Sports organizations are venturing beyond the field and court, reshaping the commercial real estate landscape in unprecedented ways. Professional teams in the NFL, NBA and MLB are no longer just investing in stadiums; they’re diversifying their portfolios and investing in communities. A survey by the International Association of Venue Managers, as reported in this article, shows that 82% of stadium owners have contributed to infrastructure and development projects surrounding their venues.
The Atlanta Braves have exemplified this trend with significant investments, including their latest acquisition of Pennant Park. Calloway Title completed the title work and assisted in closing the deal.
The Braves’ Playbook for Expansion
Pennant Park is a six-building office complex positioned near The Battery Atlanta at the crossroads of I-75 and I-285. The property offers an impressive 763,465 square feet of office space, includes more than 2,700 parking spaces and hosts 24 tenants across various industries, with notable anchor tenants such as The Home Depot.
“Acquiring this adjacent property expands our footprint and positions us to capitalize on the interest we continue to see in The Battery Atlanta. Additionally, this will provide expanded parking for the approximately 9 million people who visit us each year,” says Mike Plant, President & CEO of Braves Development Company, in this article. Pennant Park enhances Atlanta Braves Holdings, Inc.’s existing land footprint by over 30% and brings their total available square footage to more than 3 million across various properties.
Calloway Title has been involved in other acquisitions for the Braves organization. We completed the title work and transfer of Cobb County land in 2014, where we assisted in closing Truist Park and The Battery Atlanta. Additionally, we have closed other sports-related deals, including U.S. Soccer’s Fayette County Training Center and the Orlando Sportsplex.
Benefits of Commercial Investments Near Sports Stadiums
For sports organizations, investing in real estate provides a wealth of advantages. At its core, it’s about creating sustainable revenue streams that extend beyond ticket sales, merchandise and TV rights. Arenas surrounded by entertainment districts can generate revenue 365 days a year, regardless of whether games are being played.
By investing in mixed-use developments, like Hollywood Park (home to the Rams’ SoFi Stadium) and The Battery Atlanta, sports organizations can create an enhanced experience for fans and residents, support local employment needs and increase their overall team value through integrating the stadium with dining, retail, apartments and office space.
Proponents of investing near sports stadiums rely on real-world statistics about the potential for rental income and increased housing values. This article states, “Rental properties near stadiums are in high demand, as fans flock to the area for pre-game festivities and post-game celebrations. According to a report by the National Bureau of Economic Research, properties within a mile of a National Football League (NFL) stadium can see rents increase by as much as 9%.”
Another study, referenced in this article, found that housing values near sports stadiums increased by 4.7% in the United States. Properties close to infrastructure, like Pennant Park near I-75 and I-285, also offer logistical advantages.
Challenges of Commercial Investments Near Sports Stadiums
One of the most significant challenges is the cyclical nature of professional sports. A winning season can translate into an uptick in property values, with each additional game won during the regular season boosting housing values within a mile of the stadium by 0.14%, according to this article. On the flip side, a losing season or prolonged slump in team performance can diminish property demand and erode investor returns.
Economic conditions further compound this risk. During economic downturns, consumers often scale back on discretionary spending, which can impact game attendance, local businesses and occupancy rates for nearby properties. Managing properties in these high-traffic areas can also present challenges such as noise complaints, limited parking, wear and tear from large crowds or even vandalism during major events. To mitigate these risks, investors must understand market dynamics and the financial stability of the sports franchise. A solid investment strategy is critical to navigating the highs and lows of real estate ventures in these areas.
We want to be a part of your next commercial real estate deal. Visit www.titlelaw.com to work with Calloway Title.
