This article first appeared in The Advisor in May 2023, a publication sponsored by Colliers Utah.

For much of industrialized history, real estate has been a tangible, in-person affair. Its purpose is made clear in the name—it’s “real,” something that takes up physical space around you. But as technology moves forward and the digital world becomes an accessible space of its own, companies are starting to question how to adapt to the new possibilities in front of them.

These questions became more relevant after Facebook rebranded itself as Meta in late 2021 with the goal of highlighting its new product, Metaverse. Through this VR social platform, users would have the chance to connect to a digital world via an avatar and interact with others.

Tech companies are exploring a brand new frontier in digital connectivity that has been likened to the early days of the internet when many saw the possibilities involved even if they hadn’t been realized yet. And while this VR world is still being built, the real estate market is already very real and growing each year. One report produced by global research firm Technavio found that the real estate market in the metaverse would grow to $5 billion by 2026.

Now, companies need to be proactive about major digital changes as they take place and keep an eye on future opportunities. Colliers, one of the largest international leaders in real estate services, has been tracking these kinds of questions for years.

“Without a doubt, the metaverse is going to take off,” said Colliers’ managing director of occupier services in Asia, Abhishek Bajpai, in a video posted by the company last year. “The exact direction it takes will remain undetermined, but the possibilities are endless.”

Hannah Jeong, Colliers’ head of valuation and advisory services in Hong Kong, put a finer point on just what is offered to companies: a chance to explore and grow their businesses digitally in conjunction with what they offer in real life. In the same video, Jeong said clients are asking her why the metaverse is special and what it has to do with their business.

“It’s a place where, no matter who or what you are, you can do just about anything,” she said. “Because virtual properties are easy to create, experiment with and upgrade, whether you’re a developer, landlord or occupier, you can explore the metaverse to complement whatever you offer in the physical world.”

But the process of creating an online digital world that can function as an entirely parallel universe—complete with commerce, social interactions and real estate—existed before the metaverse.

Second Life, for example, is a program by Linden Lab that has run since 2003 and offers users the chance to create entire digital personas, build shops in town squares and sell digital assets for real-life money. While this has fallen more into the gaming category over the long run (despite the creators insisting that it is not a game because it has no “manufactured conflict”), it has failed to reach widespread appeal and acceptance.

Once Facebook’s parent company, Meta, made its announcement in 2021, the business world took note of this change. One key difference is that Second Life and many other virtual reality worlds like it are more or less managed by one player, a digital space created and set up by one company. The metaverse will be something different—Meta is attempting to build it, but it will be more akin to the internet itself: an interconnected space inhabited by many users and companies. Roblox and Microsoft, among others, have announced plans to also join in this vision.

“It’s a future beyond any one company that will be made by all of us,” said Facebook CEO Mark Zuckerberg in his keynote address on the topic.

Colliers’ national research manager for retail services, Nicole Larson, laid out in a study why companies need to be strategic about paying attention to these changes and the impacts they could have on business.

“Property owners who embrace the virtual world will enjoy new revenue streams, while those who choose to ignore it could potentially see their real estate assets depreciate in value,” Larson wrote. “The global billboard business is a billion-dollar industry. With augmented reality, any building in the world can become a canvas for media and host outdoor advertisements without being subject to permitting restrictions.”

She went on to note major international brands that are taking advantage of this kind of shift, including Nike, Ralph Lauren, Louis Vuitton, Tommy Hilfiger and many more. Even restaurants, she noted—though visiting one is traditionally an in-person experience—are exploring how to build their brands on the platform.

The underlying takeaway across the real estate industry is that the metaverse is neither irrelevant nor a threat to business in the real world. Instead, Colliers’ staff members argue, it has major implications for the future and opportunities to increase revenue for companies. For their clients, this can mean expanding their footprint by embracing digital sales online if they are a retailer or by building advertisements for their real-world offerings. Either way, companies should not be turning a blind eye to the opportunities available.

Anjee Solanki, national director for retail and practice groups at Colliers, wrote in a 2021 study that the metaverse would be a prime location for companies to expand their advertising, real estate and retail offerings.

“As the technology advances, retail developers partnering with their digital counterparts may expand their offering, replicating physical assets into the transactional-based immersive environment,” she wrote.

In a podcast on the subject with MIT real estate technology expert Steve Weikal, Solanki underscored the potential opportunities involved.

“There’s a whole economy around developing the real estate—you actually acquire the digital real estate in the town, whether it’s a fanciful made-up town or an actual digital version of, say, Manhattan,” Weikal told Solkani. “But there’s a system, a mechanism for you to acquire the land and to do the development. The same process that you do in the real world.”

Exemplifying the importance of metaverse opportunities for all kinds of businesses, Solkani noted the takeaway for retail brands in particular, envisioning a shopping environment that integrates our real-world malls with the convenience of online shopping.

“There’s an endless amount of virtual square footage to be created for all of us shopping fans to go into these shopping centers and malls and essentially shop 24/7,” she said.