The Status of Metaverse Real Estate: What’s the Latest Development?

Remember the Metaverse? It seemed like a good idea at the time.

It all started in 2021, when Facebook rebranded to Meta and pledged $10 billion to build technology that could make reality totally virtual. You’d use their robotic hand and wear their high-tech glasses and — most relevant to real estate — work and hang out in not-physical spaces.

“The next platform will be even more immersive — an embodied internet where you’re in the experience, not just looking at it,” Mark Zuckerberg wrote in 2021. “We call this the metaverse, and it will touch every product we build.”

Never mind that other tech behemoths had failed to introduce their own “mixed reality” tech years earlier, Zuck’s big announcement kicked off the next fad. Roughly two months later, Microsoft struck a $69 billion deal to buy gaming company Activision Blizzard with plans to stake its claim on the metaverse, and by the summer, Apple was preparing to launch a reimagined headset backed by new software tools and stacked with content developed by Hollywood directors.

Real estate ventures soon followed.

Search the word “metaverse” in The Real Deal’s archive, and you’ll find no shortage of hyped-up headlines: A Miami brokerage peddling virtual mansions; a Canadian investor launching the first metaverse REIT; a management company hosting the famous New Year’s Eve ball drop in a virtual replica of a Times Square building.

But like most fads, this one didn’t change everything. The hype died, leaving casualties in its wake. Apple rolled out its headset at $3,500 a pop, but few bought it. Disney and Microsoft laid off employees working on metaverse projects, while Microsoft shut one of its virtual reality worlds.

And no one is talking about shelling out big bucks for a home in the metaverse in the real estate chatter anymore. Instead, they’re writing off their losses.

Just a few months ago, the parent company of residential brokerage eXp Realty discontinued its metaverse arm, known as Virbela, and in November, sold it back to its founders, Alex Howland and Erik Hill, in exchange for a measly $252,100 — the cost of their canceled severance payments, according to a filing with the Securities and Exchange Commission.

“The worst part is that people are buying real estate in these places,” investor Mark Cuban remarked about the metaverse in a 2022 YouTube video. “That’s just the dumbest s**t ever.”

“Did I say it was dumb? That’s not strong enough.”