Pitch to Pro
Pitch to Pro is the official podcast of Ozark United FC. This will be our platform to tell our story about the club and the special place that we call home, Northwest Arkansas. This is a journey. We want to bring you along for the ride. We'll share what's going on behind the curtain, help educate the community at large about soccer, Our league, and give updates on the progress of the club along the way.
Together, we'll explore and unpack our journey to professional soccer, the magic that is NWA, our community, and talk all things soccer from on the pitch to behind the scenes, telling the story of our club.
Pitch to Pro
Ep. 32 - Sports Venue Development: The Battery, Titletown & Beyond
Discover the fascinating world where sports meet real estate with our esteemed guest, industry expert Josh Boren. Josh takes us on a journey through his career, from his pivotal experiences during the Great Financial Crisis to his collaboration with renowned sports architect Dan Meis. Now leading global business development at RCLCO, focusing on sports and entertainment, Josh shares his passion for Detroit sports and the recent buzz in American football. Tune in to learn how these monumental arenas and stadiums are more than just venues—they're catalysts for urban transformation.
Explore the magic behind sports venue developments like The Battery and Titletown, which are redefining the concept of game-day excitement. These projects not only boost team branding but also build vibrant communities by integrating residential and commercial spaces around stadiums. We'll discuss the allure of living spaces with spectacular ballpark views and delve into how these real estate ventures cater to shifting demographics, particularly in secondary and tertiary markets, creating lasting value for communities.
Join us as we also uncover the evolving dynamics of team ownership in real estate. With owner involvement jumping from 40% to 70%, sports clubs are tapping into new revenue streams beyond traditional means like TV rights. We highlight groundbreaking projects such as the Cowboys' practice facility in Frisco, illustrating how integrated developments enhance financial sustainability and community impact. Finally, we'll look into the future of sports district development, where multi-purpose venues and immersive retail experiences promise to create dynamic, engaging community spaces.
Pitch to Pro is the official podcast of Ozark United FC. This will be our platform to tell our story about the club and the special place that we call home, northwest Arkansas. This is a journey we want to bring you along for the ride. We'll share what's going on behind the curtain, help educate the community at large about soccer, our league, and give updates on the progress of the club along the way. Together, we'll explore and unpack our journey to professional soccer, the magic that is NWA, our community, and talk all things soccer from on the pitch to behind the scenes. Telling the story of our club. Pitch to Pro Podcast is proudly sponsored by PodcastVideoscom. Videoscom podcast videoscom is northwest arkansas's premier podcast recording studio, equipped with industry-leading equipment. The recording studio and services save you time, money and hassle. They are dedicated to helping you create, record and publish high quality podcasts for your audience. Be sure to check them out today at podcastvideoscom.
Speaker 2:Hey everybody and welcome back to the Pitcher Pro Podcast. I'm your host, wes Harris, Managing Director for Ozark United FC Northwest Arkansas' professional soccer club, playing in the United Soccer League Today. We have an awesome conversation today Soccer League Today. We have an awesome conversation today. Just really interesting, fun space to kind of talk about. But we're joined today by a good friend, mr Josh Boren, indie industry expert, here to talk about sports anchored real estate. But before we jump into that, josh, let's just take a quick second. Have you introduce yourself and kind of your background? How did you even get into this space? What are we talking about here? So we'll jump into that. I want people to get a quick background on you.
Speaker 3:Thank you again for joining me, of course, and thanks so much for having me, wes. It's been a long time, but I know we've stayed in touch. It's nice to have a reason to reconnect again, and congratulations to you and Ozark on the new club. It's really exciting. I can't wait to watch. I think we'll see more and more of these markets like yours that are in need of not only expansion opportunities, but then stadiums and real estate that goes along with it, which is what we're here to talk about today right, sports and real estate. It's a really fun place to play. It's an intersection that when I started my career, didn't think there was a world where I'd be able to do both, and now here I am.
Speaker 3:So, as you mentioned, I'm Josh Boren. I am a managing director with RCL Co. We are a real estate consulting firm. We've got 100 people nationally and work across all asset classes, but have a particular expertise in what I call venue adjacent or sports anchored, mixed-use real estate. My background's a bit fitting for that in particular.
Speaker 3:Funny enough, I started my career at RCLCO 20 years ago. Let's call it just about dating myself a little bit, doing market analysis and real estate consulting work, economics work, and then the great financial crisis happened. So by the end of 08, I was sort of out of my role, out of a job there and had gotten really lucky and met a very well-known sports and entertainment architect, dan Meese, a guy that designed Staple Center now Cryptocom Arena, lincoln Financial Field, dozens of other projects as well and just nationally but globally and I stayed in touch with him and got really lucky. When the gfc sort of happened and I left rclco the first time around to to leave what I thought was going to be real estate, he said why don't you come on board and be my business development guy? I'm about to launch a sports architecture firm partnered with the large conglomerate not asia, and I had the opportunity to do what we said was a one month test run. He said I know you know a little bit about real estate, a little bit about sports. You don't know shit about architecture pardon my French, but we'll figure that part out and I spent the next nine years running business development for a handful of sports and entertainment architecture firms that included groups like Populous Woods, bagot, idus, and ultimately working for Dan Meese.
Speaker 3:That entire time that allowed me an amazing opportunity to travel the globe and see what was happening at the venue and, I guess, at the kind of ground level of these projects in terms of how a stadium or arena can impact a city. And ultimately, after nine great years of doing that, I wanted to get back into real estate full time and Arcielco was looking for their first head of business development. It was their 50-year anniversary. I've been with the firm this stint nine years around now, so I call myself a boomerang, along with a few others who have left and come back, and I now lead global business development for Arsialco as well, with a pretty large emphasis on the sports and entertainment space. So being able to tap into that long route, so long-winded background. The other thing you probably need to know about me is I'm a I live in los angeles about your 18 years, but I'm a diehard detroit sports guy as well, so that always factors into uh things as you, as you learn a little bit about me.
Speaker 2:Yeah, hey, well, on that side note, uh, congrats on a couple of years of you know, at least on the American football side, a little bit to get excited about and cheer for. So if my commanders don't make it out of the NFC, I'm pulling for you guys.
Speaker 3:Well, I appreciate that. Yeah, we have a running joke in my family. My dad, you know, in the 70s, never seen a good Lions team Me essentially 40,. Never seen a good lions team me essentially 40 never seen a good lions team. My two-year-old son only knows a world where the lions are nfc champions or nfc north champions, so so it feels a little bizarro to me, but uh, but yeah, it's been pretty fun and, and you know, between that and the growth of soccer in america, it's a. It's a good time to be, uh, to be a fan. It's a better time to be in the business of sports, I think. And obviously look at you, I mean right in the midst of even new club expansion, so it's really exciting.
Speaker 2:Yeah, we're getting there. It's full circle from when you and I kind of first connected Gosh we're coming up on probably 15 years now and anyway dovetail, but I mean that's an incredible background. But I mean that's an incredible background and it just I'm sure you've gotten to see the emergence of this trend and how it's kind of taken its shape and adapted. From other places around the world it may look very different or a little bit different, and how that started to kind of manifest itself within the US pro sports landscape. So let's jump back in and talk a little bit about what is sports, anchored or adjacent, you know, real estate development. Sometimes they're called entertainment zones or districts. But let's take a step back and like what is it? First? And secondly, when did this start to be kind of a thing?
Speaker 3:in American pro sports. Yeah, great questions and a good way to set the stage and it's timely we're having our conversation now. Rcl Co has put out two interesting pieces of content this year, one in the last week or so that talks about what is a sports anchored mixed use district. Right, how do you define that? But more so, how has it evolved over time? And I think that's a key piece of your question, wes is when did they start and what do they look like today? Because the industry has evolved a lot and I think there's a lot of future potential as well, as we see what's happening in sports and investment and just the capital side of the business as well. No-transcript, there's other things happening in sports and real estate, but basically the idea that that venue acts as a catalyst or serves to further the rest of the real estate around it.
Speaker 3:When we talk about when they started or what that looks like today, the evolution, it is very different. I mean, I guess for me you could kind of pin the first one back to the late 90s, which is really LA Live. Although LA Live sort of has hybrid elements of various evolutions, the way we look at these districts is really in District 1.0 to District 2.0, to what we're seeing today, which is really District 3.0. And they have evolved quite a bit and changed over that time. And I think the two things, the two key variables that really influence how we define which of those periods we're in and where things are going, tends to tie to district scale and whether the primary driver or agent crafting the project was the private sector and the team or public sector. And it's that piece, the latter piece, that I think is most interesting today. That version 1.0, like we talked about, was really like an enclosed or standalone retail entertainment district. Right, it was typically done so by a public sector, or the arena or the venue itself would be historically owned by public sector and maybe there was some private involvement, but really kind of driven as part of a larger project. That 2.0 version became kind of more of like a small scale neighborhood is probably a better way to put it With a number of little or interactions or partnerships with the team, Whereas today what you see in terms of the mixed-use districts that we're talking about, that are permeating our timelines, and what we're seeing and what teams and what groups like you all are trying to do, is really true development planned from the onset with the team involved, whether that's as a developer themselves, whether that's participating in a joint venture or whether it's just simply having some sort of control rights. So that, I think, is a big piece of where things have evolved over time and you can imagine why and why it's happening now in terms of kind of that timeline, in terms of the takeoff right.
Speaker 3:I think one, franchises are expensive. Now, right, there's only so many groups that can afford these. You know kind of large appreciations and franchise costs that have happened over the last, you know, five to 10 years. And in doing so, if you're an owner of a team and you start looking at where you can define revenue buckets, absolutely you have your broadcast dollars, you have your sponsorship and partnership dollars. I won't say those are fixed, but those are kind of a they're kind of almost givens at this point or part of a larger package. And then now sitting out, there are real estate opportunities and the piece that I think is even more interesting about the real estate piece is it's often, for better or for worse, kept outside of the player's share or the player's pool as well, so it's revenue directly back to the owners at the end of the day, so I'll pause there. That's a lot of background to set the stage and I'm sure you have questions.
Speaker 2:No, and I think you hit on it. This has been really interesting and you touched on a lot of the valuation appreciation which is the draw from an investor standpoint, financially, let alone with doing good through sport as your vehicle, whatever your motivations may be. But you know, let's not kid ourselves, people are also there to make some money and that's where the valuation growth on franchise value of the club has certainly seen that growth and appreciation, especially in our sport, in particular in soccer. Over the last 10 to 15 years, but especially in the last, like five, it's really skyrocketed. And so, as you start jumping into this, you start thinking about, to your point all right, where's my revenue going to come from to help me, as I've just done this outlay to get into the league, and how do I make this sustainable and going forward? And to your point, a lot of what people are starting to look at and turn to and realize as they pay attention to things going on is real estate.
Speaker 2:But talk a little bit about, because where this comes into play is okay, great, we can get into real estate just as an organization. We can just be a development company that all of a sudden you know just. Oh, by the way, it happens to own a soccer team, but that doesn't necessarily mean that it has to be adjacent or next to or close to the venue, right? So talk about why and like. We talk about this all the time. But soccer, in particularly as a sport, is that a not necessarily disadvantage? But it's just different in that it's shorter than its counterparts. So then, what do people look for when they go out? So talk about that and how that then just like, even forces it to be almost in and around it, or you would want to, as an owner. Talk about that.
Speaker 3:Yeah, I think it's. You know I hate using that term, synergies but ultimately that's what you're looking for. Between team and venue real estate that comes into play and it ties into something like a soccer match or an MLB game and if you start actually looking at it, you'll see baseball as a kind of leading the way, more so maybe than some other sports right now. And it ties to what you just talked about, wes you want a critical mass at these venues and you want enough individuals and enough game day experience to really give people a reason to attend. So soccer, what I think is really interesting, though fan passion, right. So yes, it's shorter, but you know what? Those fans will be out early. That probably creates some sort of march to match. It probably will go through your primary main street and your retail development. It'll drive people to your site earlier and often the hope is that they're staying and engaging with food and beverage and things of that nature. And I think what you've also seen a lot more in the kind of newer versions or sort of the evolution of the districts is really a tie to the authenticity or the localness of the locale that it is in, and I think that happens to tie in very well with the sport, like soccer, which I think also really relies in sort of a grassroots or an origin story in the market that it's in, and so those things bode well together. But yes, from a real estate perspective it's exactly like you said. I think we see the pro teams recognizing the larger teams, recognizing there's opportunities to capitalize on the real estate and, on non-game days, control our brand, extend our reach, create a 365-day ambiance and environment that really celebrates who we are as a club. But then there's the other side of it, which is you have the real estate community looking at it and saying, oh, I have these large projects that really need an anchor tenant right, historically that might've been a mall back in the day, but instead now can we do an entertainment destination or venue that happens to have an anchored soccer team that guarantees me 20 events a year at that, plus I can bring in however much. And then 20 events a year at that, plus I can bring in however much, and then it becomes a community asset, and I think that's the piece of these districts that you're seeing more and more is the community asset, but also it's the interaction of all these pieces. There was a great Wall Street Journal article maybe three weeks ago about how residential has become, kind of this amazing amenity to be next to. It was tied to ballparks and around MLB and World Series kind of era.
Speaker 3:But how cool is it to have the ability to be in a high rise tower that has ballpark view? What's the premium associated with that? What's the ability, on a game day, to be able to walk outside and be part of that experience, right? And so you're seeing different sectors take advantage of that. Right On the capital side, what's it mean to have an office tower that's very hard to finance and build right now?
Speaker 3:Side, what's it mean to have an office tower that's very hard to finance and build right now, already pre-leased, or have that team moving their headquarters into right with that credit tenant, right?
Speaker 3:So all of a sudden, those it's the synergies you talk about retail that interacts on a game day but also can hold its own on a nine game day.
Speaker 3:Uh, all these elements that you're typically seeing right, and so that's why people point to a lot of the newer districts.
Speaker 3:They look at something like the battery, which makes a lot of sense and it's worked really well, and part of that is like yeah, your partner took a tower, you have another high-rise office that's working with the team, you have an office that you have a hotel that supplements and supports right, and so all of these things really create a pocket or an identity.
Speaker 3:I think it gives the team some ability to really plant more roots locally, which not like they necessarily need to do that, but it creates this commitment to the city or a locale that I think people can rally behind. It's been really exciting to see how all those pieces interact. That's not even getting into the nuance or the weeds around when we do our analysis. How does commercial work next to a building when you have to think about parking? Well, can the parking be borrowed from an office for night games and things of that nature? So we get pretty granular and I mean that's probably not right for this podcast audience, but that idea of how those different uses have to interact with the venue really is critical.
Speaker 2:And it's all around. It comes down to the planning which I think you're starting to see you, and it's all around. It comes down to the planning which I think you're starting to see you know. It's not just on the expansion side. Obviously there's planning. Anytime you do any kind of real estate development. Does it work, does it fit, how does it interact with the things around it? So, but especially when you're starting from scratch and get to paint that picture, like we are, that's fun to kind of start with a blank canvas, if you will, but it's a fantastic point. So talk, you touched on a little bit and I think it'll share some similar themes. But, like, if I'm a fan, what does that mean for me? As for this trend, like, what does that mean for me? You know why do I care?
Speaker 3:I think it means you have a lot more things to do and a lot more ways to support your team and a lot more ways to engage. Right, and I think that's ultimately, I mean from a brand and a team perspective that idea of brand expansion, brand control and being able to touch more fans is critical. Right, I mean it's one thing to be able to go to a match, and that's where I think being in the venues you know you can't compare to that, but there is something about having a communal focal point that people feel a part of. Right, and maybe that's the away games. Right, you use the, you're using the giant screens, your public plazas. I mean, when we point to these again, these great examples, these news districts and where things have sort of ended up, it's not necessarily always biggest is best, it's really what fits the local market. And so Titletown, green Bay, that's a great example of a mixed use project, kind of a district 3.0. That is really a perfect fit for what they're trying to do in green bay. They're not trying to be la live, they don't need to be, they need to be the right thing to who is coming to visit, who's coming to spend dollars, who's coming to engage and it's expanding that team's presence and through and the pack presence. I hate to talk about them as an NFC North guy, right, but around that game day experience, it gives people a reason to be there, not just for a football game, and I think that's really really key. And I think, especially as the world sort of lost some of this third place, this idea of where do you go to get community, where do you go to get communal experiences, to me, like you know, what's better than being in the supporter section for two hours cheering along with friends, but then the ability to, you know, spend time right after, right before engage, be on site. Those are the things that I think the districts can really, really, you know, propel going forward in terms of how it can grow a brand. And you're seeing it not just again, you're seeing it in everything.
Speaker 3:Look what the current are doing in, you know, women's sports, and I think it all ties back into this idea of, like sports, investment. So, yeah, women's sports, I call it expansion sports, secondary, tertiary markets. I mean we are big fans of those areas as well. I mean I love what you guys are doing with Ozark I areas as well. I mean I love what you guys are doing with Ozark. I think you know the, the Northwest Arkansas, the Albuquerque's, the, you know, you know.
Speaker 3:Pick a city in the southeast that's seen tremendous economic and demographic shift in growth and tailings over the last, however many years. From a real estate perspective, there's an opportunity to provide something for your community in doing this and those synergies tie together. So it's kind of going back the other way. We see, we see a lot of real estate folks who want to own teams because they see it as a supplement to their real estate, versus from the other side, and so it's really cool to kind of see both angles coming at it. And again, this is only just talking about districts. There's a whole host of, you know, practice facilities and you know healthcare integration and all sorts of other things that teams can do in their cities to create secondary and third locations and really expand that brand presence but also create revenue and create appreciation from a value perspective right.
Speaker 2:Absolutely. You're starting to give things away and talk about the playbook here. Starting to give things away and talk about the playbook here, it's just you're hitting on so many things that are just so top of mind for not just our project but a lot of different projects as the sports industry starts to look at how do we make a difference in our communities but also build a business model around that, because, at the end of the day, it's got to be sustainable. We can't continue to make differences if the well runs dry, so we have to continue to make it a sustainable operational model. So you started to hit on it and give some of these examples in different teams and things.
Speaker 2:But just give some people perspective, because I know you have numbers on this and I don't want to put you on the spot, but just talk in generalities if you don't have exact numbers. But this is starting to permeate through just about every single major sport across the country, even into, like live entertainment, which I know is a whole other thing like concert venues, as an example Right, an example. So give some people a general idea. Are we talking about five? Are we talking about a third of a league? Start going through some of that because I was reading some of the things that you guys put out and it was pretty interesting to me on how prevalent this kind of has started to kind of chunk its way through as teams have started to kind of catch on yeah, absolutely.
Speaker 3:I'll throw some numbers out here shortly, but I think, um, I think the piece you mentioned about that is just the larger place where entertainment and hospitality is going in terms of just the experience, the, the ability for a strong brand to grow beyond kind of its boundaries, to your point, whether that's through entertainment venues or music and concert, but also just like branded destinations, branded experience. We see it a lot on the hospitality side as well and it's really interesting to see. You know groups like Sports Illustrated pitching, you know resorts or weekend game day destinations and collegiate towns, and we even talked about the collegiate world in terms of mixed use anchor. You know real estate plays tied to sports, and that's a whole, nother, whole, nother place. But I would imagine you're going to see, yes, a lot beyond kind of the big, the big five sports call it Right, and so it's really interesting when you start tracking, I'm like, yes, it is a big trend and there's a lot happening, but maybe the numbers aren't as necessarily large as you would expect. Not every team has one of these. As I mentioned, mlb really kind of leads the way right in terms of what's happening from a district perspective. I think they have something like 20 or so of the 30, maybe 21 of the 30 have some sort of development. 16 already exist or so, with another one in construction and five being planned.
Speaker 3:Major League Soccer, maybe on the opposite side coming in, really only has call it two existing, 300 construction and then another six plans. You can kind of see where soccer maybe is a newer sport in America. It's sort of still trailing a little bit but I think also again lends itself, especially if you right-size these venues, to a market that makes sense. That's the other thing. Not every stadium has to be a 40,000 seat venue. We've been proponents for a long time of doing five to 12,000 seaters that fit the market you're in. Again, it's that piece about being local or contextual. Nfl I think they have eight or so existing, with another two we could point to under construction, another eight in planning right now.
Speaker 3:What you're seeing about the NFL ones, which is really interesting and again kind of the trend, most of the new ones being proposed or involved are going to be domed or planned as domes because again of that year-round need or expertise and similar to soccer, I think one of the struggles with pro football at that scale is how many folks can really fill that venue how many times a year, right? So yeah, you're going to get a dozen or so games if you're lucky, and then you know however many Taylor Swift concerts and a couple other country artists and I'm guessing that's about it for a venue that scale. So how do you make those more of a venue that can be used year round and then have that district around it complement that in some sense? And so I think what's really interesting is you actually see the most in plan in the NFL right now Again, I'm only talking Big Five for a minute. Nba NHL.
Speaker 3:You could kind of probably bunch those together because many of those venues are combined, but something between you know, maybe five for each right now and another five like 11 in plan. So, or something like that, maybe another fourth or shared. So I have some numbers but you can kind of get a sense like it's not all of a sudden. Hey, there's, you know, 140 or what is it? 150 professional teams. They all have one. There's something like you know 50 or so in plan and proposed right now and have been done today, today. So you can kind of see again.
Speaker 3:That's where things are shifting.
Speaker 3:I think the most interesting piece of it is you're seeing, that's where the capital is flowing as well, right, and so all of a sudden, a lot of these groups are either crafting their own development groups you're seeing spin outs of a lot of the the large investment uh organizations crafting funds with vehicles for real estate where they can come in and say, hey, let us leverage our understanding of the sports, or we've done this before, but then bring some capital to the table as well through our funds and invest in this.
Speaker 3:And you're also seeing that I think, with just what's happening with private equity in the investment in the teams, I would imagine all the private equity vehicles will have a real estate fund set up sooner than later, right. And so again, you can then see there's an upward trend. There's not that many yet, you know, but they're happening. And that's not even counting. This is where I think the numbers would explode, and it is part of our plan at Arcealco to kind of go back and continue. To add to that tracker is to add all of the rest of the leagues that haven't yet been incorporated. When you start talking about USL and NWSL and all these other groups, there's a lot of smaller, more appropriate venues that are going to be anchoring developments and anchoring projects coming along in the next five to 10 years.
Speaker 2:And I think so.
Speaker 2:You just started, in that last little 30 to five minute section, kind of spinning into where I was going to ask you next, which is some of the impacts that we're starting to see from this trend, and you started touching on it a little bit. It's not just about okay, well, yes, the venue itself and what does development look like. It also has impacts to ownership group structure, like it also has impacts to ownership group structure. It also has impact to how you know, if you're a current team, and what am I thinking about over the next 10 to 15 years and what do I need to do and where am I, you know, organizing and either raising funds or deploying funds. If you're an expansion team, what does that mean and what do I now need to think about? So talk a little bit about keep expanding a little bit on some of those topics, if you would, on how this has changed sports in particular, and you can look at that from a couple of different lenses, and this has reshaped, I think, the landscape in a lot of different ways.
Speaker 3:Yeah, I mean to your point about ownership. I was just and I'll have to plug my own, our own paper after all this you can go back and read the actual numbers. I was trying to spit off the top of my head real quick, but again I think I'll be close. On the ownership side, it's interesting the percent of existing mixed use developments where, like the team or the owners involved somewhere around 40%, I believe, right. So again, kind of that older model. You're seeing that the planned mixed use projects that we just kind of talked about, and the percentage of those planned projects where owners or teams are involved is about 70%, right, so that's a pretty significant, I mean almost. What is it? It's 30% actual delta, but it's almost double in terms of what has happened to date versus where things are going. And again, that's just looking kind of at the big five right now and so I think you'll see a lot more opportunity there. But it ties back to your point earlier Wes about you need a financially sustainable club in order to be what we want, to be able to contribute to the community, right? And obviously you're different, different in different scales, but I think especially for like an ozark, right, I think the real estate will be really important at your scale. You know, has an nfl team with a big venue been able to get or get away with with being successful and growing in value without the development around it? Absolutely that doesn't mean they're not also still exploring the parking lots around their venue today and trying to figure out what to do or where to go next, right, so I think everybody sort of sees that again, there's only so much, I'd say, upside, tied to the other main revenue streams within sports soccer, albeit a, albeit a unique beast, my hope is you all have a pipeline of incredible players coming out of Ozark and Northwest Arkansas and all of a sudden you're selling teams the championship and you're making hand over fist to reinvest in the community.
Speaker 3:Right, soccer, a little bit of a different model with the player development component, but for most sports, again, when you factor in kind of where the revenues are, you can't really impact your television rights too much year in and year out. You can't really drive your sponsorship dollars too much further than where you're at. You'll continue to see growth, but the real estate creates this all of a sudden, this unheard of or untapped potential, and so I think that's why you're seeing more and more of this. And again, I hate to harp on this, but at different leagues who owns that real estate and how you structure that revenue also matters a lot to a group that may. For instance, typically in sports and I know a lot of people don't like to hear this but, like a lot of owners tend to lose money year over year on the actual running of the club. Long-term the appreciation of the franchise will make up for that or offset that right. But if you have a real estate play that can also generate or help from a tax perspective or do something that contributes to that operating business, I think that's going to be really important going forward.
Speaker 3:And then there's different structures of how that looks right. I mean again, I think there's more alignment and partnerships with municipalities these days as cities and clubs become a bigger I'm sorry, as clubs and teams just become a bigger uh piece of a city in the culture and the kind of localness that gets into the piece from the uk. You know that for a minute. I'll digress for a second west. This is always funny.
Speaker 3:When I worked in the stadium design business I always thought it was so funny. Everybody wants what they can't have. Right, I would travel to the uk and go to europe and I'd talk to football clubs, soccer clubs, clubs there, and they'd all say, oh, we want the American commercialization of our venues, we want to be able to make revenue the way you guys do. And then you'd go talk to all the American clubs and the American clubs would say, oh, we want that UK fandom, we want that pitch side ambiance, experience. And so I was like, yeah, you always want what you don't have, kind of a thing. It's funny how that works.
Speaker 3:But anyway, the point being, you get these clubs and, I think, these opportunities that well one. There's different ownership structures now, and so you may partner, and I think you're starting to see a number of real estate companies and real estate investors craft specific strategies to be the partners of these teams. Right, so that's new and unique. And the teams can contribute in the upside, whether it's by providing equity, contributing land they may have, whatever that looks like having some sort of control. Right, the other side, what you're starting to see some teams do is actually build out their own internal development organization. Right, that's something like the Braves, what they did, where they built out Brave Development Corps. You're seeing other organizations think about that. Usl has done a great job. They have a chief real estate officer, right. So I think again you can kind of see where things are being set in stone to say, hey, down the line, real estate's still a small piece, but there's an opportunity for me, a bigger piece, especially as you start thinking about.
Speaker 3:You know how do you do? A trading facility anchor project that's partnered with your health care provider that happens to be a performing center. I mean, the piston did that. Right, they help. Henry ford healthcare is one of their sponsors. And now they're the pistons.
Speaker 3:Henry ford health. Uh, their training center anchors a two billion dollar medical health care campus in detroit, right, or whatever it may be. And so that's a very specific development district. Build out that looks different than many that use, you know, resi, commercial and hospitality. But the start at Frisco, another example of like a game changer in our business. You see what the Cowboys did. They built a practice facility that has a hotel that generates its own dollars on tours, that gets people there day in and day out for events. That gets people there day in and day out for events. I think you're going to start seeing a lot more teams finding ways to integrate their history and their legacies and the locales that they're in with hospitality and mixed use and create these secondary and third locations for their clubs as well. I probably went off topic a little bit there.
Speaker 2:No, no, this is. I love the convo, I love how conversations naturally kind of take us there and you're actually starting to hit on. You know you've been a fantastic podcast guest because you're just you're, you're doing my job for me and leading me into the next question, which is great, but it is you're, you're so right and you're starting to see especially on like the training centerpiece. You're starting to see that be like the next thing, both from a just what's happening but also opportunity on, you know, partnership side in particular. And then what does that mean for the partner and what are their goals and how does that fit their narratives and and their strategy? There's so many different opportunities and things to come into that side of it.
Speaker 2:But you know I digress, but that's kind of this little spinoff thing of venue anchored kind of development which has been interesting and I don't need to tell you. But you're a certain hit on it. But what does you know? We've learned a ton, we've talked a lot. What does the next kind of phase in your, in your eyes, what do you, where do you see this going? Um, and I know that that can take a lot of different shapes in your answer, but you know, talk about some of the things that you guys are thinking about and talking about Um and and where do you see this space kind of involved in?
Speaker 3:Yeah, it's interesting, I mean again because it's so early in what we would call this third version of where things are. And what's really funny about it is actually, kind of, look at it, it's not like 1.0, 2.0, 3.0, and it's kind of linear trend. You almost have to view things at an access of neighborhood versus individual project, versus private development versus public development. So what I think's happened is and what we're writing and what we're sharing is, we've kind of had this growth that's almost kind of reverted back in some way, where it's moved back. The early projects really had a little bit of private involvement with heavy public sector or we're building oriented. I think the next wave is really just private sector neighborhood development, right, and so I don't know how much that means it's new or unique or what's going to be different. But I think you'll see a lot more of them, and I think that's point number one. I just think we're early, very early in what people are doing and what we're seeing. I mean, at the end of the day, you still can only point to a handful of kind of the newest version of these districts in each of the leagues, right, and there'll be elements from each that I think people will borrow, and I think that's the piece that gets exciting for me.
Speaker 3:You know I look at LA Live and that was a game changer for everything and for years working in that space, everybody wanted LA Live. What I think you have to realize is LA works in LA, but it might not necessarily work in your town, but there are components of it that certainly work. You have the open plaza that became a central focus that can do secondary projections and watch games and become a meeting spot. You're seeing that now in almost every district, that communal plaza area, whatever that looks like. The Cubs have done a great job in wrigleyville at, you know, making sure that they have their part, but not just there, and maybe this is really where things are evolving. It's the programming within all these districts. That, to me, is probably the next evolution of them, right? So I think district 3.0 is kind of where we're at today and I think you'll start to see a lot more of these privately driven, team-driven projects, and the piece that will make them look different as they continue to evolve on top of each other is probably the programming piece in terms of how does the team or the partner then engage that space and engage the community, it gets back to the end of the day.
Speaker 3:I think maybe this is because I spent so much time overseas and working in international football, in particular soccer it really has to feel like a community amenity, it really has to feel like it's part of the fabric of the culture, and that's the thing that's really hard to replicate. When you look overseas, right, you go anywhere in the UK, you walk around and there's a hundred year old venue that's sitting next to a you know a row of homes US code and zoning and we can't do that now, right, but long-term, this idea of creating a walkable, mixed-use, single, kind of focused destination where everybody has at least one thing in common, I think is really unique and I think that's a great opportunity. And then, on top of it, if we're moving outside of the district, I still think, like we talked about, you'll see all these secondary opportunities exist. And I am still also really bullish on just women's sports and kind of what I would consider to be the non-traditional main sports, kind of opening up new opportunities as well. At Arcecoa we've done projects with, uh, cricket, anchored projects at this point. We've looked at, we looked at esports for a little while, uh, and again I think we're talking about sports like this in terms of one particular. But an esports arena only is going to work if it's really a mixed use, anchor for a larger project, right, and so I think we say one sport or a cricket, but again, what that that is is a multi-purpose venue that can anchor a district right or anchor some sort of development.
Speaker 3:It's also interesting to see kind of the other side of it. If you're talking about innovation or where things are going is maybe less so from the team perspective and the district itself, but like what's happening in those districts, that's also experience-driven, like one of the ones that I'm sure you've seen and everyone's watching right now. It's been incredible to see the interest level in something like Cosm and for those of you all who don't know what Cosm is, cosm is this new immersive real estate play. It's a retail experience, but the idea is it's kind of like a mini sphere. In Vegas they broadcast major events and the way it's structured, with the screens and the interaction, it basically feels like you are live pitch side, live court side, whatever that sport may be. They have one right now down at Hollywood Park where the Rams and the Chargers play. They have one in Dallas, they just announced one in Detroit, I think they have another one potentially coming to Atlanta.
Speaker 3:Don't quote me on that fourth one, I could be wrong. But again this idea that like, hey, mixed-use districts, when you look at versions 1.0 and 2.0, maybe were these kind of replicable plug-and-play opportunities. Now you're getting technology that's driving unique experiences that can look different day in, day out. Yeah, that's driving unique experiences that can look different day in, day out. Yeah, you know, in LA, one night they can broadcast a USC game and the next night they can broadcast the NFL team that's not playing there and the next night they can broadcast a concert. All of a sudden, that district has three more event nights of opportunity than it involved before. Right, so again, that push and play between the two things will be really interesting.
Speaker 3:I think that next retail evolution will be really interesting. I think that next retail evolution will be really interesting to see and how it fits in and, like you've already seen it, food-wise or F&B-wise, with again that idea that it needs to be local, it needs to be unique, can't just bring in a chain that's the same in every single sports district nationally. So that's some of what I think we're seeing, but also like the economics behind it. To me, maybe is the most exciting part. There is a huge influx of capital and our Cielco also. We represent a number of institutional investors for real estate, obviously, but just generally here and things that come across just being in that industry. There's a lot of institutional interest in investing in sports and I think that will continue to flow down to real estate. Podcast technology, whatever the next thing may be, that will end up being sports investment driven.
Speaker 2:Yeah, I think, man, there's so much there. You're in such a cool, exciting space and you've gotten to see it develop, you know and be a part of that and be a thought leader in it, which is super cool, but I think that that probably is a good spot for us to cut it, josh. I mean, man, I could sit here and talk to you for another three hours, but very few would be.
Speaker 3:We'd have to chop that up right, it would just be you and I at that point exactly.
Speaker 2:Yeah, we could just do part one, three, four, seven. You know we'll get there. But, josh man, thank you so much for joining today and sharing your expertise and thoughts with us. This is such a cool space, an interesting conversation to have and just dive in and see what's going on, because I think, to your point, there's a lot of exciting things happening and we're all gonna maybe start seeing this and you know, coming to a lot of exciting things happening and we're all going to maybe start seeing this and come into a place near you sometime soon. So thanks again for joining me, man.
Speaker 3:Of course, and I really appreciate it. Wes, you made this an easy conversation. I mean, I could talk about sports-oriented real estate all day, but also, if people are interested in learning more, feel free to check out the rclcocom website for a few additional pieces that we've published on that and your audience, your listeners, can also reach out to me. Feel free to share my information. I'm happy to talk with anybody about this. As you can tell, we could go well more than an hour, so it's an exciting time in the industry, for sure, and, more than anything, I'm really excited to watch your project and what you all are doing down there and hopefully find a way to participate and bring some knowledge to it as well, if we can.
Speaker 2:Yeah, I love that, josh. Thank you, man. Well, that's it for this episode of Pitch to Pro. Be sure to catch all of our episodes on pitchtoprocom and look for Pitch to Pro on YouTube, spotify, apple or wherever you get your podcasts for more content. Until then, we'll catch you next time. Northwest Arkansas Cheers.
Speaker 1:Thanks for joining us on this episode of the Pitch to Pro podcast. Be sure to tune in again in two weeks for the next installment and check out the Stoppage Time series for a recap of today's episode. Be sure to find us at Pitch to Pro on YouTube, instagram and everywhere you get your podcasts. Until next time, northwest Arkansas cheers.