THE COMPANY that has spent more than $80 billion trying to persuade consumers to live in virtual worlds is now paying some of the highest rents on Earth for a very real building. Meta signed a ten-year lease with Vornado Realty Trust for a five-story, 15,000-square-foot townhouse at 697 Fifth Avenue — adjacent to the St. Regis Hotel — making it the social media behemoth's first permanent flagship store in Manhattan. The location, branded Meta Lab, will showcase the company's AI glasses and VR headsets in what Meta describes as an "experiential retail" concept.
The bet is not small. Rents in the Plaza District along Fifth Avenue between 49th and 59th streets run roughly $2,569 per square foot, according to CBRE, and asking rents on Upper Fifth Avenue jumped 17% in the first half of 2025 alone, per the Real Estate Board of New York. Meta already has 730,000 square feet of office space at the nearby Farley Building. With pop-ups in Las Vegas and Honolulu, a 20,000-square-foot LA flagship on Melrose Avenue, and plans for additional locations throughout 2026, the company is building a physical retail footprint that would have seemed absurd three years ago — when the corporate rebrand to "Meta" was shorthand for an all-in wager on the metaverse.
Through the looking glass
But this is no longer the same bet. Meta's strategic pivot is visible in every square foot of the new store. The company laid off more than 1,000 Reality Labs employees in January, shuttered VR studios, and has been steadily shifting resources from headsets to AI-powered wearables. Reality Labs posted $19.2 billion in operating losses in 2025 on just $2.2 billion in revenue, with cumulative red ink since late 2020 surpassing $80 billion. Meta's CFO has said losses will remain at similar levels in 2026, although Zuckerberg has suggested they may have peaked.
Yet within that ocean of losses, a surprisingly buoyant product has emerged. EssilorLuxottica, Meta's eyewear partner, reported selling over seven million smart glasses in 2025 — more than tripling the two million units sold in 2023 and 2024 combined. The Ray-Ban Meta line accounted for more than a third of EssilorLuxottica's growth in Q3 2025, and the glasses business is profitable in absolute terms, per the company's CFO. Revenue from the glasses tripled year over year in the first half of 2025, and the two companies are reportedly discussing doubling or tripling production capacity to as many as 20–30 million units annually. Meta's original Fifth Avenue pop-up, which opened in November 2025, was drawing between 1,000 and 1,500 visitors a day — an impressive conversion from curiosity to foot traffic along a corridor that sees some 32 million passersby annually.
The logic, then, is straightforward: you cannot try on glasses through a screen. Unlike VR headsets — which Meta has struggled to sell beyond hobbyists and enterprise buyers — AI glasses are inherently a touch-and-feel product. They need mirrors, not marketing decks. The Fifth Avenue store represents Meta's acknowledgment that its most promising consumer hardware category requires exactly the kind of old-fashioned retail presence that Silicon Valley has historically disdained (or left to Apple).
Still, the competitive picture is tightening. Google announced partnerships with Warby Parker and Gentle Monster to develop Gemini-powered smart glasses, and reportedly took a stake in Gentle Monster last year. Apple is widely expected to launch its own AI glasses by 2027, according to Bloomberg. Meta's head start — and its lock on the Ray-Ban and Oakley brands through EssilorLuxottica — is formidable, but not permanent. Whether seven million units of annual sales can justify $19 billion in annual operating losses remains a question that no amount of Fifth Avenue foot traffic can answer on its own.
For now, the company that once asked consumers to strap on goggles and disappear into a virtual office is instead asking them to walk into a very physical store, on a very expensive block, and try on a pair of sunglasses. The metaverse, it turns out, has a street-level entrance. ■
For more, join 75,000 subscribers getting tech's favorite brief here
