Currently, some of the promoters seem to be cryptocurrency trading companies.
It’s been close to 50 years since the rock group Queen asked the questions: “Is this the real life? Is this just fantasy?” in the classic Bohemian Rhapsody. Commercial real estate is trying to find some answers.
You can’t blame them in a buzzwordy world where the latest hot entry is metaverse. Graystone Company just announced that it’s created a separate division and budget to buy virtual property. Originally a move planned for Q4 2022, the company decided to move things ahead to February.
“We decided to move this project up to the 1st Quarter of 2022 as established retailers and brands like Louis Vuitton, Dolce & Gabbana, Gucci, Balenciaga and Ralph Lauren have been making inroads into the metaverse and the market has responded positively with steady growth,” the company said. “The newly established division will be actively working not only on acquiring and developing parcels in the Metaverse, but also seeking joint ventures and strategic collaborations with other companies that wish to market and move their product lines to the virtual platform.”
Graystone, by its own self-description, “has two distinct lines of business: (1) Bitcoin Mining; and (2) sale and hosting of Bitcoin mining equipment.” It isn’t a real estate company, although its president, Anastasia Shishova, claims “extensive experience” in the industry. The company is publicly-traded as a penny stock and its unaudited revenue for January 2022 of about $185,000 “already exceeded our revenues for our entire fiscal year of 2021.”
For anyone asking what the metaverse is, that’s an excellent question without a singular straightforward answer. As Merriam-Webster explains, “In its current meaning, metaverse generally refers to the concept of a highly immersive virtual world where people gather to socialize, play, and work.” The term originally comes from Neal Stephenson’s 1992 science fiction novel Snow Crash.
The specific term gained attention when Mark Zuckerberg’s corporate entity rebranded itself as Meta and he posited that the “metaverse is the next chapter for the internet.”
Visions of online communities’ power aren’t new, and they never were as inexorable as the hype indicated, whether for Second Life, virtual reality, or even early concepts like the stereoscope of 1838 or Sensorama in 1956 that tried to duplicate the experience of riding through a city. Head-mounted devices go back to the 1960s.
The use of virtual and also augmented (digital atop the real world) realities have expanded over time. But the line between the “next big thing” and yesterday’s flop is sometimes fainter than promoters and true believers convey.
Virtual real estate has been gaining some traction, according to a CNBC report, with some claiming that digital real estate prices have quadrupled or quintupled in the time since Zuckerberg rechristened the corporate brand. But investments are risky and those making the biggest predictions are often companies primarily engaged in cryptocurrency trading, not CRE.
Beyond whether this is more than a fad, it’s instructive to remember other sure tech things. For example, mobile commerce first got a lot of hype in the late 1990s into 2000. But by 2001, it was clear the concept couldn’t fly then because mobile technology wasn’t at a level to let it work smoothly for most people. It took at least another six years before first the iPhone and then other modern smartphones and tablets were available.
Perhaps the metaverse will offer killer investments for CRE. But it will take the time to see whether those taking the plunge will be the killers or the killed.