Whether you understand it or not, the metaverse is tipped as the next technological change for office buildings and commercial real estate at large. The metaverse – in simple terms the bridge between physical and digital spaces – is early in its evolution but already altering existing business models and creating new ones. It is such a big deal particularly in social and retail realms the likes of JP Morgan, the largest bank in the United States, has joined those on the front foot.
In February this year, the leading financial institution became the first bank to jump into the metaverse by investing in the creation of Metajuku, an experiential shopping district located within the metaverse social platform Decentraland (Welcome to Decentraland). This platform was spearheaded by metaverse investor and developer Everyrealm, (Leaders in metaverse innovation and development | Everyrealm) which is aiming to be one of the leaders in the metaverse world. Decentraland also features another digital retail space MetaMall, in which digital retail stores have been available for lease since June when Everyrealm appointed New York commercial brokerage firm Avison Young the exclusive agent for leasing its slices of digital retail real estate. MetaMall offers six floors of experiential retail space including three available for lease.
New frontier
Leading commercial real estate firms are also turning their attention to the metaverse. CBRE’s Head of Digital & Technology, Pacific & Singapore, Sue-Lin Tin, told commercialpropertyguide.com.au the company will soon take its first steps toward this new frontier.
“In line with many of our peers, CBRE is currently evaluating multiple use cases in emerging technologies including the metaverse, as part of our overall enterprise strategy,” Ms Tin said.
“For instance, our new London headquarters Henrietta House will soon have a new virtual reality environment to showcase the property’s ESG features via physical, digital and human interaction.”
What is the metaverse?
The term first came about when author Neal Stephenson dubbed the 3D virtual world in his 1992 novel Snow Crash a “metaverse”. Stephenson’s 3D world inhabited by avatars has now stepped straight from the page and into reality. Consumers can now have a presence in multiple virtual worlds where they can buy goods and services, from fashion to art or land, socialise, attend concerts and sporting events, work and more. The metaverse brings the worlds of social media, multiplayer games, apps and the like into one place. JP Morgan forecasts the emergence of multiple digital worlds that will embody the metaverse concept, accessed by such means as virtual reality headsets and other artificial intelligence tools. It will in turn create opportunities for businesses to reach greater audiences in a more cost-effective way not to mention offer great scope for selling and leasing digital real estate and lending (yes, metaverse mortgages now exist). Blockchain technology will be integral to the workings of metaverse worlds as it allows cryptocurrency to be used for everything from voting on governance of a digital world to purchasing nonfungible tokens (NFTs).
Innovation and change
A leading proponent of the metaverse and its potential impact on CRE is Jeremy Bergstein, an expert in technology and omnichannel retail trends. Mr Bergstein hails the metaverse “the largest innovation and change” that CRE will see this generation and believes the industry needs to jump on board fast.
“We are seeing a pervasive, persistent layer of 3D digital experiences and information overlaid onto our physical world,” Mr Bergstein explained. “These experiences are springing to life in our public places as art projects and video games – and soon they will rapidly move inside of our buildings.
“Whether these are immersive games, step-by-step guided navigation, 3D instructions for fixing HVAC, or exciting brand media promotions, our near-term metaverse is likely a universally accessible, integrated world of digital value embedded into our properties and not a ‘sit at home and wear goggles’ video game.
“It is up to building owners to make sure they do not let this transformation be solely owned by technology giants. Commercial real estate missed the e-commerce revolution. It must not let this happen again.”
Potential within
CBRE forecasts that using metaverse technology to create a digital office building could allow greater global collaboration to enhance networking and even hiring opportunities. It could also be used for education, training, and virtual ‘face-to-face’ customer service and sales. Already, metaverse developers are offering productive assets or experiences on top of virtual land including leisure venues for virtual social experiences like conferences, exhibitions, concerts and trade shows. Virtual fashion shows are being designed to complement the virtual retail experiences.
Mr Bergstein says any doubters should note that online shopping was once seen as a fad, and that the metaverse cannot be ignored and is here to stay. “Call it the metaverse of real estate if you like, but this transformation will happen on our properties and owners and operators must capitalise on this shift and own their “digital square footage”,” he said.