Real estate in metaverse

Not a troll post I promise.

I have seen a lot of posts on insta about crazy property prices in the metaverse, facebooks virtual reality, and was intruiged by the idea of RE firms branching out into virtual real estate. A few friends of mine in brokerage are already looking at opportunities to open a platform for speculating in virtual real estate. Can already imagine Blackstone owning half the land there in a few years lol. But seriously could this be part of REs future or am I just sleep deprived?

 

How did you determine 20x appreciation? First time I've looked at Sandbox properties and they don't have prices listed, just a blind bid system. 

Just had my trade dispute rejected by Schwab for a loss of 35k. This single issue alone should be a gigantic red flag to anyone who trades on their platform. If they have a system error, and you do not video record your trading (they actually said this), they will not honour their fuck up. Switching everything away from them. Fuck this company.
 

Would be best to google, Im no expert either but partially you own and live in it in the metaverse so its not completely useless, some have great views and perhaps something close to resembling the "prestige" of owning a large apartment overlooking central park for example. Part of it also speculation, what value do NFTs hold? none, yet some are valued at millions so thats a big part here as well.

 

The same thing you can do with a piece of Art. Admire it, collect it, use it to launder cash.

 

Republic Realm and other groups are already pursuing Meta RE - I'd expect this to get more noise over the next year. Currently, it's super speculative because the worlds that are cool now are likely not going to be cool in 5-10 years. There's also significant currency risk because they run on various cryptocurrencies which fluctuate significantly. 

Republic Relm Link

 

Had a look into this not too long ago, the developer in me wanted buy some cheap ransom strips (or pixels?) in Decentraland/Sandbox but came up short!

There is definitely something to be had with RE in the metaverse but like, anyone can just create a new more popular one. They say they are not going to create anymore land in the ones already established but they could easily do a 180 on this and it's not as hard as doing some land reclamation in real life...it is just a switch they can flip...hell they can have floating or subterranean cities if they wanted!

I wouldn't be quick to invest but sure if I can side hustle my RE services in there then why not!

 

I got bored and somehow ended up on Decentral Land, there were too many servers and I could never find my friend but someone gave me like 5k of the currency. Immediately spent it on Blackjack and an eHooker then logged off.

I hear about it more and more now and wonder wtf happened when I logged in and how rigged that casino was, the game is too janky/server crashes bad graphics/impossible to find anyone you know for me to believe there is any value there.

 
Most Helpful

In the standard Monocentric City Model, a residential property's value is the sum of three components. Component A is the baseline value of the land for non-residential (agricultural, recreational) uses. Component B is the structure value: replacement cost minus depreciation. Component C is the location value, which is a function of transportation costs (defined broadly to include both financial and non-financial costs). People will pay more for locations where the cost of travel to the CBD is lower.

in the Metaverse, the amount of land that could be generated is effectively infinite, which implies that the Component A value of land will approach zero. 

Buildings in the Metaverse are made of bits and can be copied and pasted instantaneously. That implies that Component B value will approach zero.

And the transportation costs in VR are also zero, since you can instantaneously move from one place to another. Which means Component C is zero too.

Essentially, the value of real estate is a function of the constraints imposed by physical reality; remove these constraints and real estate has no intrinsic value. So any nonzero property pricing in the Metaverse would come from fashion or speculation, or by the creators of a VR world reimposing certain constraints from the physical world within the VR world, and people choosing to accept those constraints and participate in the world.

 

Great analysis but its missing the point. The value of the digital real estate is dependent on the value from the advertising that will be on the land. That is why FB wants to buy up the metaverse - it has  nothing to do with the value of real estate in the traditional sense, it is all about advertising Coca Cola brand for example near a popular virtual gaming destination. 

 

I mean, theres a lot of speculation in the real world too. Your A, B and C factors determine that its impossible for property to have the value zero but in theory its possible to have anything above zero such as $1 and while that event of that is unlikely, you take on a certain risk and u get a reward correlated to that. Same here except the property can be valued at 0 and the likelyhood of it reaching these low values isnt nearly as low as in the real world, the question now is does the reward match this risk? Guess we dont know until the opportunity is past but if its anything like crypto or NFTs then ye there seems to be a tremendous upside. Thanks for the input tho!

 

Thinking of virtual RE the same as actual RE from a valuation standpoint isn’t the best way to look at it. Bitcoin shouldn’t have a value as a currency in the traditional sense, yet it does because it has perceived value.

People can create an infinite number of new cryptocurrencies but the only value they hold is the perceived value those who hold them (or those who want to hold them) have. The same thing can apply to virtual RE.

 
Funniest

I can’t get past the platform risk. Unlike tangible real estate where it’s not like we can infinitely replicate Miami Beach, you can online. I’d rather just buy tokens of the underlying blockchains like ETH and wait. I’ve gone on some of these platforms and they look terrible. Someone bought a virtual mall on Decentraland and no one has gone to it, so they successfully replicated the death of retail online

 
acardboardmonkey

I can't get past the platform risk. Unlike tangible real estate where it's not like we can infinitely replicate Miami Beach, you can online. I'd rather just buy tokens of the underlying blockchains like ETH and wait. I've gone on some of these platforms and they look terrible. Someone bought a virtual mall on Decentraland and no one has gone to it, so they successfully replicated the death of retail online

LOL. Effectively replicating the death of a certain portion of an industry in flux online like that is impressive.

Honestly, I don't think anybody knows how to value it, but a lot of people think it has value--for what? IDK.

YMMV, and I've been bearish on bitcoin since well before $10k, so what do I know?  I will promise you that it's going to keep going up....until it doesn't.  "The market can remain irrational for longer than the rational investor can remain solvent" is a great quote for here.

The only difference between Asset Management and Investment Research is assets. I generally see somebody I know on TV on Bloomberg/CNBC etc. once or twice a week. This sounds cool, until I remind myself that I see somebody I know on ESPN five days a week.
 

Gonna need a whole lotta intellectual property lawyers soon

 

I'm going to wax philosophical on this one. This entire concept makes no sense to me, but I'm admittedly 32, so probably just too old-fashioned to understand how something that does not exist is also real estate. It's kind of like selling an invisible piece of art - someone did it, but that speaks more to the stupidity of the buyer than some intrinsic value in something that, again, does not exist. I think this absurd blurriness in peoples' lives between the real world we are a part of and images on a computer screen speaks to a collective delusion. Maybe a lot peoples' real life sucks so much they decide to create a fake identity on the internet? Money can certainly be made by playing off of delusional peoples' insecurities, but again it's just so weird I don't want to get near it.

 

Yeah, I get that, but the NYT website provides some sort of value to its subscribers. In other words, consumers will spend money on it to read (admittedly fake, I digress) news. The words on the website are not some abstract concept deigned to be "real estate," they are in fact a THING precariously associated with this real world. The stories do in fact reference actions that happened on top of actual real estate. There isn't a THING - a product or service - associated with "real estate in the metaverse." There is no logical connection between "metaverse real estate" and anything going on in the real world. Simply put, it's not real estate any more than any website is real estate. You own something that's made up - what entices people to value your "real estate"? Only once people value your real estate for some kind of product or service will they be willing to spend any money on it - and then it's just a monetized website, not a real asset. There is no market for invisible real assets any more than there would be for invisible oil or invisible food.

 

To quote Lucille Bluth, "I don't understand the question and I won't respond to it."

The metaverse(s) strike me as some dystopian-level tech for those that are not able to find that satisfaction in real life. Maybe that's the old pessimist in me showing but I doubt that buying up real estate within a platform that is entirely run by other companies will be a stable investment. Maybe this is also a naive take, but the financial risk seems to be huge because you do not necessarily have the legal infrastructure to back your investment. The metaverse company can make and alter the rules as it goes with no obligation to protect your virtual property rights.

 

I just don’t get the whole metaverse real estate hype…a major draw to investing in real estate is that land is finite. I don’t see how that can be the case in the metaverse.

Hot take - the metaverse is an adult version of club penguin.

 

Most of you (or at least the OGs) know I've been here for a while, and I still love real estate and what we do. Which is why I don't want to quit my job. I love building real shit.  

But I also love building fake shit and printing fake internet money. If you're still sleeping on crypto, NFTs, and metaverse land you must really hate making money and you're just rugging yourself w boomer views. I used to be in that boat and then realized I was a fucking dumbass. 

The returns are insane in the space, while we're fighting each other for 2x (maybe) over garbage podium wrap deals lmao. Stay woke and get with the times. Or have fun staying poor, whatever floats your boats. 

 

Similique asperiores similique minus. In eaque delectus quisquam minus illum ut consequatur. Quasi corrupti porro assumenda consectetur enim. Architecto sed tempora totam inventore. Necessitatibus in asperiores dignissimos sed reprehenderit facilis optio. Qui quia quisquam harum consequuntur ut saepe. Quos placeat quisquam provident.

 

Est nesciunt non sit non reprehenderit tenetur doloremque. Et possimus maiores eos est tenetur hic illo.

Consectetur unde est occaecati molestiae aliquid. Nulla totam sequi aliquam fuga quis delectus. Et voluptas non recusandae doloribus et aut quos.

Accusamus dolorem aut autem officia et in magnam. Vel recusandae ut totam vitae eum corporis. Est voluptatem molestiae consequatur illo ad tempora. Quisquam aspernatur est et voluptatem. Sit amet incidunt neque illo eius illo culpa. Qui repudiandae esse ipsa earum mollitia sunt.

Veniam et ut et nisi. Maxime eaque et vel sunt deleniti. In cumque alias et quam. Facilis iure saepe molestias aut nihil quo.

Not too high, not too low

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
kanon's picture
kanon
98.9
6
dosk17's picture
dosk17
98.9
7
CompBanker's picture
CompBanker
98.9
8
GameTheory's picture
GameTheory
98.9
9
bolo up's picture
bolo up
98.8
10
DrApeman's picture
DrApeman
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”