They’re putting their money where their mouse is.
Two company heads are betting big that pixels in an imaginary place will end up being just as valuable — or more so — than real mansions on the Pacific coast.
Both Janine Yorio, co-founder of Republic Realm and Metaverse Group chief Lorne Sugarman told Insider this week that their recent multi-million-dollar purchases of “land” in the virtual world known as the metaverse is giving them a leg up on what could become a multi-trillion dollar market.
Sugarman’s team at Metaverse Group recently plunked down $2.43 million worth of cryptocurrency to buy an estate in what’s known as the Fashion Street district of Decentraland, an online, virtual-only environment where Sugarman says great things are bound to happen.
“We think the Fashion District purchase is like buying on Fifth Avenue back in the 1800s,” he told Insider.
Yorio said that Republic’s record-breaking $4.3 million purchase of land in The Sandbox metaverse “was the equivalent of buying a city” — and predicts the development that her team subsequently builds there will attract users accessing the world on their computers, phones and tablets.
“We want to buy land and build things on it,” she told the website. “The only way the metaverse becomes interesting is if there are things to do and people to see and places to go when you get there.”
The two CEOs say they aren’t investing blindly.
Sugarman has worked for 15 years as an investment banker, according to the website, and is using those skills to determine the value of land in the metaverse by running comps on different pieces of property.
Yorio, who worked as a real estate investment executive for a decade, said she also compares values, and, once these virtual worlds launch, will take into account statistics such as monthly active-user lists.
But for now, she’s relying on old-school valuation techniques.
“You interview the founders, you find out their pedigree,” she said. “If they’ve launched a massively successful video game in the past, obviously that’s a great sign.”
Big time real real estate players are also looking to the metaverse to see if money can be made there, and some think it is possible.
This week, Michael Phillips, president of Jamestown, which worked on such developments as Manhattan’s Chelsea Market, Brooklyn’s Industry City and Ghirardelli Square in San Francisco, told The Real Deal the virtual world will probably complement traditional real estate.
[Insider] — Vince DiMiceli