The Metaverse makes sense to everybody. Correct? No, not at all.
In fact, this concept of an immersive virtual digital world has mostly gone over with a thud. As Facebook CEO Mark Zuckerberg struggles to fend off lawsuits and convince the world (as he tried when speaking to investors in July 2021) that he should lead what Precedence Research projects to be a $1.6 trillion market by 2030, we are seeing different visions take shape. In its place we are seeing the emergence of something that is far more exciting, that possibly represents the largest innovation and change that commercial real estate has seen in a generation.
We are seeing a pervasive, persistent layer of 3D digital experiences and information overlaid onto our physical world. These experiences are springing to life in our public places as art projects and video games. Soon, they will rapidly move inside of our buildings.
Whether these are immersive games, step-by-step guided navigation, 3D instructions for fixing HVAC, or exciting brand media promotions, our near-term metaverse is likely a universally accessible, integrated world of digital value embedded into our properties and not a “sit at home and wear goggles” video game.
It is up to building owners to make sure they do not let this transformation be solely owned by technology giants. Commercial real estate missed the e-commerce revolution; it must not let this happen again.
The Metaverse of Real Estate
Call it The Metaverse of Real Estate, if you like, but this transformation will happen on our properties and owners and operators must capitalize on this shift and own their “Digital Square Footage.”
As with any universe, the metaverse is far reaching, limited only by the imagination of those operating within it. Any discussion of how it can be applied to physical real estate is complex. But one thing is clear: the metaverse isn’t going anywhere. Remember those people who thought online shopping was a fad? The question is how this new tool can work for the “real” world.
This article gives a broad overview of the metaverse’s potential to benefit physical property owners and for managers to discover what is possible and what questions to ask to make their physical buildings more efficient and profitable — and create better experiences for their tenants.
What is the Opportunity?
We can extend the reach, utility and profitability of our buildings by layering on services that create new value. These digital services are embedded in and around our physical properties.
Opportunities at this digital core of our properties are focused in three sectors that either open new revenue opportunities or help to make properties run better:
1. Visitor/Tenant/Consumer Experience — Better experience drives productivity, engagement and ultimately greater profitability as each visitor spends more time and money onsite. Examples include augmenting property concierge applications and loyalty programs with layers of information along a visitor’s journey to drive more sales.
2. New Media Revenue Platforms — Perhaps the greatest opportunity for new revenue lies in a new and unlimited “metaverse” of new media experiences to offer to brands and businesses. Imagine embedding promotions throughout a property, packaging up and selling new services in situ or new advertisements overlaid in digital? Done properly, the inventory is unlimited, three-dimensional and incredibly profitable.
3. Property Productivity/Environmental Sustainability — This is perhaps the most critical of all; our next decades will see massive revision in building’s sustainability and efficiency saving operators money and creating more productive properties. Connecting with service calls, collaborating with other technicians and sharing efficiencies and efficiencies will, hopefully, create better outcomes for our building’s energy future.
These applications make up a profitable “layer” available to our building’s inhabitants. This is our “Metaverse for CRE,” and we must seize this opportunity before technology and ad networks decide they will serve up ads in 3D in our buildings.
Why the Metaverse?
We are not discussing games and non-fungible tokens (NFTs) in your office lobby. We are discussing meaningfuldigital interactions layered on top of your physical property. Yes, it will have NFTs; yes, there will be digital goods and services.
For consumers, it will give us an exciting layer of embedded promotions, loyalty-driven offers, contextually aware games and contests for venues.
For owners and operators, it will give us greater insight, new interaction with our spaces, new revenue platforms and massive amounts of new data.
The Metaverse of Efficiency
This metaverse can simultaneously mean many things. For owners, operators and facility managers, there is a world of business-to-business applications awaiting that will integrate layers of live data showing how to improve environmental conditions in a space in real time.
This “Metaverse of Efficiency” will help create a more efficient, responsive property, optimizing facility management and providing a layer of smart information for asset operators.
Is this “The Metaverse?” It surely is; this is simply a business-level Metaverse of Efficiency where the end user is a facility manager optimizing repair times in a building or a general manager doing a scan of vacancies and tenant traffic flow.
It is commonly referred to as Smart Infrastructure, seamlessly integrating digital intelligence into physical spaces; it is time to put this in place. While this is brand-new technology, builders, developers and operators will find it somewhat familiar. Despite its sophistication, it is relatively easy to understand and built in much the same way we are accustomed to building properties, from the ground up.
First, physical properties are scanned using Lidar, a technology that uses light in much the same way we use radar. A Lidar scan creates a Digital Twin, the foundation. This scan is then translated into a highly accurate digital architecture (this is no ordinary digital twin). Computer vision helps identify and measure spaces, artificial intelligence makes our spaces “smart”, and a network of IoT-controlled devices integrates into the space. Once this is in place, we can layer applications, services, value and so much more on top.
On top of these accurate models and maps we build integrated IoT endpoints for all appliances, and pervasive 5G WIFI for speed and delivery.
Each and every one of our end users is already armed with mobile devices and an understanding of how to use this technology. Very soon, glasses will arrive and this technology will be pervasive, unavoidable and capitalized on, everywhere.
This is not rip-and-replace software; this is capital infrastructure for the future.
When Will All This Happen?
I spoke with a mall owner several months ago who reminded me of all the successes and failures technology has served up over the past. He also was very enthusiastic about the promise of this “Metaverse for Commercial Spaces” because it actually seamlessly fuses with the space.
A complete digital infrastructure married to the physical property will be in place for generations. Something like this could finally be a great fit for the business and provide real value. It is obvious that our properties and occupants are headed in this direction. I would like to offer up a few data points and facts:
1. Our Buildings are becoming Digital Assets — The digital twin market is expected to grow from $6.9 billion in 2022 to $73.5 billion by 2027, according to Markets and Markets; it is expected to grow at a CAGR of 60.6% from 2022 to 2027. Soon all assets will have this Digital Twin; how will this be monetized?
2. Augmented Reality is officially an Embedded Behavior — According to a HootSuite blog, augmented reality (AR) functions are a major part of daily Snapchat usage. In an overview for investors, Snapchat claimed that over 200 million (or 63%) of the platform’s daily active users engage with AR features, like filters, every day. What was once thought of as innovative cutting-edge behavior is now ingrained into everyday lives.
3. The Drive to Monetize Experiences Everywhere is Already Underway —Mobile AR ad placement will grow from an estimated $1.36 billion in 2020 to $6.68 billion in 2025, wrote Marketwatch in January. Tech giants and media networks are already at work monetizing “The Digital Square Foot.”
The Road Ahead
Our Built World had the original direct interface with its inhabitants on a daily basis. We were the original owners of our occupants’ bandwidth. It was compulsory that they spend time with us. We have seen that occupancy, traffic and crowds are not inevitable regardless of the location.
It is time we take back some of our “screentime” with our visitors. To do this, we must deliver more value, more experience and more productivity for our spaces.
After many false starts I can definitively say that I do believe the digital square foot for our physical spaces is being constructed right now and there is a world of opportunity it will uncover.
Photos courtesy of The Science Project