of the Metaverse and its fully immersive experiences that offer customers a new dimension to enjoy their favorite brands. It’s not just artists and TV productions that are flocking to the scene; hospitality companies such as Hong Kong-based Regal Hotel Group recently announced plans to build a digital green city named Meta Green in collaboration with the University of Hong Kong and focus on developing a respectful sustainable society of the environment.
Related: 3 Ways to Build Lasting Wealth in the Metaverse
The rise of digital real estate
The urgency to acquire these digital assets is nothing short of a code red rush. In January of this year, The Sandbox published another 156 plots of land which sold out in two seconds. Famous NFT giants Bored Ape Yacht Club have offered 55,000 title deeds for sale in their newly announced metaverse called Otherside. With no access to that land even in place for users, the acts sold out within a day, totaling $350 million in sales. With virtual land deeds soaring at this rate, your average investor is undoubtedly taking a second and third look at the metaverse, and an inevitable sense of FOMO is setting in.
The average home in Los Angeles has appreciated 15% from 2021 to 2022, while a plot of land in The Sandbox has appreciated 700% in the same time. The numbers are so staggering you’d think they were made up. Similar growth can be seen in Decentraland, such as a plot that sold for $1,900 in 2017 was sold this year for $14,460, marking a 761% appreciation rate. This amazing appreciation isn’t the only factor that makes digital real estate ownership more favorable, it’s also infinitely easier to manage. Our hypothetical investor, Jane Doe, just spent her life savings to replace the shoddy flooring in her Airbnb. With prodigious appreciation, zero maintenance, and zero property taxes, digital real estate may represent an economic opportunity we’ve never seen before.
Related: Five Things A Skeptical Metaverse Learned From Buying Real Estate In A Virtual Universe
The value of virtual land
Yet paying $2.4 million for real estate that you will only see on a computer screen is an unfathomable notion for most. For businesses, like metaverse groupthe business possibilities were so obvious that they set a record for the largest virtual land acquisition by purchasing a 116-parcel estate from Decentraland last november. With tenants like Forever 21 and Skechers committed to building virtual storefronts, their decision to develop land in Decentraland’s fashion district has proven to mimic real-world investment opportunities.
“Not only do we own valuable virtual real estate, but we also generate recurring revenue,” commented Andrew Kiguel, Executive Chairman of Metaverse Group. Even with one-time sales to the tune of millions in Decentraland, The Sandbox is still the the greatest metaverse based on transactional volume, while other competitors, Cryptovoxels and Somnium Space, are still vying for supremacy.
What about the location? Could this still be a driving factor when evaluating metaverse real estate, or are we just pulling numbers out of a hat? Many argue that since you can move from one end of a metaverse to the other with the click of a button, location has no bearing on land value. However, Sam Huber, CEO of the metaverse advertising agency called Admix, says, “Bringing a big brand or a big project increases the value of the land around it.“
How could that be wrong when the land next to Snoop Dogg’s estate sold for $453,000 when you can buy land at the outer limits of The Sandbox map for much less? There seems to be a difference between investing in land next to Gucci and moving next to User0017490 in the metaverse.
It’s clear that digital real estate ownership in the metaverse is taking off, so if you’re interested in joining Gucci, Snoop Dogg and more, don’t miss your chance.