Real estate sales are booming in the metaverse as investors are spending millions of dollars to acquire virtual tracks of land, according to a Yahoo Finance article  . What is behind this boom? How may investors gain exposure to the metaverse?
Sales Are Booming
Recently, sales of digital land have totaled in the millions. According to Yahoo Finance, one week of sales in late November 2021 totaled $100 million. What are some factors driving this boom?
Location, Location, Location
Imitating the physical world, location is crucial in metaverse real estate. The metaverse is made up of multiple virtual worlds. Demand and prices are highest in the most desirable virtual worlds.
Sandbox and Decentraland, two popular virtual worlds, saw sales totaling $86 million and $15 million, respectively, during that one week in November. As most virtual real estate transactions are conducted in cryptocurrency, one plot on Fashion Street in Decentraland sold for the equivalent of $2.48 million. In addition, one plot of land in Sandbox sold for a record $4.3 million. 
Creators of virtual worlds only create a finite number of plots. Decentraland has carved out 90,000 parcels measuring 50ft. X 50ft. As these plots are purchased, prices are likely to rise.
The Appeal of Digital Land
As the metaverse is built out, more people are joining online communities. As such, they may have a creative desire to express themselves by owning things in these virtual worlds, including land. In several instances, individuals are acquiring virtual “stuff.” This includes, but is not limited to, items used in online games. To store these things, users need digital homes.
Online Shopping and Events
Retailers are setting up virtual stores where individuals may purchase goods for both the digital and physical world.
Events are held in virtual worlds. Superstars such as Justin Bieber, Ariana Grande, and the Weeknd held concerts in virtual worlds.
Companies may use their digital real estate for advertising. Virtual world real estate is being snapped up as companies bet that more people will shop and attend events in digital spaces, thus driving up the value of digital land.
Becoming a Digital Landlord
A lot of companies are buying large tracts of digital space in hopes of renting it out to retailers or event planners. For example, they may construct a virtual mall and rent out stores within that mall. One firm is constructing an 18-story building with plans to lease it to lawyers and cryptocurrency exchanges.
As in the real world, zoning rules dominate the metaverse, dictating what can be built and where.
1 Bizouati-Kennedy, Yael, Metaverse Virtual Real Estate is Booming: What’s the Appeal?, Yahoo Finance, 12/3/21
2 Putzier, Konrad, Metaverse Real Estate Piles Up Record Sales in Sandbox and Other Virtual Realms, Wall Street Journal, 11/30/21
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