Office investors have had a rough time during the pandemic. It's been a whole on-again, off-again relationship between employers and in-office requirements (for the safety of workers, so this is not a criticism at all). Return-to-work dates continue to be postponed as new COVID variants emerge, the Centers for Disease Control and Prevention (CDC) recommends additional vaccinations, and schools open and close sporadically because of overwhelming numbers of teachers and staff out due to illness.
Although a fair number of employees were doing OK working remotely -- with PwC's 2021 US Remote Work Survey showing that 83% of employers and 71% of employees feel that remote work has been a success -- only 5% of executives thought company culture would survive in a purely remote environment.
Since that survey, the metaverse has become a whole thing, and real estate investors are eyeing the potential it holds. For office investors, the metaverse is an especially interesting proposition since it presents the opportunity for companies to have both in-office work and remote work at the same time. The metaverse represents a whole new evolution for office investors, and there are so many reasons to invest there.
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1. Office workers are reluctant to return to work
According to a FlexJobs survey conducted between March and April 2021, a full 65% of those surveyed said they'd prefer to work remotely full-time post-pandemic, and 58% said they'd find a new job if they were sent back to the office. This, of course, poses problems for those employers who want workers to have more of a real-world experience at work, especially since workers are difficult to replace.
The solution may lie in the metaverse. Employees can interact in the 3D worlds of the metaverse from the comfort (and safety) of their own homes, which has led many businesses to set up pilot offices there. A number of companies, big and small, are starting to construct metaverse offices, including PricewaterhouseCoopers and Prager Métis. Smaller companies without these kinds of budgets could benefit from prefab metaverse office spaces, both freestanding and those in office towers like the one being built by Tokens.com in Decentraland's Crypto Valley.
2. It's already working on a small scale
When anything is being built for the first time, it's important to test it on a small scale before investing significant resources into it. Whether that thing is a rocket car or an entire virtual world of work, small-scale testing helps demonstrate whether the concept will work or ultimately fail. eXp Realty has spent years as the primary test subject for work in the metaverse, with so much of its in-office time spent in the office platform Virbela.
Although office investors can't buy land or build rental units in Virbela, they can look to it as an example of how metaverse offices can work in places like Decentraland or The Sandbox. The appeal of offices in metaverse platforms that offer real estate for sale is how immersive they can become since others are also actively invested in growing the platforms and communities that support them. Employees can attend a meeting in their Decentraland office and later get together for happy hour at one of the platform's many recreational areas.
3. Clients are building in the metaverse, too
It's not just office occupants who are interested in metaverse space -- their clients are putting up big projects there, too. It's a whole self-feeding cycle that will increase the need for office space as more specialty offices that understand how the metaverse works will be needed to support companies that operate some portion of their businesses there.
Huge brands like Walmart are headed to the metaverse, but so are smaller ones, and you can be sure they'll need various consultants who, in turn, will need smaller office spaces that could be tucked easily into larger office buildings. Although bigger business-services companies are building their own structures, they're certainly not going to be the only money in the game.
Metaverse office space is unsexy but worth considering
Besides the unlimited potential for the creation of anything your heart may desire when it comes to office spaces (MCM office complex, anyone?), there's literally nothing particularly sexy about virtual office real estate. It's just as boring and uneventful as real-world office real estate.
But that's what we love about office investments, isn't it? They're boring, don't make much of a fuss, and retain steady lessees with decent cap rates. As far as real estate investments go, they're pretty much ideal. Add things like blockchain-based smart contracts into the mix -- where your monthly metaverse rent is automatically collected or the lease is voided -- and an unending appetite for ways to interact at work while working from home, and you've got a recipe for success. Sterile, unsexy, consistent, vanilla success.
But the thing is, in investing, sterile, unsexy, and consistent are the wildest things you can possibly ask for. Set it and forget it metaverse office real estate has massive potential for investors, especially those who get in sooner rather than later. The longer you wait, the more virtual real estate will cost and the harder it will be to score a premium plot.
