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Led by New York-based hedge fund, investment in virtual reality property could encourage buyers who are daunted by red tape to make a deal
Cushman & Wakefield and the real estate investment firm Level Five have put $43m (£29m) into a 5,000-acre parcel of virtual land called the Metaverse, sparking hopes that a virtual real estate boom could help many a buyer.
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The deal is the latest instance of investors seizing the opportunity to profit from an explosion in virtual reality technology.
Level Five became a pioneer in virtual reality after introducing what was then the world’s first consumer headset a decade ago and now has 13 million headsets in use worldwide. The Metaverse consists of a collection of mixed reality environments that allow consumers to explore, engage and transact in mixed reality environments with their virtual identity.
“Cushman & Wakefield looks to enhance knowledge sharing, create opportunities to optimize clients’ real estate portfolios, and allow its clients to use Metaverse to offer a unique service to their clientele in a way that is difficult to currently achieve,” Cushman & Wakefield said in a statement.
Developers are entering the market with offerings that tie virtual reality to consumer goods. Last year, for example, the virtual entertainment company Activision Blizzard created World of Warcraft, the world’s best-selling online game, to appeal to young people using virtual reality goggles.
Cushman & Wakefield, the biggest commercial real estate brokerage in the world, is one of the top companies to work with Level Five on Metaverse technology. Level Five has been able to charge more for its services because of the Metaverse, which is being used by Cushman & Wakefield and other companies, Level Five’s chief executive Filippo Mazzotta said.
Level Five has recruited team members from top banks and law firms to use its technology to help gather information about a property and to decide if it should be bought.
The Metaverse is part of the $50bn global physical world-transaction space and the technology is helping some investors secure the best price for real estate.
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The investment comes just a week after Time Warner chief executive Jeff Bewkes said one of his strategies for the company’s new media spinoff will be to seek out business opportunities in new ways.
Cushman & Wakefield has handled as much as $300bn in transactions in the real estate markets of the largest global economies.
Virtual reality will never replace location-based services and travel, but for people who can’t afford a new apartment or want to plan their next vacation, it could be one of the best ways to experience a property, said Kent Jarrell, executive managing director of Cushman & Wakefield.
Other virtual worlds include Yuthy, a nature preserve in the Swiss Alps, which opened last month, and the gaming world Epizoom, which is making a virtual reality version of the 1960s sci-fi TV show Battlestar Galactica, first created by Soviet scientists.