There are more than 100 million Google search results attempting to answer the question: “What is the metaverse?” Have you been wondering yourself? If you own, manage or market multi-family communities, it’s worth asking, just as others asked in previous decades: “What is the Internet?” and “What is social media?” Both have become part of our daily lives.
Facebook CEO Mark Zuckerberg was so bullish on this immersive 3D web platform that he renamed his company Meta Platforms Inc. after the metaverse in October 2021. He’s pulled back from his massive short-term investment of time, energy and money in the year and a half since then to mind his core businesses in a bearish tech market, but he still sees the metaverse as a long-term project. Should you? The answer is probably yes.
Real estate in the metaverse takes two forms: One is virtual real estate, letting people own and gather on properties that only exist in the online world. The other form is physical real estate that exists offline. While it’s hard to predict long-term value for virtual properties, particularly in the wake of a major crypto firm and bank collapse, offline communities have real-world value and a tangible presence that can be marketed in multiple online platforms—particularly to digital natives.
That is CRG’s clientele. The multifamily and student housing development and investment firm started investing in the metaverse three years ago, when COVID-19 kept prospective tenants from touring communities in person. Even now, notes Vice President of Leasing and Operations Louie Colella, many prospective lessees don’t have time to visit every prospective development. “It’s our job to deliver an experience where they can learn about our community in a fun, convenient and interactive way,” he noted.
CRG uses Matterport to create 3D virtual tours at numerous properties, Collella said. Having an international clientele that can’t always visit, the user-friendly metaverse tool helps prospective students not only tour the community but also experience what the apartment and amenities will feel like, he says.
The company is also using the metaverse to enhance tenant experiences after they’ve moved in. “We’re hosting virtual events, such as a cooking class or trivia night, to engage residents and create a sense of community at our properties,” Colella said. “These gatherings help residents feel like they are taking full advantage of the perks of living in one of our communities but give them the option to do so in the comfort of their unit.”
The firm is also harnessing the power of the metaverse to let prospective tenants experience apartments that are still under construction. “We’re now conducting interactive virtual tours using Oculus headsets, which have been extremely popular with students,” he declared, noting CRG is rolling the feature out in Reno, Nev., for the fall semester. “There is often a tight timeline between the completion of construction and move-ins, making in-person tours of the space nearly impossible, so the virtual marketing materials take on an even greater importance.”
One critical caution Colella offers is timing the development and launch of virtual assets: “If you create them too early, there could be changes in the design or layout of the building that aren’t reflected in the visuals,” he said.
Recent stumbles in the crypto and nonfungible token spheres—part of the metaverse’s popular funding mechanisms—may dull the early shine of this emerging platform, but, the platform isn’t dependent upon those devalued assets to market real estate that exists offline, experts say. Owners can still sell condos and lease apartments as they always have, but the metaverse can help make online exploration by future residents richer and more lead-generating.
Artificial intelligence and chatbots have been in the headlines lately, too, and the less-than-positive press could present another stumbling block to metaverse development, according to Colella. “They often do not correctly answer the user’s questions, and this can cause frustration, which is the last thing we want our residents to feel,” he observed. That may be a bigger issue for CRG’s non-student communities, though, since digital natives tend to be more comfortable and patient with emerging technology and less fearful of privacy issues.
Barriers to Success
In addition to potential NFT and crypto fail contagion, the requirement to use headgear to fully experience the immersive potential of the metaverse as it is today is a short-term barrier to the technology’s widespread adoption. But just as browsers made the Internet accessible to the world and smart phones made it mobile, new technological breakthroughs will likely make the metaverse more accessible to all without extra equipment. “Adoption might be seen as barrier, but once the hardware is at a level that people can use with ease, this technology will become part of our everyday lives,” predicted James Robert Scott, a research scientist and lecturer in the Real Estate Technology Hub at MIT’s Center for Real Estate.
Dave Marcinkowski, partner at Madeira Residential of Lubbock, Texas, and its technology firm Quext, thinks the metaverse will become a norm for multifamily communities in three to five years. “Real estate always lags behind with technology,” he explained. “It will be other industries that lead the way.” He sees the tech world heavily investing in this space. “They need to make it mainstream first,” he asserted. Then, multifamily communities will see the importance of being there, along with their other marketing and communications channels.
Marcinkowski is seeing growing curiosity among his colleagues, he reported: “Once you give them real- use cases that will save time, money and provide tremendous convenience they want to know more,” he shared, adding this is what younger generations expect.
As he mentioned in a Forbes.com article last August, Marcinkowski sees the metaverse benefitting multifamily properties by allowing prospective tenants to tour a property from another state or country with a community’s avatar guide; enabling new revenue streams from partnerships with retailers and moving companies to sell furniture from a virtual tour that has already been measured to fit the space; enhancing the property with virtual fitness services and clubhouse gatherings; and improving labor utilization, customer service and cost savings. Eventually.
He’s gotten his own virtual feet wet, too: “We actually have a property in the metaverse with our products in it,” he said. “This is the first step to all our other solutions we intend to do. I would call this a late 2024 or early 2025 initiative. The future is close, but we are still measuring its acceptance in years. This isn’t an ‘if’ question. It is a ‘when’ question.”
Scott sees sees Augmented Realty of “AR” (similar to VR but using real-world settings and cell phones rather than headsets) having significant long-term influence, giving marketers exciting new capabilities to reach potential customers. Prospective tenants and owners will use their device—cell phones today and perhaps glasses tomorrow—to learn about amenities, square footage, facilities, asking price/rent, availability, and mortgage qualification. (Here’s a video example of how this can work.)
Marketers will be able to create tailored ads that can show up on any building, targeting specific people based on their individual interests, he explained. Prospects can see the ad as they accept a job offer down the street or tour a nearby college. “Think of the movie ‘Minority Report’ where advertisements are specifically tailored to individual preferences as they walk along the street,” the professor added. Once someone has been successfully converted from prospect to lead, the majority will want to experience the property in real-life when possible before signing a contract, Scott observed.
“Searching for and leasing an apartment can be daunting, but we want to make it an easy, accessible, and fun experience,” asserted CRG’s Colella. It is also a way to differentiate your property in the market, he points out.
Jamie Gold, CKD, CAPS, MCCWC is a Forbes.com contributor, wellness design consultant, industry speaker, and award-winning author of Wellness by Design (Simon & Schuster, 2020).