It's no longer enough for professional sports franchises to compete on the field. It now requires making major plays in real estate.
As the value of major league teams continues to climb — led by the Dallas Cowboys, valued by Forbes at over $10B — franchise owners are increasingly partnering with cities and developers to build mixed-use entertainment districts.
The sprawling developments aim to turn game day energy into year-round economic activity, and they're increasingly reshaping the real estate landscape around stadiums across the country.
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St. Louis' $360M Ballpark Village mixed-use district sits adjacent to Busch Stadium.
“Owners of franchises realize that real estate can have a tremendous positive effect on its fan base and obviously on the valuation of the franchise,” Hines Senior Managing Director John Mooz said last week at the National Association of Real Estate Editors’ 59th annual conference in New Orleans. “So it's a win-win-win all the way around, and when you have that kind of capital and that kind of opportunity, things will probably get bigger.”
The Cowboys made that play a decade ago with its headquarters and practice facility at its 91-acre The Star in Frisco mixed-use development that draws 7 million visitors annually.
But plenty of others are ripping a page from the Cowboys' book.
The rise of stadium redevelopment projects like Kroenke Sports & Entertainment's efforts around Ball Arena in downtown Denver and Lincoln Property Co.'s plans for an entertainment district and enclosed stadium for the Cleveland Browns has coincided with a cultural shift: Consumers now expect an experience with their outing.
And where many franchise owners would threaten to move their teams if they didn't get a new stadium in the 1990s and early 2000s, that is much more rare today as teams generate their own income, Mooz said.
“That vernacular has changed tremendously, mainly because of what they see as drivers for success of their franchise and success of the city,” Mooz said. “There's a much more collaborative effort between what I would call those that control the franchise and those that control the public realm.”
Cities like Atlanta and St. Louis have been successful with public-private partnerships that weave design and construction together thoughtfully to create experiences that go beyond game day, Mooz said.
“Then if you can put a convention center spin on top of that, it becomes very catalytic,” he said.
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Bisnow’s Maddy McCarty, JLL’s Matt Weko, Hines’ John Mooz and Gensler’s Eric Stultz.
Houston may be next. A proposed $2B master plan to redevelop the area around the George R. Brown Convention Center hopes to capitalize on its walkability to three professional sports venues — the Astros’ Minute Maid Park, the Rockets’ Toyota Center, and the Dynamo’s Shell Energy Stadium. The project is being funded by legislation redirecting a portion of the city's hotel occupancy taxes to the city of Houston and its marketing arm, Houston First.
“When there is real, serious capital in the game from both sides, it gives rise to … experiences that happen well beyond just game day,” Mooz said.
That’s by design. As home entertainment tech improves, teams are under pressure to lure fans away from their couches. Today’s stadium goers want more than just a seat — they want an experience, and entertainment districts are the ticket to making an outing an all-day affair, according to Gensler Design principal Eric Stultz.
“The venues that do that the best, that really integrate into what the city already has to offer, are the ones that are being the most successful,” Stultz said.
To do that, developers are incorporating everything from concert venues and retail to boutique offices and even housing. The latter is where things can get complicated, especially if 50,000 people will be regularly showing up in the area for events.
“Whether people want to be living in that environment is a little bit of a tricky proposition,” Stultz said. “Some of that goes to how you plan it, to make sure that those [elements] can be distinct and yet still adjacent. But it's necessary for those things to all be put together in order to ensure the long-term success of the properties.”
Office space also presents challenges, especially for tenants seeking quieter environments, and JLL President Matt Weko noted that it isn’t an environment for everyone. But it can work for boutique businesses.
“We liken it to saying ‘We suggest being next to the beehive, not in the beehive,’” Mooz said.
At the end of the day, sports-themed districts are all about creating a place the consumer wants to visit more than once and bring visitors from outside the area.
“If you answer [yes to] both of those things, it’s probably going to be pretty successful,” Mooz said.