Virtual real estate speculators notch another record deal

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

National /
Dec.December 01, 2021 09:30 AM
Virtual real estate speculators notch another record deal

Decentraland, by the investment firm Republic Realm

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.

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.”





    Related Articles

    arrow_forward_ios
    Eric Gordon
    Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
    Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
    Big Tech locations in NYC
    MAP: Here’s a look at all the Big Tech locations in NYC
    MAP: Here’s a look at all the Big Tech locations in NYC
    What will proptech look like in 2019 and beyond?
    What will proptech look like in 2019 and beyond?
    What will proptech look like in 2019 and beyond?
    (iStock/Illustration by Kevin Rebong for The Real Deal)
    NYC investment sales hit multi-year peak to end 2021
    NYC investment sales hit multi-year peak to end 2021
    Tax assessments rise 9%, signaling higher bills for landlords
    Tax assessments rise 9%, signaling higher bills for landlords
    Tax assessments rise 9%, signaling higher bills for landlords
    From left: Ryan Johnson and Jeff Berens, co-founders of Culdesac, in front of a rendering of Culdesac Tempe (Culdesac, iStock)
    Startup that wants to build car-free cities raises $30M Series A
    Startup that wants to build car-free cities raises $30M Series A
    From left: Stephen Schwarzman, chairman, Blackstone; Barry Sternlicht, chief executive officer, Starwood Capital Group (Getty Images, Brookfield Asset Management/Illustration by Steven Dilakian for The Real Deal)
    Blackstone, Starwood to pay $1.5B for WoodSpring Suites properties
    Blackstone, Starwood to pay $1.5B for WoodSpring Suites properties
    Keith Powers, Democratic District 4 representative on the New York City Council, in front of 45 East 45th Street (Getty Images, The Roosevelt Hotel, iStock/Illustration by Steven Dilakian for The Real Deal)
    Local lawmakers aim to landmark shuttered Roosevelt Hotel
    Local lawmakers aim to landmark shuttered Roosevelt Hotel
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...